Sales Funnel

A sales funnel—also known as a marketing funnel, conversion funnel, or purchase funnel—is a marketing model that shows a prospective customer's journey to buy a product or service.

In this video, Anya explains how sales funnels can benefit your business. Check it out!

In this article, we’ll uncover the importance of the sales funnel, its benefits, and statistics. We’ll also discuss the stages, types, software, automation, and examples.

Why do you need a sales funnel?

The more established e-commerce companies spend a lot of time and resources on developing effective sales funnels. If you want to increase your revenue, you must also take the time to understand and develop a proper sales funnel for your business.

The sales funnel serves as an essential tool for visualizing the customer journey from the first to the last stage. With its help, marketers have a clear understanding of how prospects move down to the purchase and make their decisions. Understanding all the peculiarities enables business owners to optimize the customer journey, identify problems, boost conversions, evaluate performance, personalize communication with clients, and contribute to overall business revenues and growth.

Now that you understand why you need a sales funnel, it’s time to explore the benefits you can reap.

Benefits of a Sales Funnel

There are various pros the development of sales funnels might bring to your company. Here are the most crucial for you to consider:

• a clear understanding of customers;
• higher conversion rates;
• sales forecasting;
• alignment of marketing and sales efforts;
• the right resource allocation;
• proper lead nurturing;
• more repeat customers;
• fewer gaps in the strategy that make customers leave;
• personalized messaging.

Now it’s time to support statements with facts and statistics, so let’s dive in.

Sales Funnel Statistics

Since sales funnel statistics can provide you with more insights into its importance, it’s essential to review some of the most crucial facts. We’ll do it in this section.

• 79% of prospects don’t convert into customers;
• 65% of businesses mark lead generation as one of their most difficult tasks;
• marketers who incorporate effective lead nurturing strategies get 50% more prospects who are ready for purchases;
• businesses increasing the number of form fields from four to eight reduce conversion rates of their sales funnel by 50%;
• 96% of users who visit brands’ websites aren’t ready for purchase;
• 79% of prospects don’t convert into customers because of the weak lead nurturing strategy;
• 75% of potential customers churn out during their customer journeys.

Now that you know some essential stats, it’s time to find out how a sales funnel works to develop it right for your business.

How does a sales funnel work?

To successfully develop a sales funnel, you need to understand how to do it right. In this section, we’ll explain it to you.

A sales funnel starts with a company’s desire to improve lead generation step by step. Marketers do it through various techniques and channels, including paid ads on social media, websites, and valuable content. As prospects move down the funnel, their number decreases.

The number of leads reduces because only those interested in brands’ products stick to the brand. If potential customers successfully progress through the sales funnel towards a purchase, and marketers exert maximum effort to effectively communicate product benefits and persuade prospects, companies achieve conversions. If leads take the desired action, brands have closed-won deals. When marketers fail to show the value, businesses get a closed-lost deal.

Now that you know how a sales funnel works, it’s time to explore it in detail stage by stage. So let’s dive in.

Sales Funnel Stages

The sales funnel comprises the steps from awareness to the purchase. To develop a sales funnel effectively, you need to be aware of each step to prepare the right content for every stage, so let’s explore.

Awareness

This is the stage where companies drive potential customers’ attention to their products and make them aware of them. Businesses develop marketing campaigns, share posts on social media, run paid ads on search engines and social media, contribute to SEO, and outline content marketing strategies.

Interest

This stage involves interacting with prospects and educating them about the company's products to establish interest. Marketers provide leads with informative content, email campaigns, free trials, and webinars to showcase the products' value.

Consideration

At the consideration stage, businesses communicate the benefits of their products and persuade prospects to purchase. They use product demonstrations, provide case studies, deliver detailed product information, and ensure free consultations that help increase the probability of a conversion. At this stage, potential customers conduct short research to find alternatives from other brands. They compare all the products, assess reviews, and choose the best options in terms of price, usability, features, and feedback.

Intent

At this stage, marketers make every effort to encourage leads to take the desired action. They provide personalized recommendations, give first-order discounts, send promo codes, etc. Businesses can also send detailed pricing information and provide prospects with personalized consultations. At the “intent” stage, potential customers show interest and intent to buy products. They can indicate it by adding the necessary items to the shopping carts or requesting some specific pricing information.

