The Complete Beginner’s Guide To Building Sales Funnels
You’ve heard the term “sales funnel,” but maybe you’re not sure exactly what the term really means.
Fear not. It’s not nearly as complicated as you think.
Many new marketers jump directly to the tactics of a sales funnel—before understanding what makes a good funnel work in the first place.
This is a mistake—one that can cost you hundreds of hours and thousands of dollars in lost effort and advertising fees.
By the end of this article, you’ll know a lot more about what sales funnels really are, how they work, and (most importantly) how they make you money.
Sales Funnel: A Simple Definition
At its core, a sales funnel is nothing more than this:
- A series of steps you create to guide potential customers as they become familiar with your product or service, then decide whether or not to buy from you.
Think of it like stepping stones.
Your potential customers don’t know anything about you right now.
Your job as a marketer is to catch their attention, gain their interest, build desire, then invite them to take action.
Get this wrong and you’ll waste piles of time and money trying to promote your product or service—with little results.
But get it right and you’ll see significant growth, revenue, and profit for you, your family, and your business.
The AIDA Sales Funnel
The sales funnel has been around for way longer than you might think.
American advertising executive E. St. Elmo Lewis was the first to lay it out in detail—way back in 1898.
Lewis based his funnel on data he gathered from the life insurance industry after looking for trends in the way agents sold policies.
He concluded that there were four “stages” to every sales process:
Thus the AIDA funnel was born.
Modern Sales Funnels
Today, over a century after Lewis and his AIDA funnel, we still use AIDA as the foundation of our modern sales funnels.
Unlike Lewis, however, we use three tiers in our funnels, instead of four. Creatively, we call them:
- Top of the funnel (TOTF)
- Middle of the funnel (MOTF)
- Bottom of the funnel (BOTF)
Don’t be fooled. Despite the 21st century terminology, our modern three-tier sales funnels are just updated versions of Lewis’ AIDA funnel.
You can take any modern funnel and lay it directly over Lewis’ AIDA funnel, like so:
The Sales Funnel, One Section at a Time
What I love most about funnels is that they work a bit like Legos.
You build them in pieces, almost independently. Then put them together to make a complete item.
Let’s take a moment to look closely at each section:
The Top of the Funnel
Since you’re reading this, I’m assuming you have something awesome you sell to the world (or that you’d like to sell the world, if only you could find customers).
If so, I have good news.
If you sell something great, there are thousands (maybe millions?) of people who would love to spend their money with you.
But here’s the problem:
That audience of potential customers doesn’t know you—or your product or service.
And the vast majority aren’t actively looking to spend money on a product or service like the one you sell. At least not right now.
This is the purpose of a sales funnel. To guide people from complete unawareness all the way to the moment they make a purchase with you.
The first step in the journey—the top of the funnel—is to attract the attention of these thousands or millions of people who’ve never heard of you.
That’s the job at the top of the funnel—not to make a sale—but just to catch people’s attention.
The Middle of the Funnel
Congrats! Your TOTF work is paying off.
You (or your product or service) is turning heads. People are asking questions. They’re paying attention.
Now you have a new problem.
How do you take that attention and get people interested in buying something from you?
This is the middle of the funnel—where your job is to generate interest and desire in the minds and hearts of your potential customers.
We’ll talk about how marketers generate interest and desire in a moment.
For now, notice that only some of the people you attract with your TOTF efforts will make it to the interest and desire step in your sales funnel.
To put it another way, not everyone converts from the TOTF to the MOTF.
Some people will drop out, and that’s totally normal.
This is why we call it a funnel—because the audience in each section gets smaller as you get further into the funnel.
The Bottom of the Funnel
Your MOTF efforts are starting to work.
You’re getting buying signals from your audience now.
People are asking about your prices, your terms and conditions, or whether or not you have availability to work with them.
This is the bottom of the funnel.
It’s time to ask prospects for the sale.
Again, we’ll look at how that’s done in a moment.
But here again, notice that not everyone in the MOTF converts to the BOTF, and not everyone who makes it to the BOTF sales will convert into a paying customer.
Tools of the Trade: What Marketers Use in Each Step of the Funnel
Now that you know the stages of a modern sales funnel, let’s look at the tools we use in the different stages.
Some of these you’ve probably already guessed.
But I bet there are also some here you haven’t thought of as part of a “sales funnel.”
Top of the Funnel Marketing Tools
Top of the funnel tools are designed to catch the attention of people who are completely unaware of you and your product or service.
TOTF tools can be “interruptive,” such as advertisements—they “interrupt” something else you were doing (e.g. watching a TV show or browsing Facebook).
Or they can be “native” such as guest blog posts—designed to be informative, helpful, or interesting—but really built to introduce you to a person, product, or service for the first time.
