The 4 Sales Funnel Stages (Definition and Benefits)

By Indeed Editorial Team

Published June 4, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Sales funnels are an invaluable part of a business' marketing and sales strategies. A sales funnel shows how potential customers move from awareness and consideration to purchasing a product or service. You can make your marketing strategies more successful and efficient by understanding how to design a sales funnel.

In this article, we examine what a sales funnel is, explore each of its stages, review its benefits, and discover a few sales funnel tips.

What is a sales funnel?

The sales funnel represents the customer's progress as they move through the sales process. By coordinating buyer and seller activities, a sales funnel streamlines selling goods or services. Every stage of the funnel brings the buyer closer to purchasing. Most companies use the sales funnel to alter their strategies and marketing methods in response to their consumers' behaviour.

A sales funnel includes many marketing strategies, including copywriting, blogging, email marketing, and social media tactics. Increasing the funnel's efficiency at each stage is a key marketing priority because it makes the entire sales process more profitable.

A sales funnel displays each stage as an inverted pyramid. The funnel's top is wide, showing the company has access to many prospects. By expressing interest and engaging with the organization's marketing actions, potential customers show a deeper commitment and interest. This leads prospects down the sales funnel, becoming more qualified as potential customers.

Leads with the greatest potential keep moving down the sales funnel. The funnel narrows as it descends, with fewer prospects at each stage. At the end of the sales funnel, marketing strategies become more targeted to help convert the remaining prospects into clients or customers.

Related: How to Get into Sales in 5 Steps (With Tips and FAQs)

4 sales funnel stages

The following are explanations of the four sales funnel stages:

1. Awareness

The awareness stage of the sales funnel occurs when consumers first become aware of a company's product or service. Business advertisements, social media, or existing customers may inform prospects about the product or service. At this stage, the company's goal is to generate a prospect's interest through initial exposure. For example, a business may use a valuable free offer to get an email address or phone number from a prospective customer.

Related: Relationship and Effect of Customer Service in Sales

2. Interest

The next step in the sales process is to develop the prospects' interest in the business and educate them about its products and services. The company also uses this stage to build authority and credibility for its brand. Prospects may take actions, such as following the brand on social media, signing up for the company's email list, and sending direct messages to express interest. The following are a few suggestions to help a company gain interest:

  • Create blog posts that apply to ideal customers.

  • Identify the keywords prospects are using when they conduct online searches.

  • Promote the business's website or social media profiles using paid traffic.

  • Make social media promotions and posts engaging by addressing the pain points of the ideal customers.

  • Consider guest posting or blogging on accounts with a similar following to the company's ideal customer.

  • Develop highly shareable images and infographics for branding.

3. Desire

During the desire stage, prospects are more likely to qualify as sales prospects. Prospective customers actively seek the most suitable product and service that can satisfy their desires and fit their budget. Prospective customers may look at multiple offers from different companies at this stage. The company's goal is to appear as the best business to give the customer the product or service they desire.

A business can show how its products or services benefit customers by providing reviews and testimonials. As prospects become more knowledgeable about the product and service's value, they can investigate deeper into pricing and packaging options. Sales pages, webinars, and personal phone calls help at this stage to sway prospects to purchase.

Related: Effective Objectives for Your Sales Resume (With Examples)

4. Action

Prospects make a purchase during the action stage of the funnel. This turns them from a prospect into a customer. The top priority of the company after the sale is to satisfy the expectations of the new customer. The company may offer its customers additional support or educational materials about the product or service. Helping customers understand how to use the product or service effectively can improve the value of what the company is offering and increase their satisfaction with their purchase. Here are a few marketing strategies to help satisfy new customers:

  • Maintain the customer relationship by sending relevant and consistent emails.

  • Promptly resolve all questions and inquiries regarding the company and products.

  • Share screenshots, videos, or photos when the business gets reviews or features in the media.

  • Use newsletters and social media to share customer testimonials, case studies, customer success stories, and product reviews.

  • Provide limited-time offers, bundles, or discount codes to offer special pricing or packages.

  • Provide consultations or live demonstrations.

  • Display and promote product comparisons.

What are the benefits of a sales funnel?

Here are a few benefits of using a sales funnel:

  • Prioritizes customer interests: The sales funnel strategy simplifies marketing. By visualizing the funnel, marketers can decide on the best sequence of steps to optimize the customer experience.

  • Improves content strategies: When a company visualizes customers' buying journeys, marketing and sales departments can collaborate more effectively and can deliver more relevant content to users. By implementing dynamic content strategies and using an agile approach, content creators can connect to their customers in a way that resonates.

  • Enhances personalization: With the ability to visualize customers' journeys and combine them with first-party intent data, online browsing patterns, and past purchasing habits, marketers can offer hyper-personalized experiences. By gauging the number of visitors who arrive at the end of the funnel, marketers can forecast marketing return on investment (ROI).

  • Optimizes conversion rates: Marketers can continuously change their marketing strategies and fix challenges as they emerge. Companies that combine sales funnel marketing with business intelligence platforms can identify what percentage of their total visitors convert into prospective or long-term customers.

  • Improve financial forecasting: When you use a sales funnel, you can determine the average time it takes to move a prospect from the awareness stage to the action stage. This can help determine whether the business is meeting sales targets.

Related: What Are Consultative Sales? (With Steps for Success)

Tips for using the sales funnel stages

Here are a variety of tips you may consider when using a sales funnel:

  • Improve your understanding by using analytical tools. Being more familiar with your prospects can help you market to them more effectively and convert them into paying customers. By looking at your competitors' traffic sources and best-performing content, you can also use analytics to identify the most profitable marketing methods.

  • Create informative educational content. An organization that educates prospects about its products, services, and brand establishes itself as an authority and useful resource and builds trust.

  • Use engaging media. It's important to use engaging media to help prospects understand and explore the products or services and keep their attention. A company is more likely to get a sale if they can explain why its products or services are right for prospects at the interest stage of the sales funnel.

  • Build trust with customer reviews and testimonials. A successful sales funnel relies heavily on trust. Customers are more likely to form long-term relationships with a company if they trust it acts in their best interest.

  • Use strong calls to action (CTAs). Ensuring you use strong CTAs is a great way to optimize your sales funnel. A clear and straight-to-the-point CTA can inspire prospects to act by purchasing the product or service the business is promoting.

  • Reduce cart abandonment by optimizing online checkout carts. Cart abandonment is a common reason prospects leave a sales funnel. Offering the option to check out as a guest, simplifying checkout processes, and offering more payment options are a few methods you can use to optimize checkout processes.

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