Evaluation

At this stage, businesses ensure a seamless decision-making process so that prospects can take action. This includes handling objections, providing counterarguments, sharing testimonials, offering money-back guarantees, and many more. Potential customers weigh all the pros and cons to make their decision.

Purchase

At this stage, prospects finally convert into customers. To make this process faster and simpler, companies ensure a simple checkout process, provide multiple payment options, and seamless customer support in case customers have some problems with their orders. Clients complete their actions by ordering products.

Post-purchase

Marketers need to follow up with customers after they complete orders to encourage them to stick with a brand and make further purchases. Business owners can use various approaches, including email campaigns, loyalty programs, satisfaction surveys, upselling, and cross-selling techniques. If clients are satisfied with a brand, they will encourage word-of-mouth promotion by recommending products to their friends and colleagues.

Now that you know the stages, let’s review the types of sales funnels you can use to your advantage.

7 Types of Sales Funnels

Depending on your objectives and business, you can use different types of sales funnels. We’ll provide you with the most popular ones.

Lead generation sales funnel

This funnel is designed to capture prospects' contact data for further interactions. To get potential customers’ email addresses, companies should establish brand awareness first. They achieve this through ads displayed on search engines and social media platforms, which can target individuals who have searched for or explored similar products. As a result, potential customers become aware of the company and its offerings.

After that, this business provides these users with lead magnets, encouraging leads to share their contact data in exchange for useful information, including webinars, eBooks, whitepapers, etc. It allows marketers to interact with prospects using email campaigns or special offers on social media. If done correctly, it results in conversions.

Product launch funnel

This funnel is perfect for those who launch new products and want to raise awareness about them to a wide audience. Marketers use teasers, email sign-ups, and sneak peeks to raise awareness and encourage interest. During product launches, businesses conduct webinars, organize live events, and provide special offers to boost sales. After customers make orders, companies still follow up with their clients to encourage repeat purchases.

Webinar funnel

This type of sales funnel implies using webinars to educate potential customers about products and convert them into customers. In this case, a webinar serves as a lead magnet and helps drive traffic to businesses’ landing pages and encourage conversion. Companies can leverage various approaches to bring potential customers to their landing pages, including advertising campaigns on search engines or social media networks that cover sign-up forms for upcoming free webinars.

After prospects sign up, they receive information about the webinar and reminders about its date and time. Once marketers provide leads with value during this online event, they can also offer some additional perks when these people decide to purchase products.

Membership funnel

Brands having products based on membership need to develop this type of funnel to reach their business goals. It allows them to convert users into subscribers or members of a specific service. It all starts with promoting the service through content marketing and advertising and educating the target audience about its benefits. To drive interest and sign-ups, marketers often use a free trial or limited access. At the consideration stage, businesses ensure testimonials, community benefits, and exclusive content. Finally, limited-time offers and easy sign-up encourage prospects to convert into customers by signing up for a paid subscription.

Tripwire funnel

The tripwire funnel uses an attractive low-cost offer to convert more prospects into customers and encourage them to make bigger purchases in the future. It aims to acquire new customers faster and later upsell some more expensive products, bringing a company higher revenues.

Daily deal funnel

This sales funnel is similar to tripwire, yet it’s limited in time. Brands offer products for an extremely low price but during a specified timeframe, which usually lasts 24-48 hours. It’s designed to drive interest in a large number of potential customers by providing an enticing offer. Later, marketers upsell products that have a bigger price tag.

Live demo funnel

When it comes to offering complex products or services that require comprehensive research from customers to choose the right one, it’s a must to consider a live demo funnel. It often refers to services or products potential customers should test first to understand if they are suitable for their primary goals. Companies demonstrate their products in real time, allowing prospects to experience them without paying any money. By providing this experience to leads and answering all the questions that might appear during the demonstration, businesses can establish trust, encourage transparency, and build strong relationships with prospects.

Now that you know what type of funnel your business needs, it’s time to develop it. Below is a step-by-step guide to building your sales funnel seamlessly.

How to build a sales funnel?

When you develop a sales funnel for your business, you need to consider several steps to effectively lead prospects through the buying process and ultimately result in sales. That’s why we’ll provide you with a detailed guide on how to do it right.