Examples of TOTF marketing tools include:
- Ads of all kinds (TV commercials, Facebook ads, Google search ads)
- Twitter hashtags
- Press releases
- Cold calls
- Door-to-door sales
- Guest posts
- Publicity stunts
I could go on, but you get the idea.
Notice that many of these can be done without massive financial investment. Some are even free, as long as you don’t mind putting in the hours and effort required to make them work.
Anything you do to reach people who’ve never heard of you before: that’s a TOTF tool.
Middle of the Funnel Marketing Tools
I spend my days writing marketing content, which means I spend most of my time in the middle of the funnel.
The job of the MOTF is to take the attention from the TOTF and convert it to interest and desire within the hearts and minds of prospects.
Sometimes this can be done quickly. Other times it takes many interactions before an audience begins to become interested in a product you have for sale.
For most companies, the website is the biggest, most important MOTF tool. It’s the place people go when they want to learn more about a person, product or service.
But websites are not the only tool at your disposal in the MOTF.
Just like the TOTF, you can create and use a huge variety of tools:
- Product pages
- Email sequences
- White papers
- Physical books (like the ones sold on Amazon)
- Follow-up phone calls
- Product demo videos
- YouTube “how-to” videos
Bottom of the Funnel Marketing Tools
The bottom of the funnel is where you make your money.
These are the sales pages, video sales letters, and direct response mailers of the marketing world.
In a few specific industries, you can sometimes get away with creating one amazingly good sales letter—and still make money.
But I need to warn you: this is exceptionally rare.
The very best sales letters in the world convert at about 2% to “cold” traffic.
But to an audience that’s been “warmed up” with TOTF and MOTF content, a BOTF sales tool will often convert far better than 2%.
Tools we use in the BOTF include:
- Sales page
- Video sales letters
- Direct response mailers
- In-person sales visits
- Consult calls with a “close” at the end
Whatever tool you use, the goal here is to create action.
Here is an example of the founder of Performance Marketer talking about bottom of the funnel techniques.
Measuring the Effectiveness of Your Funnel
As you’ve seen by now, sales funnels are modular.
You use one tool at the top of the funnel, a second tool at the middle of the funnel, and a third tool at the bottom of the funnel.
You might even use multiple tools in each section—testing to see which ones work better.
By trying a few different tools, you can use the data you gather to improve the performance of each step.
You will almost always find that one part of your funnel is performing well, but another part is lagging behind.
To improve the effectiveness of your funnel, don’t throw the whole thing out and start over.
Just find the part that’s not performing well, then improve just that part.
This is how small changes can lead to significant improvements in the overall revenue generated by your sales funnel.
AIDAP: Adding the Final Step
To wrap things up, let’s return for a moment to E. St. Elmo Lewis and his AIDA funnel.
In 1911, Lewis added a fifth step to his funnel, adding “permanent satisfaction” to AIDA, making it AIDAP.
Lewis did this to emphasize the importance of customer satisfaction on repeat purchases.
This is a critical point.
Selling to current or previous customers is almost always cheaper and easier than selling to brand new customers.
But to do that, you have to deliver an amazing product and an amazing experience to your customers after they make a purchase from you.
No sales funnel—no matter how effective—can create repeat sales from lousy products or a poor customer experience.
“Permanent satisfaction” means you must make customers happy at all points in the purchase process, especially after a purchase has been made.
The payoff for getting this right is huge, because the AIDAP funnel has the potential to be far more profitable than the AIDA funnel.
The AIDA funnel is about making the first sale.
The AIDAP funnel is about making the second, third, fourth, fifth, and 50th sales.
I hope I’ve inspired you to learn more about this fundamental tool we call “the sales funnel.”
I’ve found when you understand the mechanics of funnels work, it’s much easier to set up, execute, and improve a sales funnel as you go.
Let me leave you with a parting thought:
You had a sales funnel long before you read this article.
But I’m guessing many of you have never stopped to lay out your funnel step-by-step.
Today, take a few minutes to fix that.
Lay out the steps you’re currently using to move people through the purchase process. Write them down on cards. Then lay them out on a table in front of you.
These steps are the lifeblood of your business. Improve any one of them, and you will improve the effectiveness of your funnel, and your sales numbers too.
And isn’t that the point?
15 Sales Funnel Blunders to Avoid at All Cost
Here’s why a sales funnel is important:
That means if your sales funnel isn’t working, as many as 97% of your potential customers will never buy from you.
15 Sales Funnel Mistakes to Avoid at All Costs
These are problems you might not even know you have, but that could be costing you many thousands of dollars in profit over time.
In this article, we’ll focus on top-of-the-funnel mistakes.
