How to build a sales funnel for your small business

One of the main components of a marketing plan is a sales funnel. A sales funnel refers to the process a company leads its customers through to make purchases—from when customers discover your brand to when they click “buy.”

It’s called a funnel—and not a sales pyramid or circle—because the number of customers you reach gets progressively smaller with each step. There are four stages in the average sales funnel:

1. Awareness: When a potential customer hears about your business
2. Interest: When a potential customer wants to learn more about your products or services
3. Decision: When a potential customer is debating a purchase
4. Action: When a customer makes a purchase
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Learning how to build a sales funnel can make a major impact on your business’ success. According to HubSpot’s 2018 State of Inbound Marketing survey, 75% of companies said their top sales priority was closing more deals, while 48% said it was improving the efficiency of the sales funnel. The two goals are linked, however, since closing deals is more difficult without a good sales funnel.

The purpose of learning how to build a sales funnel is to give you more insight into your customer’s decision-making and buying processes. This, in turn, can help you figure out how to attract more customers, improve sales, and budget for marketing.

Here’s what you need to know about how to build a sales funnel for your small business:

Get into a customer mindset

Before you outline your sales process, it’s helpful to put yourself in the mind of a customer. Consider how someone might hear about your business, whether through word of mouth, an online ad, or a Google search. Once they’re aware of your business’ name, would they visit the website next, search your company on Instagram, or do something else?

Make a list of all the possible steps potential customers might take before making a purchase, then categorize each of these actions under awareness, interest, decision, or action. This information will serve as a guide for creating your funnel.

Step 1: Drive traffic to your site

The awareness stage is all about getting your message, brand, or product in front of a wide swath of potential customers.

To figure out where to start, identify your target demographic. Where do your potential customers live and work? How do they like to spend their time and money? Gathering information on their interests, problems, and habits is key to figuring out where to reach them and how to position your brand or product to appeal to them.

It’s a good idea to employ a few different inbound marketing methods to reach more people and drive traffic to your site. Depending on your industry, marketing budget, and customer demographics, you could use Google Adwords, paid social media posts, online ads, influencer campaigns, or promotional materials like flyers and signs. Tools like Google Analytics can help you track the traffic to your site and see which strategies are most effective.

Step 2: Pique interest

During the interest stage, potential customers are gathering information, conducting research, and comparison shopping. They may click on an ad or social media post that takes them to your company’s site, where you have a better opportunity to engage them.

Make an impression by revamping your landing page. A clean user interface, exciting visuals, attractive product photos, and compelling copy can help pique a customer’s interest.

Transparency goes a long way, too. Publishing your prices and customer reviews can encourage customers to continue browsing your products and web pages. In fact, according to a 2017 report from the Spiegel Research Center, displaying customer reviews on your site can increase conversion by a whopping 270%.

To see what customers respond to most, use a tool like Optimizely to A/B test your images, copy, and site layout.

Step 3: Engage customers

The decision stage is when people who’ve expressed interest in your business are mulling over their choice—sometimes over a few hours or a few weeks. It’s not always obvious why potential customers haven’t made a purchase, so building out this stage of the funnel may require more strategy and experimentation.

You can use Google Analytics or customer relationship management software like HubSpot or Salesforce to get reports on how long people stay on your site and which pages they visit most. Having a visual breakdown of visitors’ web behavior can help you understand what information customers might be missing to make their choice.

At this stage in the sales funnel, delivering content that educates and reassures potential customers should be your priority. In addition to writing detailed product descriptions, consider creating a FAQs page, posting product demos, or sharing fact sheets with statistics that demonstrate the success of your product or services.

Other effective content marketing tactics include email newsletters, infographics, blog posts, and videos. In a 2018 survey from Databox, marketing experts ranked blogging as the content marketing format that had the biggest impact on their business.

Video is gaining popularity, too. According to Wyzowl’s The State of Video Marketing 2019 report, 87% of consumers said they would like to see more video content from brands this year.

Step 4: Facilitate purchases

The fourth stage in the sales funnel is where customers make the choice to purchase. At this stage, they’re armed with information, but can still be swayed one way or another by logistical details. Customers might abandon their virtual cart after reading a strict return policy, for example, noticing a lack of payment options at checkout, or seeing the cost of shipping.

To increase the chance that customers move forward, experiment with different ways to streamline the checkout process. In addition to reducing the number of online forms customers have to fill out, consider letting them checkout without signing in or creating an account. It’s also smart to offer a variety of payment options—from PayPal and credit cards to ACH transfers and digital wallets like Apple Pay—so customers aren’t boxed in.

Keep testing and revising

Sales funnels aren’t set in stone. Continue testing and experimenting with different marketing and sales tactics to make sure your funnel remains effective. Get feedback from your customers by sending out surveys that ask questions about your website interface, checkout process, and products. You can also test marketing emails using services like MailChimp or Campaign Monitor, or use a tool like Hootsuite to track social media engagement.

Keep in mind that your sales funnel will change as your marketing budget evolves, so it’s important to continue monitoring your methods to see which strategies you can eliminate and which have the highest pay-off.