1. Identify your target audience. Consider conducting market research to determine your target audience. It’s necessary to find out more information about their demographics, gender, preferences, needs, and problems. To use all the information effectively, you should develop your buyer personas. They will contain all the essential information about your ideal customer. You can create several personas to represent several audience segments.
2. Use automation for higher efficiency. When developing a sales funnel, you need automation to gather and collect contact information, create email campaigns, send messages through chatbots, deliver SMS, and more. A service like SendPulse will help you handle all these crucial tasks using one platform. You can use its CRM, send personalized email campaigns, deliver SMS, create web push notifications, and build landing pages without knowledge of the code.
3. Establish awareness of your brand and product. Depending on the product you offer, you should build brand awareness using various marketing tools. These might include content marketing like blogs, videos, infographics, SEO strategies, social media campaigns, and paid advertising like Google Ads and Facebook Ads.
4. Encourage interest. Consider giving potential customers something that will drive their interest in your company. You can offer lead magnets, including eBooks, webinars, or free trials, encouraging leads to share their contact data with you. You should also use email marketing to send relevant content and nurture leads. Building engaging landing pages with visible clear call-to-action buttons enables potential customers to interact with your business.
5. Develop an effective lead nurturing strategy. The next step implies educating potential customers about the product and establishing trusting relationships with them. You can do it by sending personalized email campaigns, sharing case studies, testimonials, and success stories, and providing interactive and engaging content such as quizzes, surveys, or live chats. All these marketing tools help you address challenges, encourage credibility, and establish interactions.
6. Facilitate decision-making process. To enable prospects to make well-thought-out decisions, you need to provide them with all the necessary information and materials. These include demos, free trials, FAQs, and arguments. You should also consider sending prospects limited-time promotions, discounts, or exclusive deals to encourage fear of missing out and drive instant action.
7. Contribute to faster conversions. To encourage more conversions, you need to make the checkout process as simple as possible with all the instructions and multiple payment options available. You should also take care of seamless customer support to instantly provide help and assistance to potential customers. Also, use retargeting for those who have added items to their shopping carts but haven’t checked out yet. It will serve as a reminder of abandoned items.
8. Encourage customer loyalty and repeat purchases. After customers complete purchases, you need to follow up with them. Whether you send email campaigns, automated messages in messengers, or ask for feedback, it will help you show your care and appreciation. Remember that the success of your business depends on loyal customers and repeat purchases. That’s why consider establishing a loyalty program, ensuring excellent customer service, and asking for reviews to drive trust.

The process of building a sales funnel might be slightly different depending on your business, so we need to discover the difference between a B2B and a B2C sales funnel.

B2C vs B2B Sales Funnel

The sales funnel might differ depending on whether you target individuals or businesses. We’ll unveil their distinct features in the section below.

B2C sales funnel

The B2C sales funnel is an individual-focused model outlining the journey customers take from the first contact to the purchase. It represents the stages customers go through, from awareness to the final buying decision.

B2C sales funnel stages

The B2C sales funnel usually consists of four main stages:

1. Awareness: brand captures prospects’ attention using social media ads, display ads, PPC, blog posts, etc.;
2. Interest: marketers engage and educate potential customers to spark interest in the product;
3. Desire: brands demonstrate their offers, communicate their benefits, and facilitate easy decision-making;
4. Action: potential customers convert into clients by purchasing products.

B2C sales funnel content

B2C sales funnel content varies depending on the stage prospects move through. At the awareness stage, you should capture attention with the help of social media ads, display ads, PPC, and blog posts. The interest stage usually includes using email newsletters, eBooks and guides, webinars, podcasts, detailed blog posts, etc. Special offers and discounts, free trials and samples, abandoned cart emails, and product videos help you drive the desire of prospects to take action. After customers complete their orders, marketers often send order confirmation emails, thank-you messages, onboarding emails, and more.

B2B sales funnel

A B2B sales funnel is a business-focused model representing the journey business clients take and often targets a group of decision-makers rather than individual customers. It outlines the stages decision-makers take before purchasing a product. Usually, it’s a complex and time-consuming process that can last for years.

B2B sales funnel stages

The B2B sales funnel consists of the following stages:

1. Awareness: decision-makers find out about the product;
2. Interest: marketers educate business clients about the product;
3. Consideration: a decision-maker shares information with other company reps and conducts a meeting;
4. Intent: brands conduct format pitch presentation or product demonstration;
5. Evaluation: decision-makers review presentations and product demonstrations while comparing with offers from other companies;
6. Purchase: a business client selects a company and completes the transaction.

