Typical Sales Funnel Stages

Typical Sales Funnel Stages (Simple guide)

All right, today we will talk about sales funnels. You will learn what exactly are sales funnels and what do the typical stages of sales funnels look like.

Many people who are new to online marketing think that getting traffic to your site or other content is the hard part. This is not actually true.

While traffic, either natural or paid, is mandatory for successful online business as you can’t run a business without conversion it’s as important to have the right kind of customers and convert them to buying ones.

Which do you suppose is more useful for your business, having ten thousand visitors to your offer in a month but none of them are interested in buying or having ten visitors that are all interested in buying?

It’s actually much harder to get the right kind of traffic (meaning people that are interested in buying) and then actually have them make the purchase decision (converting) than to simply get traffic.

This is why the first part of a sales funnel is always picking the right customers. Now I do understand that the more visitors you have, the more likely you are to make sales, it’s a numbers game. But the point I’m trying to make is that quality matters over quantity.

In the online world picking the right customers is the first part of your sales funnel. I’ll tell you in a second how you can get the right customers, aka targeted traffic, but let’s look at first why you need a sales funnel.

Sales funnels are a must for customer conversion

I hope I convinced you that simply having traffic is not enough to make sales in the online world. To run an actually successful business you will need to have a sales funnel for converting leads into buying customers.

But what exactly is a sales funnel? The purpose of the sales funnel is to move the potential buyer through different stages of building trust and lead them towards a purchase decision.

The whole idea of a sales funnel is to first acquire traffic that is pre-selected to be interested in your offer, then turn that traffic into leads you have direct contact to. You can then build trust with those customers to providing value for free.

Once you have built enough trust with the leads, they are much more likely to convert into buying customers that will buy from you in the future as well.

So a sales funnel guides a customer through a series of steps and offer that are aimed to make a sale. They typically contain upsells and down sells to make sure you convert as high a percentage of your leads as possible.

Yesterday we talked about value ladders. A sales funnel is essentially how you apply your value latter in practice. If you only have a single product with a single price, you could be leaving money on the table.

Let’s look at this through an example. Let’s imagine you have three leads that are interested in your product that costs $50 for example.

The first lead has the $50, is interested in the product. He decides to make a purchase. BOOM! You just made a sale.

Now the second client is on a budget. He really doesn’t have $50 to spare at the moment but is definitely interested in your product. If you don’t apply a sales funnel with down-sell, you will lose this customer.

But if you do offer a down-sell, that still offers a solution to their problem, they are much more likely to make a purchase since they were already interested in your main offer.

Now let’s take the third lead. This time we have a buyer who has a problem and plenty of cash. He might be willing to pay $200 for a more complete solution to his problem. If you only offer the $50 you will leave tons of money on the table.

It’s wise to have a system in place that takes into account all these situations. A well thought out and set up sales funnel takes care of this.

So the sales funnel essentially has two functions. To turn lead into buying customers, and to optimize the revenue you get from a single lead by moving them along the value ladder based on their interest and funds.

Typical sales funnel stages

So now that you understand how important sales funnels are for your online business, let’s look at the typical sales funnel stages in an online context.

There are essentially four main stages that can be divided into smaller chunks. Let’s look at each stage and how they might look like in online marketing with examples.

Typical Sales Funnel Stages

Stage 1: Awareness

The first stage in your sales funnel is spreading awareness. After all, no one can find your business and your offers unless you put it out there.

Building your brand is part of building awareness. A recognized brand will have authority, reputation, and trust. Treat your online business just like you would treat a real business. All your actions need to be in line with your brand.

There are many ways to spread awareness in the online world. Basically they all boil down to content creation as the content is what people consume in the online world.

The most common ways to build awareness to drive traffic are search engine optimized content (i.e. blog), paid ads on different platforms, social media, and YouTube.

There are pros and cons to each. In my opinion, it’s pretty much a preference and resource question which way you want to go.

Search engine optimized content on a site you own is great because it produces passive traffic streams but the con is that it takes a lot of research, time and patience to get good results. You need to build authority for your site.

