What Is a Sales Funnel and How To Create One?

Mar 13, 2024 - Mike Hakob

What is a sales funnel? If you’re a marketing expert, you should know the answer to this question. However, if you own any type of business, you should also have a strong grasp of what a B2B sales funnel is and how to build it.

We’re going to walk you through the steps of how to create a sales funnel, sales funnel stages, sales funnel management, and examples of funnels that work well.

But first, let’s answer the main question of this article.

What is a Sales Funnel?

You know what a sale is and what a funnel is, and when you add them together, it means a customer’s journey from the moment that they became aware of your product or service to the time that they took a specific action, such as making a purchase.

Where does “funnel” come in?

You can think of the funnel as the entryway to your sales. The customer will work their way through multiple sales funnel stages, which we’ll discuss in greater detail below.
But in the meantime, let’s look at the three areas of the sales funnel that the stages fall within.

what is a sales funnel

Image source medium.com

Top Stage of the Sales Tunnel

Creating a sales funnel starts with the “top” of the funnel, which is what’s considered:

  • Awareness
  • Discovery

Your customer is in the very beginning stages of the sale process. They know they have a pain point and are searching for a solution. For example, a business may need to manage its accounting in-house and is searching for a platform to help them.

But as with most things, the person or business doesn’t know what the solution entails or what they truly need 100%.

During this stage, the lead is comparing different solutions and trying to find one that fits their needs best. They’re “browsing” for features and functions, but they’re not yet in the middle of the sales funnel where the research really begins.

Instead, they may be searching for things like “How does an SMB handle accounting?” or “How much does it cost to pay someone for accounting?”

Middle Stage of the Sales Funnel

The area of a B2B sales funnel that is considered the “middle” is when the potential lead begins filtering solutions to find the right one for them. Questions that may be asked are “how to manage accounting” or “how to choose accounting software.”

And during the middle of the sales funnel, they’ll begin to look for actual solutions.

For example, they may begin comparing potential solution types – not providers just yet. The person may be considering managing their accounting in-house, using SaaS, or hiring someone to handle their books for them.

You can think of the top and middle of the B2B sales funnel as a research stage because the lead doesn’t know what they need yet and is conducting their own research to find out how to solve their pain point.

Bottom Stage of the Sales Funnel

Creating a sales funnel all comes down to this point: purchase. The potential lead has done their due diligence. They’ve read reviews, researched their problem, started comparing potential options to solve their pain point, and now they feel educated enough.

At this point, they are at the bottom of the sales funnel and will:

  • Compare potential providers
  • Compare pricing
  • Analyze contract terms
  • Demo potential products
  • Hop on sales calls
  • Make a decision

And so this answers the question: what is a sales funnel? It’s how the customer gains awareness of their problem and moves through your sales funnel to make a purchase. Google found that a full funnel can increase return on investment (ROI) by 45%.

stages of sales funnel

Image source zapier.com

Why is the Sales Funnel Important for Your Business?

You should have the answer to this question once you know how to create a sales funnel. When created properly, a sales funnel can dictate how the customer learns about your product, what you have to offer, and whether to make a purchase. A funnel allows you to analyze what’s working and what’s not working.

For example, customers may enter at the top of the funnel and stop.


You may lack the right messaging, need to create new content assets or tweak what you’re doing to become a more attractive option for the prospect. Your sales funnel must nurture the lead and its interest and close the deal.

If you’re not generating sales, it could be an issue with the funnel that you’ve created.

But knowing how to create sales funnel goals and objectives goes beyond just sales. B2B companies benefit from a well-planned sales funnel and buyer journey in many ways, which we’ll explore in greater detail below.

Benefits of a Sales Funnel

    1. The right message at the precise time: Your sales funnel stages are about having a firm understanding of your ideal buyer. You need to understand the customer’s journey, know what questions they’ll ask, and rid them of any doubt that they may have along the way. Relevant, timely marketing messages are a benefit of your sales funnel. During its creation, you learn what your leads are thinking and how to respond to them with the right messaging. Analyze your customer experience across digital touchpoints to gain insights into user behavior and preferences. Such analysis ensures that your communications are not just timely, but also deeply resonant with the specific needs and moments of your audience. Relevant, timely marketing messages are a benefit of your sales funnel. During its creation, you learn what your leads are thinking and how to respond to them with the right messaging, enhancing the overall effectiveness of your sales approach through informed, customer-centric tactics.
    2. Alignment of your marketing and sales: Effective sales funnels capture sales that may have otherwise been lost because of a disconnect between your sales team and customers. For example, if a customer has a question your sales team cannot answer, a well-built funnel will answer them. You can provide robust information to customers to address their concerns early in the buying process.
    3. Weed out low-value leads: Your sales team spends a lot of time trying to convert leads who are low-value. What does this mean? Many of your leads are not 100% ready to buy, and in the end, they waste a lot of your internal resources. Your sales funnel can attract high-quality leads by filtering out the bad ones quickly. Businesses can then recapture their marketing budget and focus on leads with the best chance of converting to sales.
    4. Improved sales forecasting: Predicting revenue allows for better decision-making. It’s estimated that 29% is the average sales close rate. Utilizing the multiple sales funnel stages properly opens up accurate metrics, such as conversion rate, which your team can leverage during forecasts.