B2B sales funnel content

Companies use blog posts, whitepapers and eBooks, social media posts, infographics, and press releases at the awareness stage. At the interest stage, they send email newsletters, conduct webinars, share case studies, and provide live product demonstrations. Product comparison guides, in-depth case studies, testimonials and reviews, and ROI calculators are helpful at the consideration stage. With customized proposals, free trials or demos, pricing discussions, consultation calls, and live chat support, companies strive to drive intent. At the evaluation stage, businesses often call out to decision-makers by using one-on-one meetings, references and testimonials, and technical documentation to make them consider purchasing the product.

Understanding the difference between B2C and B2B sales funnels

The first difference is the complexity and length of the sales funnel, which is much simpler and faster for B2C companies. Usually, a B2B sales funnel consists of 6 stages, while a B2C sales funnel has only 4 stages. When you develop a B2B sales funnel, you target a group of decision-makers you can find on LinkedIn for further communication. A B2C sales funnel is designed for individuals you can interact with through ads on social media, websites, pay-per-click ads, etc.

In short, the differences between the two are crucial and comprise the following factors: the number and types of sales funnel stages, complexity and length of the funnel, and ways of communication.

Now that you know the difference and have decided to develop a B2C sales funnel for Instagram, we invite you to explore our step-by-step guide on doing it.

How to build an Instagram sales funnel?

Developing an Instagram sales funnel requires you to strategically outline your steps and take advantage of all the features this social media network offers. Below is a detailed guide on how to do it effectively.

1. Switch to a business Instagram account. Instagram’s business account offers many more features for businesses. With its help, you’ll no longer have any restrictions as a seller. This makes your brand more visible to the target audience and allows you to reach more people. You can also access Instagram’s analytics and run paid ads.
2. Collaborate with the right opinion leaders and use ads to build awareness. Influencers’ word-of-mouth promotion and social proof encourage trust among followers and endorsements. Influencer marketing helps your brand generate more prospects, have a bigger following, and have a higher brand awareness. You can also use sponsored content to become visible to the right people looking for a solution similar to yours.
3. Drive interest in your audience with Stories. Consider using Stories to communicate all the important information prospects might need to know. You can make short videos of your product to show it in real life, share user-generated content, or add links to your website for further exploration. You should add some of the Stories to Highlights so that leads can check them anytime they need to.
4. Create how-to content to get into the consideration stage. At this step, you need to showcase all the benefits of your product and how it can become a perfect solution to prospects’ problems. This is the moment when you need to persuade leads and find arguments to their objections that your product is the best among all the available options within the market.
5. Use Instagram shopping tools to encourage conversion. Numerous Instagram features, including the Shop tab on your profile, live shopping events, product collections, shoppable posts, and product stickers in Stories, can help your prospects complete their purchases in-app.
6. Encourage user-generated content after purchase. UGC is a low-cost way of promoting your product and encouraging more purchases. When your current customers create content with your product and share it on social media using a hashtag or a tag, it helps prospects decide whether to buy it. Since people trust other clients more than ads from brands, it’s valuable to have UGC at hand.

If you are thinking about creating a sales funnel for Facebook, too, we advise you to review the guide below to ensure you take all the necessary steps and do them successfully. Let’s dive in.

How to build a Facebook sales funnel?

Brands often create a sales funnel for Facebook in addition to using Instagram. That’s why we’ve prepared a step-by-step guide for applying Facebook tools for it.

1. Establish brand awareness using Facebook ads. The first stage of the sales funnel requires you to encourage brand awareness on Facebook. You can do it easily by incorporating Facebook advertising. This way, you’ll be able to reach potential customers who look for similar products as those you offer.
2. Create Page Stories. By sharing behind-the-scenes, the history of your brand, showcasing the details of your products, and various events with prospects, you can spark their interest. Educating leads about your company allows you to bring them to the next stage called “interest.”
3. Add short videos to show your product as a solution. Consider sharing reels with your audience and positioning your product as a perfect solution for their issues. Besides short videos, consider using photo or carousel posts which are also great for this stage. When adding content, ensure it covers only one point to avoid distraction.
4. Add links to your products for conversions. Use the swipe-up feature to encourage action among those who are ready to purchase your products. By placing the links on your Page Stories, you can bring potential customers to your website, make them explore available items, and choose their perfect solution.
5. Create posts with polls for feedback. After customers complete purchases, keep up with them by sharing posts with polls. They will help you collect feedback and reviews from existing clients and share their answers with prospects.