Paid ads on Facebook or YouTube, for example, can produce great results but you need to know what you are doing. If you don’t know how to create compelling ads and target them properly, you risk losing more money than making.

Social media and YouTube presence and the following can also be great ways to drive traffic to your offers. The downside is that it takes time and talent to become an influencer, your content needs to be good these days.

You also have to produce new content constantly to keep your followers and acquire new ones, this takes a lot of time. But if you enjoy it, it can be very effective.

No matter what your preference is, awareness is the point where you preselect your customers. You want the traffic to be interested in your offer in the first place, so only offer products and services that are relevant to your niche.

So if you create content on a blog or a website, target keywords that are relative to your niche and offers so that the people who find your content through search engines are already interested in the products you promote. Reviews are great for this.

With paid ads, you can, of course, target the traffic depending on the offer, and this is crucial for success with ads. The same goes for YouTube and social media, your following is likely interested in products related to your content.

Stage 2: Leads

The next stage of a typical sales funnel is converting the traffic you create through awareness into leads. Leads are essentially visitors that have shown enough interest in your content and offers that they voluntarily follow you.

The most common way of gathering leads is by building an e-mail list. To get people to join your e-mail you typically use a squeeze page, which is simply a page whose only intention is to entice people to give you their e-mail address in exchange to a tempting gift.

The opt-in offer can be anything from a free ebook to video course or infographic. It can also be an exceptionally good discount of a higher-priced product.

In social media and YouTube also subscribers that receive notifications from you can be considered leads because they have shown enough interest in your content to opt-in for notifications of new content.

Stage 3: Prospects

Every single people that joins your e-mail list is a prospect for sales. This is the third stage of a typical sales funnel. To improve the odds of making sales, you need to treat these prospects with respect.

Before you start selling, you should establish trust by providing additional value to your subscribers in addition to your opt-in gift. This can be anything from tips to personal stories that makes them feel that you are actually a real person that’s communicating with them.

This is typically done with an e-mail autoresponder like AWeber by the way. This way you can automate the whole e-mail follow up process and you don’t have to actually send thousands of individual e-mails. That just wouldn’t make any sense, you know?

Once you have established trust and connection with the prospects, it’s time to introduce your main offer. At this point the people who so your initial content or ad has come a long way closer to trusting you.

If you have managed to build a relationship with them, they are much more likely to buy from you at this point compared to if you would have simply tried to sell them offer at first contact.

If you remember what I said about the value ladder, this is the point of the funnel where you can offer upsells and down-sells as well, which is actually Stage 4 of the sales funnel.

Stage 4: Sales

The final stage of a typical sales funnel is further sales. The best time to offer a down-sell or an upsell is directly after a purchase decision is made.

So a typical sales funnel will have automation to offer a down-sell in case a prospect hits the back button or attempts to close the check-out page.

The same goes for upsells. If a prospect makes the purchase there is usually automation to offer a higher-ticket item like a membership.

Besides direct upsells and down-sells, typical sales funnels will introduce additional offers to existing customers to increase value (remember the value ladder). These could include memberships, loyalty programs, and customer specials.

It’s always valuable to keep in touch with existing customers as they are much more likely to buy from you again compared to new prospects.

Conclusion

That’s it for today! I hope you found this simple guide about the typical stages of a sales funnels in online business useful. If you have any questions, please leave them in the comments section and I’ll get back to you soon!

I’m sure that by now you see the value a sales funnel can provide for your business compared to presenting offers directly. Building a relationship with potential buyers is an extremely powerful tactic for increasing conversions.

Just always remember you are dealing with real people. Be honest, be respectful and treat them like you would like to be treated yourself and they will trust you.

Oh, and only recommend products and services you believe in yourself of course. Nothing breaks trust as bad as getting conned to buy a crappy product that doesn’t offer actual value.

If you found this post useful and want to learn more about online marketing, SEO or simply want out of the rat race, subscribe to my newsletter and bookmark my site. Social shares are always appreciated as well!

Time to wrap this up.

See you next time!

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