When people ask the question, “What is a sales funnel?” the answer is that it’s a way to get deeper into the minds of your ideal customers so that when you do reach them, you can convert them at a higher rate.

benefits of sales funnel

Image source fastercapital.com

How is a Sales Funnel Different from a Marketing Funnel?

Once you know how to build a sales funnel, you may wonder what the difference is between this and a marketing funnel. And while complex, the simple answer is that the goals are slightly different.

You can think of a marketing funnel as a way to attract as many potential leads as possible by creating awareness and interest, while the sales funnel is about converting those leads into paying customers.

Sales funnels take these leads, which are prospects, and work to turn them into sales. Both funnels are required for a business’s success and often guide a customer through their purchasing journey. Each type of funnel has its own journey and map that must be followed and is integral to the function of your business.

Both funnels work in unison through all of the sales funnel stages.

sales funnel vs marketing funnel

Image source magenest.com

What are the stages of a sales funnel?

What are the sales funnel stages that we keep discussing? In sales funnel management, there are four distinct stages that all businesses follow, but some do segment the stages into six to make them easier to manage.

Your leads will enter into one of these stages, and you need to meet their evolving needs at each of them.

Let’s explore each of the sales funnel stages in depth.

Stage 1: Awareness

Awareness is the entry point of the sales funnel. It’s when the buyer realizes they have a pain point and begins to notice your business as a potential solution. During this stage, you’ll use multiple channels to try and generate leads:

  • Blogs
  • Email
  • Social media
  • Web

During the awareness stage, the lead is looking for potential solutions to their pain points, but they may not know what that entails. Your service and product pages will be browsed, opening the prospect’s mind to the idea that there is a solution.

Stage 2: Interest

Every buyer persona will have their own level of awareness and interest that you should cater to throughout the sales funnel. While they’re not yet in the decision phase, the lead is looking into unique ways and solutions that will solve their pain points.

Prospecting tools will be used, and lead scoring will begin.

Your prospect is not yet considering a potential product or service from a specific company. Instead, they’ll consume a lot of information, conduct research, and then move on to the decision phase.

Stage 3: Decision

Sales funnel management leads to an ultimate decision. Your lead is ready to make a purchase, and while they haven’t made a final choice yet, they are close to buying. You’ll need to differentiate your brand from the competitors with offers such as:

  • Discounts
  • Free shipping
  • Upsells
  • Lower prices
  • Better USP

You need to sell your product or service at this stage. You must have messaging that showcases your unique selling point and benefits.

Ultimately, you need to push the lead to take action – the action you want taken.

Stage 4: Action

Everything in your sales funnel stage has led to this point: taking action. You can expect the lead to make a commitment. Sales teams must be ready to answer any last-minute questions, and you want to make one final push to secure the sale.

You’ll use:

  • Calls to action
  • Sales teams
  • Closers

Creating a sales funnel always leads to the final goal of a sale. You may incorporate cross-selling and up-selling into this final stage of the sales funnel, too.

how to create a sales funnel

Image source fitsmallbusiness.com

How to create a sales funnel for your business

To build an effective sales funnel, you first need prospects or potential customers to move through it. Once you have a steady stream of prospects, you can start analyzing their behavior to understand where they are in the funnel.

There are several best practices you should follow when creating your funnel. These include:

Analyze audience behavior data

The more you know about your audience and their behavior, the more effective your sales funnel will become.

Start with your website metrics to understand user engagement more deeply. How are prospects using your site? Where are they spending most of their time and how does this interaction translate into engagement metrics such as page views, session duration, and repeat visits? What is your bounce rate for each page? Pages with high bounce rates may not be engaging or valuable to your audience.

Track your audience’s interactions with your online and offline presence to learn more about their wants and needs.

Website analytics is one way to get to know your customers, but you can also communicate with them directly to learn more about their pain points and goals. Website analytics tools provide valuable insights into how users interact with your site, but they’re not the only means of understanding your customers. For a more detailed analysis of the forms on your landing pages, form analytics can offer valuable data. It goes deeper into user behavior, especially regarding how they engage with forms on your site. This analysis can include tracking which fields are filled out, where users abandon the form, and how long they take to complete it.