Now that you know how to create a sales funnel for Facebook, it’s time to find out how to effectively apply all the channels in your sales funnel and spend minimum time and effort. Below, you’ll find the best 5 software to reduce your team's workload.

There are so many platforms out there you can use and apply for different channels, yet they all differ in price, features, and usability. To simplify the search for your perfect fit, we’ve decided to list affordable platforms with features suitable for multiple channels.

SendPulse

SendPulse is a multipurpose solution that combines CRM, email marketing service, marketing automation, chatbot builder, landing page and web push notification creator, and much more essential for moving prospects down the sales funnel. With its help, you can build sign-up forms of various types and strategically place them on any webpage to attract subscribers and capture leads. Then, automatically add this contact data to your CRM and store it securely for further interactions.

To generate interest and encourage conversions, you can communicate with potential customers through targeted email campaigns, chatbot messages, SMS, and web push notifications. The software’s comprehensive analytics enables you to segment your audience based on age, gender, geographical location, and activity to craft campaigns resonating with your subscribers’ needs. After interacting with leads, you can manually or automatically add deals to your CRM so that your team knows what steps to take next.

Below you can see how to create a subscription form with a lead magnet and capture leads using SendPulse.

Pricing: The service’s free plan includes 5 users and 2 sales pipelines. The cheapest plan allows you to have 10 invited account users and 5 sales pipelines for $29.80 annually.

Leadpages

Leadpages is a powerful sales funnel tool enabling companies to easily build highly converting landing pages and subscription forms. With a library of 250 ready-made templates and a user-friendly drag-and-drop editor, you can tailor compelling and easily customizable landing pages and sales funnels. Also, the software provides useful marketing tools like pop-ups, alert bars, and lead-generation forms.

With Leadpages, you can run A/B tests in just a few minutes. It enables you to test different text, images, CTA buttons, and more and identify campaigns that work best with your audience and resonate with their needs.

Below, you can observe the process of creating a subscription form using the software.

Pricing: Although the platform doesn’t offer a free plan, you can use the service for 14 days during the trial. You can also pay $37 monthly for an annual subscription. This cheapest subscription includes 10,000 monthly AI Engine credits, 250+ templates, 1 custom domain, unlimited traffic and prospects, and tools like pop-up forms, alert bars, analytics, and real-time optimization tips.

ActiveCampaign

ActiveCampaign is another sales funnel software that enables access to email marketing, sales pipeline management, multichannel marketing, customer relationship management, and other valuable tools. The platform is a good fit for startups, enterprises, and businesses in various industries.

With the service’s landing page builder, you can create appealing landing pages and embed custom sign-up forms to capture contact data and promote products. In addition to subscription forms, you can build questionnaires, lead magnets, or any other form you need and seamlessly integrate it into your landing page. After gathering prospects' email addresses and other details, you can automatically transfer and store them using ActiveCampaign’s CRM. For further interactions, you can use the platform’s email marketing, marketing automation, SMS, and other features.

Below you can see how to create a series of follow-up emails when designing an upsell campaign with ActiveCampaign.

Pricing: Although the service doesn’t provide a free plan, you can test the functionality during its free 14-day trial. After it expires, you’ll have to buy a paid subscription which costs $79 monthly for 1,000 contacts, 3 users, unlimited automation actions, web forms, A/B testing, and more.

Keap

Keap is a comprehensive sales and marketing platform that guides potential customers through your sales pipeline. It offers various useful features, including a user-friendly drag-and-drop sales funnel builder, CRM system, automated lead scoring, appointment booking, customer surveys, automated follow-up emails, and more.

Keap empowers you with extensive analytics and reporting capabilities, enabling you to monitor ROI, track contact performance through each stage of the customer journey, forecast payments, etc. Even more, Keap supports numerous integrations to streamline lead generation, sales tracking, email marketing, reporting, and scheduling.

Below, you can find out how to manage contact cards in the platform’s CRM.

Pricing: Although Keap has no free plan, it has a 14-day trial to test the features. Once you identify it as the perfect solution, you can have a paid subscription for $159/month for 1,500 contacts and 2 users. In addition, you can take advantage of email marketing, marketing, sales, workflow automation, CRM tools, etc.

