What is a Sales Funnel? How to Build One, Stages & Template

What is a Sales Funnel? How to Build One, Stages & Template

Selling is not a race. It’s a journey. Today’s customers make well-informed buying decisions, so the only way to convert more leads is to engage them at every step of the sales funnel.

But the question is: how do you build a sales funnel that converts? While setup requires planning for different stages and touch points, it’s essential for businesses that want to boost growth and future-proof their business.

The good news is that building a sales funnel doesn’t have to be overwhelming. This guide will help you understand what a sales funnel is, why it’s important, and how to build one. We will also share three templates and examples to help you convert more buyers.

What is a Sales Funnel?

A sales funnel is a customer-centric marketing model that represents the journey customers take from the moment they become aware of the need to the moment of making a purchase decision. The different steps as leads progress from prospects to customers depict the sales process from awareness to action.

Psst! Want to skyrocket your B2B conversion rates? Our article on the B2B Sales Funnel has the answers.

Why is the Sales Funnel Important?

If you’re having a hard time with your sales process and converting prospects to customers seems like a Sisyphean task, that is the first red flag that something is wrong with your sales funnel.

But here’s the thing: without putting yourself in your customer’s shoes and understanding the buying journey from start to finish, you can't optimize your selling process. To overcome this roadblock, you need a sales funnel.

Creating a well-oiled sales machine requires a careful approach with engaging experiences at every stage of your sales funnel. This way, you’ll be able to:

  • Understand your customers’ buying journey - Where do customers discover you? Is it through social media, Google search, webinars, in-person events, referrals, outbound sales, or some other touchpoint? How many of them move to the next stage of the funnel? Using the right type of content at the right time and through the right channels will help you improve conversions.
  • Create a personalized experience at every stage - The modern sales process can’t rely on a “one size fits all” approach. Buyers nowadays expect a personalized experience, and the only way to create one is to map out the buyer journey and build trust and strong relationships with your potential customers.
  • Focus on the right new leads - Your product is not for everyone—and that’s fine. That’s why you should have a sales funnel to focus your sales efforts on the right prospects. Lead generation lets you reach prospective customers early in their buyer’s journey, build a relationship, and be top of mind when they decide to make a purchase. Companies should constantly test different lead generation ideas and see what works best for their business. From blog content, educational videos, and podcasts to ebooks, guides, and webinars, businesses have different tools to attract the ideal customers and move them throughout the sales funnel until they are ready to buy.
  • Overcome sales objections - The sales process is not always sailing on smooth waters. Quite the opposite: you’ll face objections more often than not. But instead of looking at objections as obstacles, you should use them as an opportunity to learn more about your prospect’s needs and optimize your sales funnel based on the knowledge you collect when interacting with potential customers. Your sales funnel should answer different questions at different stages of the sales funnel and help you overcome sales objections.
  • Create alignment between marketing and sales - One of the biggest pain points for businesses is the alignment between marketing and sales departments. With a sales funnel, you can map the whole journey and build a healthy sales pipeline that will help you convert more customers.

Build and optimize your sales funnel the right way with Close. Sign up for a free 14 day trial today.


What Are the Stages of a Sales Funnel?

Different businesses use different terms to describe touchpoints throughout the buyer's journey, but the basic sales funnel is divided into three stages: top, middle, and bottom of the funnel.

  • Top of the funnel (TOFU) - the first stage of the funnel covers the beginning of the customer journey when customers become aware of the need and discover your business while looking for answers.
  • Middle of the funnel (MOFU) - during this stage, prospects are well-aware of their need, and they are researching different solutions.
  • Bottom of the funnel (BOFU) - at the end of the sales funnel, customers are equipped with all the information they need to make an educated decision and choose the right solution for their needs.

The AIDA Model

One of the most popular frameworks describing the steps of the customer journey is known as the AIDA model, divided into four sales funnel stages: attention, interest, desire, and action. The AIDA model traces the stages that an individual goes through during the purchasing process.

AIDA is a hierarchy of effects model, meaning consumers must move through each model stage to complete the purchase. Since each stage has fewer prospects than the previous one, the AIDA model resembles a funnel.

The 6 Stages of the Sales Funnel

The sales process has evolved significantly over the years. Today, customer-centricity is the backbone of successful businesses. Companies have realized that customers should be at the heart of everything they do. As a result, they have expanded the standard AIDA model to focus on customer retention.

Looking at the modern sales funnel, we can identify six stages: awareness, interest, consideration, intent, purchase, and retention.

Sales Funnel Stages

The first five stages of the sales funnel mark the path a lead goes through before buying a product or a service. The last stage revolves around the importance of customer retention as an inseparable part of the whole sales funnel. Let’s look at each stage in the sales funnel in more detail.