Mistakes at the Top of the Funnel
As we covered above, grabbing attention is the only goal at the top of the sales funnel.
You’re not trying to make a sale. You’re just trying to catch the attention of potential customers who are currently unaware of you or your product or service.
5 Blunders that Torpedo Results at the Top of the Funnel
Here are some of the most common mistakes we see in the top of the funnel:
Blunder #1: No Target Audience
A few years ago I asked a business owner whom he wanted to reach with his marketing strategy.
“Well you know… anyone I guess,” he told me. “Whoever will buy it.”
I often hear some version of this answer when working with new clients. It’s one of the biggest errors I see.
If you don’t know this already, when you target “everyone” with your marketing, you’re targeting no one.
If you don’t have a target audience, it’s time to get one.
It’s easier than it sounds. Just answer this question:
What group of people would love your product (if they knew it existed) and also have the money to pay for it?
Blunder #2: Going Straight for the Sale
To quote Robert Collier:
“Always enter the conversation already taking place in the customer’s mind.”
It would be strange to approach a stranger on the street and immediately say, “Do you want to buy my 2-hour training course on how to be a highly-paid consultant?”
You’d get some strange looks. And I doubt if you’d make any sales.
Every day, I see ads from marketers that basically just a list of features for their product or service.
Remember that 97% of your audience is not actively thinking about you or your product. Your job is to meet them where they’re at.
If you hit them with a list of features, they’ll just ignore you.
Blunder #3: Bland Content
In 2004, publishing content—by itself—was a way to position yourself as a thought leader in your space.
Today marketers are publishing over 2 million blog posts every day. Just publishing content is not enough any more. You need to publish content that stands out.
That means having a clear understanding of who you’re talking to, what they struggle with, and how you can solve some of their problems.
Blunder #4: No Call to Action
What should people do after reading your ad or your blog post?
This is the critical moment where people either fall out of your funnel or take the next step.
Too many marketers don’t have a call to action at the end of their content.
If you want people to subscribe to a newsletter, tell them to subscribe to your newsletter. Or download your guide. Or follow you on Facebook or wherever you’re building your audience.
Blunder #5: An Overwhelming Form or Confusing “Next Step”
Here’s the rule of thumb: the more fields you have on a form, the less likely people will complete and submit the form.
Don’t be that marketer who tries to extract 37 pieces of data from a prospect.
At this point, you don’t need anything more than the name and email of your new sales prospect.
You can always gather more data as people move deeper into your funnel.
Finally, remember that sales funnels are not brand marketing campaigns.
They’re about driving customers to take actions.
If you don’t see the results you want, don’t keep throwing time and money at the same old strategies.
Change it up and see what happens. Our archive is a great place to start if you need some fresh ideas.
Marketers tend to focus on the top and bottom of the funnel.
We closely monitor advertising response rates. And we’re constantly tweaking our sales pages and closing scripts—trying to increase conversions.
Those efforts are important, but a strong middle of the funnel can also do wonders to improve the overall profitability of your sales funnel.
Cultivation: The Goal of the Middle of the Funnel
The goal in the middle of the funnel is to cultivate prospects who are aware of you and your product or service, but who aren’t quite ready to make a purchase with you.
Normally the tools we use in the middle of the funnel are some form of “content marketing.”
Blog posts, social media channels, webinars—these are all regular tools used by marketers in the middle of the funnel.
Each is designed to increase your audience’s trust in your ability to help them solve their problems.
5 Blunders in the Middle of the Funnel
Here are five of the most common problems that lead to poor performance in this stage of the sales funnel:
Blunder #1: Not Enough “Touches”
The middle of the funnel is where people are deciding whether you are someone they should trust and listen to.
Brian Carroll, author of Lead Generation for the Complex Sale, claims that nurturing programs don’t impact sales conversion rates until a minimum of five touches.
A “touch” does not have to be a one-on-one interaction. A 5-email autoresponder can have the same effect.
But many marketers don’t create enough touch points to build the trust needed to help prospects feel comfortable enough to make a purchase.
If you’re aggressively building an email list, but you don’t have an autoresponder or a regular publishing schedule in place, you’re letting prospects fall out of your funnel.
Blunder #2: Letting People Forget Who You Are
Have you ever received an email from a marketer and you have no idea who this person is?
Sometimes it’s spam. But just as often, it’s a marketer who let his or her list go dormant.
You probably signed up for the list months ago, there was no autoresponder in place, and the marketer hasn’t sent anything to subscribers since you signed up.
To stay top-of-mind with your audience, try to send or post something at least every week or so.
If you go too long, they’ll forget who you are and why they signed up in the first place.