Understanding your audience’s behavior, wants and needs can help ensure you’re sending out the right message at the right time and to the right prospects.

Build a landing page

Now that you have a better understanding of your audience, you can start building a landing page.

Your landing page is where prospects land when they:

  • Click on an ad or link
  • Download an eBook
  • Sign up for a webinar

Your ads and content need to send prospects somewhere, and that somewhere is your landing page.

It’s important to remember that your landing page is likely going to be the first time potential customers are learning about your brand. Optimizing your landing page is essential for a good first impression and  smooth user journey towards taking action. Landing page should communicate who you are as a brand, your unique selling point, benefits, and other relevant information.

The goal of your landing page is to capture leads, so don’t focus too much on trying to make a sale.

Make sure that your page has:

  • An email capture form, so you can continue communicating with prospects and moving them along your funnel.
  • A bold call-to-action (CTA) that tells prospects exactly what to do next (download your eBook, read a blog post, etc.).

You only have one opportunity to make a good first impression with your landing page, so make it count.

Define the problem you want to solve for your customers

If you want to build an effective sales funnel, you need to define the problem that you want to solve for customers.

What’s the biggest challenge your customers are facing that only you can solve?

Look to your customer data to determine which pain point you can solve for your customers. Focusing on a single problem will allow you to take a more targeted approach to your landing page and sales funnel creation. Your messaging can then focus on positioning your business as the solution they need for their problem.

Define your goals

Once you understand the problem you want to solve for your customers, the next step is to learn how to create sales funnel goals. What do you want to achieve in each stage of your sales funnel?

Goals can include product demos, more leads, newsletter sign-ups, and more sales.

It’s important not to skip this important step because, without clear objectives, you cannot measure your progress or determine what’s working and not working.

Create a preliminary offer to generate interest and leads

When you hear the question “What is a sales funnel”, what is the first thing that comes to mind? An offer, right? After all, you cannot convert prospects without offering something to get their attention. But equally important is the presentation and user experience of where you’re making this offer, namely your landing page. Make sure that once prospects click through to see your offer, they are met with a clear, user-friendly, and persuasive page that encourages them to take action.

Consider what kind of offer would be appealing and valuable to your audience, such as a free trial or demo, eBook, webinar, and templates. As you think about this offer, also plan for a landing page that concisely highlights its benefits, uses engaging visuals, and includes a straightforward call to action (CTA).

Don’t forget about online forms, as having them on your landing page is a direct method for lead generation. You might miss the opportunities by just not tracking your form submissions, resulting in lost leads and potential clients.  Make sure you track and monitor every submission ensuring that no data is missed.  Form tracking tools like FormStory can significantly improve the monitoring process. Its form tracking system analyzes leads’ journeys through the entire form. Analyzing how prospects interact with your forms, you gain deeper insights, that will allow you to optimize your sales funnel and follow-up strategies more precisely to meet each lead’s interests and behaviors. Form issues and errors are another point that can lead your clients to blackhole, with FormStory you can capture partial form submissions despite any errors after submission. FormStory also sends alerts in case of any errors.

FormStory’s features include:

  • Capturing Partial Form Submissions
  • Real-time form monitoring
  • Broken Form Alerts
  • Analytics and Insights

The landing page should also be optimized based on user insights and mobile responsiveness and should clearly communicate the value proposition of your offer. When you create an offer, remember to develop a strategy for A/B testing different elements of your landing page. This could include testing variations in headlines, CTA buttons, images, or the overall layout to see which version achieves higher conversion rates. The goal of landing page testing is to identify what combination of elements works best at compelling your audience to take the next step in your sales funnel.

If you want to send prospects further down your sales funnel stages, you must make it worth their while. Create an offer that helps them understand how you can solve their problem and entices them to continue engaging with your brand.

Qualify leads to ensure they’re a good fit

Your preliminary offer can convert prospects to leads, but not all leads are created equal. Some won’t be a good fit for your brand and vice versa.

To ensure you focus your time and effort on the right people, take the time to determine what a qualified lead looks like.

To qualify leads:

  • Create or review your ideal customer profile
  • Define your scoring criteria, such as budget, social media engagement, demo requests, etc.
  • Ask the right questions to ensure the lead is a good fit

Once leads have been qualified, you can take the next step of following up and starting to nurture them.

Nurture qualified leads

A qualified lead is someone who’s interested in your products or services and is a good fit for your company. But just because a lead is qualified doesn’t mean that they will automatically take the dive and make a purchase.

Leads that go silent will need some nurturing.

Nurturing is all about building relationships with leads to gain their trust and earn their business when they’re ready to make a purchase.

