What is Sales Funnel – Examples and How to Create One

What is Sales Funnel – Examples and How to Create One

There are various stages of a sales funnel and each stage has an impact on consumer behavior about which one must know all. By knowing each step, you can use tactics to improve the number of people that go from one step to the next.

Defining and managing your sales funnel is one of the most powerful concepts in business.

Let’s dive in.

What is a Sales Funnel?

Let us understand the sales funnel meaning. The sales funnel is each step that someone has to take in order to become your customer.

So let us understand this in a better way with an example. 

Example – The people at the top of the sales funnel walk by your store. A certain percentage of them decide to walk in, that’s the next of the funnel. 

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A customer sees a rack of T-shirts on clearance. He or she thumbs through the rack, now they’re at the next step of the funnel. Then the customer selects four t-shirts and walks to the check-out. They’re at the last step. If all goes well, they finish the purchase and reach the bottom of the funnel.

The same process is valid for all businesses in some way or the other. Your sales funnel could exist as:

  • Retail Store
  • Sales Team
  • Website
  • Email
  • Personal Consultation

Any marketing channel can be part of your sales funnel. And your funnel might be spread across several channels.

Why is the Sales Funnel Important?

The sales funnel illustrates the path prospects you take.

Understanding your funnel helps find the holes in the funnel and the problem points — the places where prospects drop out and never convert.

Without understanding, you can’t optimize it. Understand that you can influence how visitors move through the funnel and whether they eventually convert.

The Sales Funnel Explained: How it Works

Let us look at the four most common terms to explain how each sale funnel stage works as a consumer goes from a visitor to a prospect to a lead to a buyer.

Example – A visitor lands on your website through a Google search or social link. They are now a prospect. The visitor might check out a few of your blog posts or browse your product listings. At some point, you offer them a chance to sign up for your email list.

If the visitor fills out your form, they become a lead. You can now market to the customer outside of your websites, such as via email, phone, or text — or all three.

Leads tend to come back to your website when you contact them with special offers, information about new blog posts, or offer a coupon code.

The sales funnel narrows as visitors move through it and this is somewhat because you’ll have more prospects at the top of the funnel than buyers at the bottom, but also because your messaging needs to become increasingly targeted.

Understand the 4 Sales Funnel Stages

Let’s look at each stage in the sales funnel in more detail.


This is the first stage of funnel sales and is the moment at which you first catch a consumer’s attention which might be with a tweet, a Facebook post, a Google search, or something else entirely.

And because of this, the prospect becomes aware of your business and your product.

Consumers sometimes buy immediately which can happen because of being in a right-place, right-time scenario. The consumer now knows what you offer which is in his price range and knows this because of the research he has done.  

The awareness stage is more of a courtship where you’re trying to woo the prospect into coming back to your site and engaging more with your business.


Once consumers reach the interest stage in the sales funnel, they’re researching, comparison shopping, and thinking about all the available options and it is exactly at this stage that you can swoop in with incredible content that helps them.

It’s best not to push your product from the beginning as you can turn off prospects and chase them away. You must try to establish your expertise and help the consumer make an informed decision.

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This is the stage when the customer is ready to buy. They might be considering two or three options and this is the right time for you to make the best offer.

You can give them free shipping, a discount code, or a bonus product. Make it so irresistible that your lead can’t wait to take advantage of it.


At the very bottom of the sales funnel, the customer acts. They purchase the product or service and become part of your business’s ecosystem.

But this doesn’t mean your work is done. You want to do your best to turn one purchase into 10, 10 into 100, and so on.

You must focus on customer retention. Express gratitude for the purchase, invite your customer to reach out with feedback, and make yourself available for tech support, if applicable.

How to Build a Sales Funnel Fast

Now let us talk about how to create a sales funnel.

Step 1: Analyze Your Audience’s Behavior

The first and foremost step is to know your audience better and understand their needs and demands. The more you know about your audience, the more effective your sales funnel becomes. Remember that you are not marketing to everybody but to people who are a good fit for what you sell.

Get user behavior reports that will help you monitor site activity and figure out how people engage with your site. Know everything like where they click? When do they scroll? How much time do they spend on a particular page? All of this will help you refine your buyer personas.

Step 2: Capture Your Audience’s Attention

A sales funnel works only if you can lure people into it and for that your content in front of your target audience.

Post tons of content across all of your platforms to grow organically and diversify with videos, infographics, and other types of content. Run a few ads depending on where your target audience is. 

Step 3: Build a Landing Page

You need to have a landing page where the ads can lead you. Let the ads direct them to a landing page with a can’t-miss offer.

Remember that these people are still low in the sales funnel so you have to focus on capturing leads instead of pushing the sale and a landing page would bring the visitor toward the next step.

Step 4: Create an Email Drip Campaign

Market your leads through email by providing amazing content regularly, but again, not too frequently. 

Build up to the sale by educating your market first. What do they want to learn? What obstacles and objections do you need to overcome to convince them to buy?

Another great way of reaching out to your audience is through a drip campaign with an incredible offer. 

Step 5: Keep in Touch

Continue reaching out to your existing customers and don’t forget about them. You can thank them for their purchases, offer additional coupon codes, and involve them in your social media sphere.


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How Can Lio Help

To make your dreams come true of having a business of your own and managing it nicely, Lio App can help you big time. The app lets you keep all sorts of data together in a more organized manner. You can keep records, and create tables and lists while working solo or with a team. 

The many features of Lio would help you with your retail business as you would be able to maintain all data on a track that you can use at any time. If you want to upload a document, then you can do that. Know the money transactions, cash inflow, profit and loss you are making, Udhaar, list of products, services, and even the teammates and clients that you have all in one place. 

Your retail business ideas will certainly become a successful business if you go on this journey of managing your business with Lio.

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Step 2: Create your account using your Phone Number or Email Id.

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Step 4: All Done? Share and Collaborate with your contacts.

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By now we have learned that creating and optimizing a sales funnel takes time but it’s the only way to survive in a competitive marketplace.

A detail as small as font choice or if you ask people to buy from you too quickly can impact conversions. 

Hence take time to build a sales funnel that is based on your want and what your audience wants. Work on it and adjust your approach to various sales funnel stages and learn about your approach.

Frequently Asked Questions (FAQs)

What are the 5 stages of sales funnels?

The five stages of a sales funnel include:
– Awareness
– Interest
– Desire
– Action
– Loyalty

What is a sales funnel system?

The sales funnel refers to the buying process that companies lead customers through when purchasing products.

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