HubSpot

HubSpot is a multi-channel sales funnel solution providing marketers with powerful features to boost conversions, including customizable landing page templates, a content creation builder, distribution channels, and email automation. Its CRM system allows you to store information about each interaction with prospects and gives a hint to the sales team on further actions.

One of the service's most remarkable features is its automatic lead prioritization based on prospects' likelihood of converting into customers. These lead scores enable you to focus on qualified prospects and outline a sequence of interactions. Potential customers with high scores can be assigned to the sales team, while those with lower scores should be assigned targeted workflows.

Below, you can see the process of segmenting leads using the service.

Pricing: You can use CRM for free, but to unlock advanced features, you’ll need a paid plan. Its cheapest plan starts at $20/month if paid annually and provides two deal pipelines per account and 50 active segmentation lists.

When using one of the platforms and its analytics, you need to understand the key metrics for assessing the performance of your sales funnel stages. That’s why we’ve listed the most essential key performance indicators for you to consider.

To assess the effectiveness and overall performance of your sales funnel, you need to be aware of the key performance indicators. They help you identify strengths and weaknesses within your funnel. So, let’s explore the main metrics to track.

Bounce rate

Bounce rate is the percentage of users who leave a web page in seconds after landing on it without performing any action. Several factors may contribute to a high bounce rate, including slow website speed, difficult navigation, or a poor overall user experience. This metric enables you to identify issues with your website, such as confusing navigation, slow loading times, or irrelevant content. To calculate the bounce rate, you can use the following formula:

Bounce Rate = (Single-Page Sessions / Total Sessions) * 100

Lead conversion rate

Lead conversion rate is the percentage of prospects who take a desired action, such as purchasing, signing up for a newsletter, or requesting more information. It allows you to evaluate the effectiveness of your sales process, sales strategy, and marketing campaigns. With its help, you can figure out how high your ROI is and how low your customer acquisition cost is. You can use the formula below to estimate this measure:

Lead Conversion Rate = (Number of Conversions / Number of Leads) * 100

Cost per lead

Cost per lead is a metric that measures the average cost to acquire a new potential customer for your business. It enables you to efficiently allocate resources, predict future marketing expenses, evaluate the effectiveness of your marketing campaigns, and compare their performance across channels you use. The formula below will help you calculate this metric for your company:

Cost Per Lead = Total Marketing Spend / Number of Leads Generated

Email open rate

Email open rate is the percentage of emails that are opened out of the total number of emails sent in a specific email marketing campaign. This metric indicates how effectively you can capture a subscriber's attention with the subject line and whether your emails reach the inbox instead of the spam folder. The email open rate allows you to measure subscribers’ engagement and interest in your brand and products, assess the effectiveness of your subject lines, and evaluate your company’s sender reputation and trustworthiness. You can estimate your email open rate with the following formula:

Open Rate = Unique Opens / (Sent Emails - Bounced Emails)

Engagement rate

Engagement rate is a metric assessing the level of interaction of the target audience with your content. It is typically to evaluate the effectiveness and performance of your social media marketing strategy and to determine how well different content formats resonate with the audience. Engagement includes actions such as likes, comments, shares, retweets, saves, clicks, and other types of interaction. You can measure your engagement rate using the formula:

Engagement Rate = (Total Engagements / Total Impressions or Followers) * 100

Click-through rate

Click-through rate is the percentage of people who click on a link, advertisement or email out of the total number of people who view it (impressions). It helps you evaluate the effectiveness of online advertising campaigns, email marketing, and other digital content and identify issues that influence your business. A high click-through rate indicates that your content is engaging, relevant, and compelling. You can use the formula below to measure your CTR for different channels:

Click Through Rate = (Number of Clicks / Number of Impressions) *100

Close rate

Close rate is the percentage of sales prospects who convert into paying customers. This metric enables salespeople to assess the effectiveness of their marketing efforts. It also helps you find out the quality of your leads and forecast future revenues. Use the formula below to calculate the metric for your business:

Close Rate = (Number of Closed Deals / Number of Prospects) * 100

Average order value

Average order value is a metric assessing the average amount of money clients spend on a single order over a specified timeframe. This metric helps you understand how much revenue is generated per transaction and whether your business needs to attract more customers to increase profitability. By analyzing AOV, you can also identify which products are most popular among customers and allocate more resources to producing or marketing these items. The formula below will enable you to calculate the metric:

Average Order Value = Total Revenue - Number of Orders

Customer acquisition cost

Customer acquisition cost is a metric that evaluates costs associated with acquiring new customers, including marketing and sales expenses. It enables you to ensure these costs don't exceed the revenue generated from selling your products. Understanding CAC allows you to optimize your strategy to reduce these costs and improve profitability. Use the following formula to calculate it:

Customer Acquisition Cost = Total Acquisition Costs / Number of New Customers Acquired

Sales return on investment (ROI)

Sales ROI is a measure of evaluating the profitability of sales activities by comparing the revenue generated from sales to the costs associated with those sales. This measure helps you determine the effectiveness of your sales efforts and assess whether they provide sufficient returns relative to the initial investment. The formula below allows you to estimate the metric for your company:

Sales ROI = (Net Profit / Sales Costs) *100

Now that you know the metrics and all the essential information about developing an effective sales funnel, let’s proceed to the sales funnel optimization strategies. They will help you focus on achieving high conversion rates.

Sales funnel optimization is a must for better conversions and business growth. Let’s discover the best 10 working tips.

1. Offer a more valuable lead magnet. To encourage potential customers to share their contact data with you, you should provide something valuable instead. Your lead magnet can be presented through eBooks, webinars, free trials, or exclusive content and solve a specific problem. This way, you’ll have more leads willing to share their email addresses with your brand.
2. Improve your landing pages. Pay attention to your landing pages and their quality. To effectively convert leads into clients, your page should include clear and persuasive headlines, strong and visible CTAs encouraging action, a simple design with easy navigation, appropriate layouts, and placement of the landing page elements. Then, check whether all the elements ensure a seamless customer experience.
3. Send personalized email campaigns with relevant offers. You can effectively nurture leads with targeted email campaigns. These campaigns should be tailored based on prospects’ behavior, interests, and demographics. This information will help you deliver personalized campaigns that resonate with subscribers’ needs and challenges.
4. Consider using retargeting advertising. Focus on the prospects who haven’t converted initially by incorporating retargeting. With its help, you’ll be able to effectively reach these leads and remind them about the products they are interested in. You should choose the platforms depending on the networks your potential customers prefer to use, among them Google, Bing, Yahoo!, etc. To increase the likelihood of conversion, consider offering a discount on the items that leads have shown interest in.
5. Make the checkout process as simple as possible. Focus all your efforts on simplifying your checkout process to decrease the number of abandoned items. You’ll encourage more conversions by reducing the number of steps during the checkout, providing guest checkout options, ensuring multiple secure payment options, and using security badges.
6. Optimize your website speed and mobile user experience. To reduce bounce rates and maintain user satisfaction, ensure your site loads within 1-2 seconds. You can check your loading speed using special tools and optimize it to reduce cart abandonment rates. Improve your site speed by optimizing images, limiting redirect usage and the number of HTTP requests, and leveraging browser HTTP caching. You should also focus on providing a seamless experience for smartphone users.
7. Incorporate social proof. To build trust and credibility and ultimately drive conversions, share evidence demonstrating the value of your product to customers. Displaying customer testimonials, reviews, case studies, user-generated content, and influencer endorsements demonstrates the real solutions your product provides.
8. Interact with customers after purchases. Ensure to follow up with customers after conversions. You need to send personalized thank-you emails, new product launches, information about discounts, promotions, and special deals. All these campaigns will help you encourage repeat purchases, which is crucial for your business success. Consider building a loyalty program to reward clients for their purchases. It will make them buy more to get some gifts, discounts, and other perks.
9. Establish referral programs. Referral programs will help you get more qualified leads and faster conversions. At a low cost, you’ll be able to encourage word-of-mouth promotion, repeat purchases from existing customers, and a wider customer base.
10. Use A/B testing. With A/B testing, you can identify the best option for your marketing campaigns and their elements. It helps you determine the message you should send to reach better conversion rates.

Now that you know how to boost your conversions, it’s time to find out how to apply these tips using sales funnel automation. Let’s dive in.

Sales Funnel Automation

Creating and optimizing sales funnels is a complex process that requires a lot of time and effort from your team when done manually. Fortunately, everything is much easier if you use automation. In this section, we’ll explain why you should incorporate automation and how to do it using special tools.

Sales funnel automation is the process of using special software and tools to facilitate all the stages of a sales funnel which starts with lead generation and ends with post-purchase interaction and customer retention. Let’s discover some reasons to implement it.