Stage 1: Awareness

The buyer journey begins when a potential customer becomes aware of the need for a certain product or service or a problem that needs to be solved. At this stage, prospects have many questions and are actively looking for answers. Your goal is to be where your prospects are and give them the answers they are looking for.

In most cases, prospects turn to search engines to find the right information, educate themselves, and find a solution for the challenges they are facing. To generate more leads that are in the awareness stage, cast a wide net and create different types of educational content.

During the awareness stage, search engines (SEO), social media, paid ads, and free events are great ways to attract potential customers and lead them to your website, where they can find more information. Early in the journey, prospects are looking for extensive information, so content types such as deep dive blog posts, ebooks, whitepapers, checklists, industry reports, and educational webinars can be a great lead magnet for the awareness stage.

Aside from this, you can attract prospects’ attention with cold calling, cold email outreach, and outbound campaigns. But keep in mind that at this stage, your primary goal is to educate the prospects, so avoid aggressive sales messaging and instead focus on tackling your prospects’ challenges.

Stage 2: Interest

Once prospects make the first touchpoint with your business, they become leads. Your next goal is to spark interest and move them down the sales funnel. During the interest stage, prospects are looking for different solutions and trying to figure out what is the right one for their needs.

Content types that perform well in the interest stage include expert guides, features, benefits and how-to videos, consultations, and product-related webinars and podcasts. Prospects that are further interested in your products or services can fill out a form on your website, request a demo, or book a meeting.

How you guide your prospects through this stage of the sales funnel will determine whether the prospect will move to the next stage or drop out of the sales funnel. At this point, the biggest concern of your potential customers is collecting the right information to make an informed decision. That’s exactly your goal: address the pain points and concerns, and offer all the information prospects need to move to the consideration stage.

Stage 3: Consideration

The third stage of the sales funnel is consideration. During this stage, prospects evaluate your businesses and might even assess other solutions to see what fits their needs. Since this is a more advanced phase in the buyer’s journey, you need to focus on sharing specific content that showcases the power of your product or service and overcomes all sales objections a prospect might have.

Product demos, training videos, product reviews, free trials, customer testimonials, vendor selection checklists, and case studies are some of the content types that can be useful during the consideration stage.

Sales Funnel Consideration Stage

But here’s the thing: without putting yourself in your customer’s shoes and understanding the buying journey from start to finish, you can't optimize your selling process. To overcome this roadblock, you need a sales funnel.

The Close Sales Funnel Calculator is a valuable tool in this regard. It helps you visualize your sales pipeline and understand how many leads you need, illuminating your path to growing revenue faster.

Creating a well-oiled sales machine requires a careful approach with engaging experiences at every stage of your sales funnel. This way, you’ll be able to understand your customers’ buying journey and create a personalized experience at every stage.

Sales reps have to ask the right questions to see if the lead fits the ideal customer profile, so they can filter the ones that don’t and focus on the ones who will have the biggest impact on the company.

Stage 4: Intent

Prospects that are constantly engaging with your business through different touchpoints are considered high-intent leads. These potential buyers are the ones who fit your ideal customer profile, visit your website frequently, and show purchase intention by visiting your product pages.

Keeping high-intent leads engaged should be your number one priority—otherwise you risk losing them. The intent stage should be all about value and experience. Since the negotiation is the most complex part of the sales process, focus on creating a proposal that targets the biggest pain points of your prospects while showcasing the potential benefits and ROI.

This is also the phase that usually takes more time, so be ready to address all possible objections. Don’t get discouraged if potential customers are not ready to make a purchase—this is where your sales mindset comes into play. Continue nurturing leads through email marketing by offering valuable content for your subscribers, as sometimes it takes a small trigger to move them from intent to action.

Stage 5: Purchase

The purchase is when all your marketing and sales efforts pay off. All previous stages are paving the way from awareness to action, and this is when it finally happens: you convert your prospect to a customer.

During the decision stage, you can reevaluate your lead-to-customer conversion rate and understand the performance of your sales funnel. At this point, you can get a clear picture of how your sales funnel works and what doesn’t convert well, so you can double down on the sales strategies that help you generate more customers.

Based on the performance, you can gather insights around your ideal customers’ buying process that allow you to optimize your sales funnel and improve your conversion rate in the future.

Stage 6: Retention

While most definitions for a sales funnel end up with a purchase, the truth is that if you want to build a future-proof model that brings loyal customers instead of one-time buyers, you have to focus on retention.

The last stage of the sales funnel is your chance to set the right expectations and create a smooth customer onboarding, but also give an upselling offer that increases customer lifetime value.

Your job doesn’t end when you seal the deal. Instead, you have to educate customers about your product or service, show them different use cases, and introduce related products or additional features. You want your customers to be successful with your solution.