How do you nurture leads? Creating an email drip campaign is a great option and one of the most effective strategies. Write personalized content into these emails, and get lead’s engagement on your website, which can make the communication even more impactful. One subtle yet powerful way to do this is website personalization based on the visitor’s past interactions, interests, or demographics. You can show them content, offers, and products that are most relevant to them, significantly enhancing the nurturing process.

But you can also nurture leads through paid retargeting and social media.

Now is the time to create another offer that will nudge your leads in the right direction toward making a decision, such as an exclusive discount or an extended trial. The goal is to remove as much friction as possible to continue sending your leads down the sales funnel.

Keep the line of communication open

At this stage of the sales funnel, leads will decide whether or not to make a purchase. Regardless of which path they take, it’s essential to keep the lines of communication open.

  • For those who become customers, focus on retention and building loyalty.
  • For those who did not convert, continue nurturing and stay in touch every few months.

By keeping the lines of communication open, you help build strong relationships with customers and qualified leads who aren’t ready to buy. In the future, those leads who haven’t become customers may change their minds and give you their business.

Monitor the results, analyze sales data, and make changes as needed

Your sales funnel is almost complete. The final and arguably one of the most important steps is to implement a sales funnel management framework to analyze data and make changes as needed.

No sales funnel is perfect, and even the most qualified leads can slip through the cracks. For this reason, it’s important to analyze your audience regularly and make changes as needed to improve your funnel’s performance.

Look for missed opportunities, bottlenecks, and areas of improvement. Make it a priority to continually optimize and improve your funnel.

Sales Funnel Examples

At this point, you have a better understanding of what is a sales funnel and how to create one. But what does a sales funnel look like in the real world? Here are some examples.


Tricentis is a software testing tool that has a suite of products focused on optimization, automation, and integration.

Top of the Sales Funnel

Tricentis builds awareness primarily through SEO. The company ranks highly for its targeted keywords. When prospects land on their site, they can connect and engage by requesting a demo or free trial. They can also contact Tricentis directly through their contact form.

Middle of the Sales Funnel

At this point, sales reps have detailed information about leads, including the company name and the lead’s job title. Having this information is a great start for qualifying leads.

Because Tricentis has a massive resource library, they are well positioned to nurture leads through highly specific and relevant content that solves their problems, such as video demos or detailed guides.

Bottom of the Sales Funnel

When leads are at the decision-making stage, Tricentis offers valuable resources that can help them make their decision with confidence, such as the company’s:

  • ROI calculator
  • Perks, like their community
  • Customer success stories

Tricentis excels at providing consistent support throughout every stage of its sales funnel and meeting its prospects’ needs. As a result, they can win over highly qualified prospects.


Twilio is a service provider that offers an easy means to integrate text messages and video calling into software using API calls. As a leader in the industry, the platform uses a refined sales funnel to push prospects through the four sales funnel stages faster.

The company’s funnel begins with:

Top of Sales Funnel

Twilio focuses heavily at the top of the funnel, where they use extensive SEO to rank for communication-related keywords, such as:

  • Communication API
  • Communication solutions

Blogs, social media, and more are used to provide informative content to leads and showcase Twillo as the solution to their problems. Guides and free accounts push prospects into the middle of the sales funnel.

A sales rep will personalize the experience extensively in this part of the funnel to answer specific questions on how the API can be used with a multitude of technologies.

Middle of Sales Funnel

Twilio’s middle of the funnel is where the sales rep begins using the information that they collected from the lead to create meaningful conversations.

Bottom of Sales Funnel

At the decision-making stage, leads may have questions about pricing, ROI, and implementation. Twillo eases concerns and eliminates friction through its hyper-specific pages, such as detailed documentation, customer stories and use cases.

Sales reps are well-equipped to answer questions and find suitable solutions for leads, which makes it highly likely they will convert into customers.


What is a sales funnel? It’s how you can transition a prospect into a sale. Your buyer will go through a journey before they click “buy” or hand over their payment information. If you believe that you’re done the moment that you create a sales funnel, you would be wrong.

You need to continue monitoring your funnel and making strategic adjustments to optimize your sales funnel stages better.

Consumer buying habits will change, and you must evolve with them to remain competitive in your niche.

Mike Hakob

Mike Hakob is a seasoned digital marketing maven with over 15 years of mastery, and the visionary Co-Founder of FormStory. As the driving force behind Andava Digital, he has dedicated his expertise to empowering small to medium-sized businesses, crafting tailor-made websites and pioneering innovative marketing strategies. With a graduate degree in Management of Information Systems, Mike seamlessly blends the realms of technology and marketing, consistently setting new industry benchmarks and championing transformative digital narratives.