Blunder #3: Focusing on Yourself Instead of Focusing on the Audience
Here’s a perfect example of what not to do in the middle of the funnel:
This email doesn’t contain a single piece value for me.
I don’t care that they have a new website. I care about my life and my problems.
Instead of doing this, focus on helping people solve problems. If you can help people solve problems with your free content, they’ll be much more likely to purchase products and services from you when they have bigger problems they need to solve.
Blunder #4: No “Next Step”
People move through the middle of your sales funnel at their own pace.
You never know what piece of content will convince people to move into the “actively considering a purchase” stage.
But this I do know: too many marketers forget to include a call to action in their content.
You don’t have to be pushy. At the end of your cultivation materials, just include an invitation to take the next step.”
You could say: “If you’d like to learn more, we should talk. Here’s how to get in touch.”
Blunder #5: Not Testing Results
It’s easy to set up an autoresponder or a content plan, then just put your head down and execute.
Whatever you’re doing to cultivate prospects in the middle of the funnel, don’t forget to test different variations over time.
The math of sales funnels means a small improvement in one area can have a large impact on the overall results of your efforts.
Remember that people in the middle of the funnel are interested, but not quite sure about you yet.
If your middle-of-the-funnel efforts aren’t working well, people might hang out in this area of indecision for months—or even years.
Your job is to get them to move forward. Stay focused on that and you’ll do just fine.
Bottom Of The Sales Funnel Blunder
The prospect is interested. It’s time to close the deal.
This is the bottom-of-the-funnel, the place where you finally get paid.
It’s also the most costly place to make a mistake, since you’ve already invested so much effort in the top and middle parts of your funnel.
If your conversion numbers aren’t where you’d like them to be, here are a few blunders that might be causing your problems:
Blunder #1: A Super-Weak Headline
As David Ogilvy put it: “On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.”
The headline is the single most important element of any sales message.
Whether you’re closing a deal in person or writing a sales page, the first words should hook audience, compelling them to pay close attention to the message.
When in doubt, keep your headlines clearly focused on the promise delivered by your product or service.
And if you do nothing else, you should always split test headlines to see what performs best with your audience.
Blunder #2: Selling the Drill Instead of the Hole
I had a business professor who loved to say, “People don’t buy drills. They buy the ability to put a hole in their wall.”
It’s the difference between the item or service you sell and the real, tangible value people receive when they become your customer.
Marketers are prone to “feature-preaching” at every stage of the sales funnel.
But it’s especially damaging in the bottom of the funnel.
Your sales materials should clearly describe your product or service. But you should describe features in the context of the benefit they’ll provide to a customer.
If you struggle with this, use the “so that” trick.
List a feature of your product, then say, “so that” and add the benefit.
It will look something like something like this
- Video two describes how to identify quality partners so that you won’t get stuck working side-by-side with someone you hate.
Blunder #3: No Urgency or Scarcity
As the person writing the sales materials, it’s your job to tell your audience why they’ll benefit most if they buy today—instead of putting it off until tomorrow.
If people consistently tell you, “I’ll think about it,” your sales message probably didn’t do a good job with urgency.
Scarcity is similar. It’s the actual limitation on how many items or spots there are before you’re sold out.
Scarcity does not apply to every sales message. But if you have a natural limit to the number of people that can buy your product, you should absolutely use it in your sales messaging.
Blunder #4: No Risk Reversal
“What if I spend money on this and it turns out to be junk?”
It’s a question every customer asks.
It’s the marketer’s job to “reverse” this risk by offering a money-back guarantee (usually within 30 or 60 days).
If you don’t have a guarantee, people might be ready to buy, but they’re hesitant. They don’t want to make a mistake and waste their money.
A guarantee takes away that excuse.
Blunder #5: A Single Call to Action
A lot of marketers put one big call to action at the bottom 0f their sales page or at the end of their sales message.
This is a mistake.
When prospects land on a sales page—for example—some are ready to buy NOW.
Don’t make them scroll. Let them purchase immediately by adding a call to action toward the beginning of your sales message
Adding another call to action in the middle of your sales message to convert more prospects.
And of course, you should always end with a strong call to action at the end as well.
There’s one other benefit to having multiple calls to action: you can phrase the CTA differently each time. Try mixing “rational” CTAs with more emotional CTAs. For example:
- Makes sense to me. Sign me up!
- Get in Now Before Time Runs Out!
Mastering Sales Funnels for All Time
I hope this series helped you find and correct some of the most common problems in the top, middle, and bottom of your sales funnel.
Building a great sales funnel isn’t easy. It takes time, energy, and a lot of patience.
It is work that pays rich dividends—however—which is why we spend so much time studying it.
What about you? What other mistakes have you seen in your sales funnels? Let us know in the comments!