By building a solid customer relationship, you can create brand advocates willing to give reviews, share their impressions on social media, or recommend your businesses to their network. As a result, you can boost awareness and maximize the impact of your sales funnel.

How to Create a Sales Funnel For Your Business: A Step by Step Guide

It’s time to cut to the chase and answer the big question: how to create a sales funnel?

Whether you are looking for ways to create an effective sales funnel from scratch or trying to fix your leaky sales funnel, we prepared a step-by-step guide to lead you through the process.

Step #1: Understand Your Target Persona

The only way to attract the right prospects is to know your target audience. What is your ideal customer profile? What are the pain points your prospects are trying to solve? How can your product or service solve prospects’ challenges? These are just some of the questions you need to answer to set the foundation for a sales funnel that converts.

Start by creating an ideal customer profile (ICP). This refers to the type of company that is the perfect fit for your solution. An ICP can help you align your product, sales, and marketing teams and focus on a common goal.

Customers don’t buy products or services. They buy a solution for their problems. And if you don’t understand customer pain points, you can’t offer the right solution.

Ask yourself:

  • Do you understand your potential customer’s pain points?
  • How can the touchpoints in your sales funnel address those pain points?
  • How can you show prospects that your product or service can solve their pain points?

Understanding your target persona is the prerequisite to moving to the next step of building the sales funnel, which is capturing attention by creating value.

Step #2: Capture Attention by Creating Value

In B2B marketing, you have to offer value and create a story to capture attention.

The good news: the right format can amplify your story.

The bad news: the wrong one will make you feel like shouting in the void.

To overcome this challenge, you must build an effective B2B content marketing strategy.

B2B customers regularly use 10 or more channels to interact with sellers. So the only way to create content for different touchpoints is to map the customer journey and understand the different types of content you need for each stage of the sales funnel.

From social media content, lead magnets, and blog posts to videos, webinars, and podcasts, there are plenty of tools that you can use to create value through the marketing funnel. This way, you can attract prospects’ attention, whether they are using Google search, scrolling through social media, or actively looking for information regarding the solution you are selling.

Step #3: Build a Landing Page

If a brick-and-mortar business requires a store visit so customers can make a purchase, your ecommerce business requires a website visit. However, in most cases, your landing page is the first customer touchpoint.

For every type of content you create as a lead magnet, you need a landing page. Create one easily with the help of a landing page builder. Whether that’s an ad, a webinar signup form, or a call to action to download an ebook, you need a landing page that allows you to collect relevant prospect data so they can enter your sales funnel.

Curious to see some examples? Check out our resource library to explore different content formats, and how we structure our landing pages.

Step #4: Nurture the Prospect

Even though in your dream scenario, the prospect fills in a lead magnet form and then decides to buy your solution right away, in reality, that rarely happens. Instead, you must dedicate some time and effort to nurturing prospects until they are ready to make the purchase.

This is where the power of the follow-up comes into play.

But first things first—you need to separate prospects into high-value and low-value leads. To be able to do that, you have to use lead scoring. Lead scoring is a process of ranking leads on a scale based on their different characteristics and behavior to determine their interest in a company’s products or services.

The next step is lead qualification, which helps to determine whether that person indeed matches your ideal client profile (ICP) and whether they are worth processing by the sales team. Once you finish with the lead scoring and qualification, you can focus on nurturing.

You should create an email list, depending on the funnel stage a prospect is at, to be able to use automation for your digital marketing efforts.

Your highest-potential leads should receive an even more personalized treatment. Have your sales reps reach out to them with personalized emails to maximize the chances of engaging them in a sales conversation. A well-planned lead nurture sequence can move prospects through different sales funnel stages to the moment they are ready to take action.

Sales Funnel Nuture Stage

Ready to distinguish and convert? Our comprehensive MQL vs. SQL guide is essential.

Step #5: Bring the Deal Across the Finish Line

This is the moment of truth. Your make or break point. And it is one of the biggest challenges for the sales team. Closing a sale is half science, half art. It requires patience and persistence. You want to ask for the close often and early. In fact, 80% of sales require five follow-ups before taking action.

The good news is that selling is a technique you can master. By using out-of-the-box sales closing techniques, you can boost your conversion rate.

One thing is for sure: if you build your sales strategy considering all the previous steps, you will have a solid sales pipeline that will ease the sales closing process.

Step #6: Build a Strong Customer Relationship

Most companies focus on customer acquisition but then fail at customer retention. The harsh reality is that even if keeping customers loyal becomes harder by the day, the only way to futureproof your business is to build long-lasting customer relationships.

An engaging customer experience is the lifeblood of a strong customer relationship. Educate your customers about your products or services, think of ways to build and maintain customer loyalty, share use cases and best practices, and offer the best customer support to answer all their questions.

