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What Is a Sales Funnel?

Understanding the Basics of Sales Funnels: A Step-by-Step Guide

In the digital marketing industry, the sales funnel is one of the core concepts which can take your business from the unknown to a multi-million-dollar marketing machine, and simplify the process of turning new visitors into lifelong customers. 

Let’s explore the sales funnel in great detail and see how this marketing concept can help you achieve your business goals.

1. Why Is Creating a Sales Funnel Important? 

As a business owner, you are responsible for the overall strategy of your business, from product development to sales and marketing. Good ideas and motivation alone are not enough to succeed - you need to understand effective strategies like the sales funnel to achieve real progress.

Here are three reasons creating a sales funnel is crucial for your business growth: 

  • Systematically Generates New Leads + Build Relationships: A sales funnel could help you generate new leads in a cost and time-efficient way, it’s a way of generating leads and building long-lasting relationships with your audience.
  • Turns Cold Leads into Paying Customers: Sales funnels are a proven strategy to turn cold leads into a warm audience and paying customers.
  • Helps Deliver The Right Message At The Right Time

2. How A Sales Funnel Works

Each funnel pushes qualified leads into the next stage and removes those that aren’t a good fit for your products or services

Let’s discuss the stages of a sales funnel to understand how sales funnel works: 

  • Stage 1: Discovery/Awareness Phase: Ideal customer in awareness stage realizes problem, but struggles to identify it. They need resources/ solutions to learn more. Content on your products/services can help. Create content to educate prospects on challenges/problems.

           >>Convert prospects into leads and move them down the funnel.

  • Stage 2: Interest Phase: Prospects understand problem, but seek more info. They consider all available solutions, not just your product. They're looking for types of solutions. Create content explaining how your product solves their problem and why they should choose it.
  • Stage 3: Decision Phase: At the bottom of the sales funnel, potential customers are ready to buy and are considering you and your competitors. They know about their problem and potential solutions, and are asking vendor-specific questions.

           >>To make your business stand out, offer attractive incentives such as free shipping, bonus      products, or discounts. Make your offers so appealing that potential customers will choose you over your competitors.

  • Stage 4: Action Phase: At the very bottom of the sales funnel, people take action. They buy your products or services and you finally convert a cold lead into a customer through a well-defined process. At this stage, you should be thinking about turning one purchase into five or ten.

            >> To keep your customers happy, you have to help them thoroughly with all aspects of their problems.

3. A Guide To Converting Prospects Into Customers With Effective Content

Top of the funnel: (Discovery and Awareness)

  • Ideal customer realizes they have a problem, but struggles to identify it
  • Need to seek resources that educate them on the problem
  • Create content that educates them on their challenges or problems

Middle of the funnel: (Interest and Decision)

  • Prospects understand their problem and know something about your business, but want to learn more
  • They are not yet ready to buy or sign up for your products
  • Looking for possible solutions
  • Provide content that tells how your product or service can help them solve their problem

Bottom of the funnel: (Action)

  • Potential customers are ready to buy and considering you and your competitors
  • Make attractive offers to set your business apart
  • If they decide not to buy from you, create nurture campaigns to stay top of mind
  • Use remarketing and lookalike audiences to reconnect with potential customers
  • Encourage feedback and focus on customer retention
  • Help customers with all aspects of their problem


  • Consider what type of content to create for prospects in different stages of the funnel.

4. How To Create Content For Each Stage Of The Funnel

  • Top Of Funnel: Blogging, Social Media Posts, How-To Videos, Webinars.
  • Middle Of Funnel: Case Studies, Product Comparisons, Lead Magnets.
  • Bottom Of Funnel:  Free Trial, Consultation Offer.

5. Final Thoughts

A sales funnel is a journey. A prospect discovers your business, learns more about it, decides which product they should buy, and finally makes a purchase.

As a business owner, your job is to clearly define that journey and prepare a game plan to move people from one stage to another.

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