Why do you need sales funnel automation?

There are numerous reasons for businesses to use automation tools for developing their sales funnels. Automation helps:

• perform repetitive and time-consuming tasks on autopilot and enable sales and marketing reps to focus on high-priority issues;
• ensure consistency across all stages and channels, avoiding many manual errors;
• deliver timely, relevant, and personalized messages that resonate with a sales funnel stage;
• provide a personalized experience based on behavior, preferences, and sales funnel stage;
• perform lead scoring on autopilot;
• send follow-up messages that help engage with prospects and move them down the funnel;
• deliver automated lead nurturing campaigns on time;
• analyze performance and optimize sales funnel stages for better results;
• reduce operational costs;
• gain competitive advantage.

Now that you know the perks, you might wonder how to develop an automated sales funnel. You can find out more about this topic below.

How to create an automated sales funnel?

Developing an effective automated sales funnel involves taking several essential steps and using special automation tools. Here’s a step-by-step guide on how to combine everything wisely.

1. Determine your target audience. Consider creating buyer personas to represent your ideal customers. These personas should be developed based on the demographics, behavior, and pain points of your target market. Then, divide customers into segments based on this information to deliver more relevant and targeted messages.
2. Outline the sales funnel stages. Develop a content strategy for every stage of your sales funnel. You should create blog posts, social media content, and videos to attract prospects and educate them about your products. You should also provide whitepapers, case studies, and webinars to nurture leads. Product demos, free trials, and special offers will help you encourage the desired action at the decision stage.
3. Identify the perfect software. You need to have several tools for developing and managing your sales funnel effectively. These are CRM systems, email marketing software, and marketing automation tools. Since the integration of different platforms can be a challenge, you should find a service that combines all the necessary marketing tools. For example, SendPulse is a multipurpose solution offering CRM, email service, Automation 360, chatbot builder, and many more products valuable for marketers.
4. Think of the lead magnets. Consider the information your prospects will find useful to create relevant lead magnets. When you provide something like eBooks, whitepapers, checklists, or free trials, users will be more likely to share their contact data instead. Also, think of the placement of your lead magnet wisely. Your landing page should have clear and visible CTAs so that leads know where to input their email addresses.
5. Automate email sequences. Use special automation platforms to develop email sequences to welcome new subscribers, nurture leads, or thank them for the purchase. This content should be informative and engaging to drive action.
6. Map out your lead-scoring strategy. Divide prospects into groups based on their engagement and likelihood of conversion. Then, automate actions based on the leads' scores. This way, you’ll be able to notify the sales team about potential customers who are close to purchasing.
7. Consider using multichannel marketing. You can use automation not only for emails but for social media campaigns as well. Platforms like Hootsuite and Buffer schedule and share posts at a specific time and date.

Now let’s find out how brands managed to implement the guide and reach their business goals.

Best Sales Funnel Examples

There are numerous excellent examples of sales funnels from different brands. We’ve picked up the most interesting ones that spike interest once you land on their websites so let’s explore them right now.

OptinMonster

This lead generation software starts its sales funnel with powerful lead magnet users that users encounter when they visit OptinMonster’s website. The lead magnet appears as a pop-up offering potential customers a 60% discount to get started today, which is highly enticing. The word “today” creates a sense of urgency and fear of missing out, as the offer appears to be time-limited. When users explore the website, they can find everything to explore the service and its product, case studies, social proof, and customer testimonials. The list of companies that trust and use OptinMonster further reinforces the platform's credibility, positioning it as a solution to prospects' problems.

TOMS

This well-known shoe brand uses gamification to collect contact data. When users land on its website, they can instantly spin a wheel to receive some perks, including discounts on the first purchase. To get the promo code for the discount, prospects need to share their email addresses, initiating interaction with the brand. If leads do not use the code, the brand follows up with personalized offers and special deals to encourage further engagement.

Tylko

This interior design brand incorporates influencer marketing to establish brand awareness, improve visibility, and boost reach. The company provides followers of an influencer with a code that gives 40% off for orders over 500 euros. The offer is limited in time—it’s only available until July 31 and visible for 24 hours because it’s in an Instagram story. Followers can click the link and make orders right away after seeing the Story.

Congrats! Now you know what a sales funnel is and why it’s essential for every business. We hope that our tips and examples will help you develop a sales funnel that converts.

Last Updated: 28.09.2024