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What is a Sales Funnel? The Importance and Reasons You Need One
- March 31, 2021
- Posted by: Funmilola Sanya
- Category: Sales & Marketing

If you’ve been hearing sales and marketing experts mention sales funnels, click funnels, ad funnels, inbound marketing funnels, and so on, and you’re confused about what it means, don’t worry, you’re right on time for some in-depth explanation.
The marketplace is a competitive world. Daily you are faced with competitions from businesses selling the same product and service as you do. To succeed, you need to have a clearly defined process to increase your sales in your business, and to increase your sales, you need to build a sales funnel. That’s exactly how it works. Else, you would be stuck at ‘word of mouth’ and ‘referrals’ which aren’t enough.
In today’s article, we cover the definition of a sales funnel, the importance, and the reasons you need one. In the next article, we would give you a guide in creating a sales funnel for your business.
What a sales funnel is
A sales funnel is simply a process or journey through which potential customers become customers. The word funnel is used because the shape of the physical funnel is widest at the top, wider in the middle, and narrow at the bottom. When you add the word ‘sales’ to the funnel, it tells you the order by which a potential customer purchases your product or service, thereby becoming a customer.
The importance of a sales funnel
As long as you sell a product or service, you need a sales funnel. There’s no back and forth with that.
A sales funnel is the backbone of a successful business.
Understanding the concept of a sales funnel is crucial to scaling your business. With a sales funnel, you can be consistent with your marketing – as you do not know if you will make sales tomorrow or not. A sales funnel also shows you the places where your potential customers drop out – never becoming customers – and helps you measure your progress at each stage of the funnel.
The steps of a sales funnel
The funnel is each step your potential customer takes to become a customer. It typically illustrates the path your prospects take.
Awareness: Here the potential customer becomes aware of your business and what you offer. It might be through a tweet, a blog or Facebook post, or a Google search. Either way, it is the period where the potential customer is wooed.
Interest: Here potential customers start showing interest in your products and services, maybe through email subscription or sending a DM. When potential customers get to this stage, they are already researching and comparing your products and services with those of your competitors.
Evaluation: Now they evaluate their options and this is where your valuable content matters. It is what will help them make an informed decision.
Decision: This is where they decide to make a purchase based on evaluations. It is also where you make them your best offer through discounts, free shipping or whatever incentive will lead them to choose you over your competitors.
Purchase: Congratulations! Your potential customer has gotten to the bottom of the funnel and has become an actual customer.
Without these stages, there can be no customer and selling becomes a challenge.
Reasons you need a sales funnel
- For consistency in sales: Business can be unpredictable especially when it comes to generating revenue and that’s not a good thing. You shouldn’t make money only when you promote your goods and services. With a proper sales funnel strategy, your marketing will be on autopilot and will bring in new clients and customers without much effort from you.
- Purposeful content: When you have a sales funnel put in place, you’ll begin to create specific content targeted towards your customers and you’ll be strategic about it. Creating highly valuable content will help you gain the trust and credibility of your customers, and you’ll be providing relevant resourceful information about your products or services that’ll establish you as the expert and will make them always patronise you.
- It identifies problem areas and helps you improve on them: There is no perfect business without problems and success doesn’t happen overnight. A sales funnel can help you identify the exact areas where certain problems took place. You can trace where the customer left and identify the roadblocks responsible for their decisions. Understanding a sales funnel provides you with data from where you can draw valuable feedback and create better strategies to help you improve on your customer retention.
A sales funnel is a simple yet effective marketing tool for scaling your business successfully. With it, you can do so much more for your business and yourself too.
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Featured image: istockphoto