To switch gears for a moment: these tips don’t apply to your customers only. Create a separate email list for leads that you haven’t converted into new customers and make sure to engage them as well and be there when they are ready to take action.

Step #7: Measure the Results and Optimize

The only way to improve the performance of your salespeople is to measure the results. Focus on the sales metrics worth tracking, such as numbers of calls made and emails sent, number of scheduled demos, number of meetings, number of opportunities, the length of the sales cycle, number and size of closed deals, and the lead-to-customer conversion rate.

Once you measure results, analyze them, and use the insights to optimize your sales funnel. This is maybe the most important step in building an effective sales funnel.

Why? Think of it this way: no matter how much lead you pour into your sales funnel and even successfully convert them to customers, if you can’t keep them for the long run, you will face serious business challenges. Just like a leaking bucket—no matter how much water you pour in, the only way to fill the buckets to the top and store the water is to get rid of the leaky buckets.

To optimize the sales funnel, you have to identify the friction points. Ask for customer feedback and pay attention to your analytics to find these friction points. Approach it as a continuous process of optimization: You always tweak some parts of the sales process, evaluate the impact of the change, and fine-tune your funnel. Whether that's experimenting with your cold email templates, testing how impactful a new tool can be to your bottom line, or figure out where the biggest potential for improvement is—you should always work on the next evolution of your funnel.

Pro tip: In Close’s Opportunity Funnel Report, you can see your total win rate, and even check the conversion rate per stage.
Sales Funnel Reporting in Close

From attracting the right customers and improving your value proposition to refining your metrics and KPIs and getting organized with the right CRM software, there are plenty of ways to redefine the buyer’s journey and improve your conversions. See how simple it is to build, analyze, and optimize your sales funnel in Close and start your 14-day free trial.

3 Sales Funnel Templates and Examples to Convert More Buyers

Now that we covered the what, why, and how of sales funnels, it’s time to look at three different templates and sales funnel examples that can help you boost sales.

SaaS Sales Funnel

While the basics of a sales funnel are more or less the same for every company, there might be differences depending on the type of business.

Software as a service (SaaS) is a software licensing and delivery model based on a subscription. The unique nature of SaaS businesses requires a distinct sales process, including:

  • Offering customers the possibility of a self-service model
  • Focusing on the highest-quality leads
  • Introducing a product demo to help prospects better understand the solution
  • Using automation to optimize the interactions with prospects and close deals faster
  • Giving a free trial as proof of value during the deal process

The common SaaS sales funnel includes seven stages:

Stage #1: Awareness

Stage #2: Interest

Stage #3: Consideration

Stage #4: Intent

Stage #5: Purchase

Stage #6: Retention

Stage #7: Advocacy

While most stages are the same as the regular sales channel, a critical aspect for SaaS businesses is customer advocacy. Actively working on turning customers into brand ambassadors requires a special focus, which is why you need to add advocacy as the final stage of your SaaS sales funnel.

Customer.io is an automated messaging platform for tech-savvy marketers to send relevant messages based on behavior across web and mobile products. When you open its homepage, you’ll notice two calls to action: request demo and start trial.

SaaS Sales Funnel Example


Prospects interested in getting a demo should fill in a form with their personal information, several contacts, industry, and whether they are evaluating for their business or representing a marketing agency. Based on that information Customer.io can personalize the sales funnel and include custom workflows.

SaaS Sales Funnel Example from Customer.io


Customer.io uses Close to automate their lead assignment and assure that inbound leads are qualified from SDRs. After they get an active opportunity status, they are transferred to account executives so they can close the deal.

On the pricing page, Customer.io offers two pricing tiers: Basic and Premium. Customers who want a basic package can start a trial, and if they want a premium package, they can request a demo.

SaaS Sales Funnel Example from Customer.io


Depending on the product package, customers are added in separate workflows. Customer.io relies heavily on automation, especially for the early stages of its sales process, which saves them valuable time and resources.

SMB Sales Funnel

The traditional sales process takes more time and effort, which can be a challenge for small businesses (SMBs). The limited resources force SMBs to juggle different tasks at the same time and prioritize activities based on urgency.

Here’s where an automated sales funnel can help. Harnessing the power of automation tools can reduce repetitive sales and marketing tasks and allow SMBs to focus on high-impact activities.

The common SMBs sales funnel includes 5 stages:

Stage #1: Awareness

Stage #2: Interest

Stage #3: Consideration

Stage #4: Purchase

Stage #5: Loyalty

Tru Colors is a Wilmington-based brewery committed to ending the cycle of gang violence in America's neighborhoods—by breaking down barriers and creating new opportunities. The primary CTA on its homepage is a shop now button.

SMB Sales Funnel Example


Aside from this, the company uses a pop-up to build its email list by asking website visitors for their names and email in exchange for a chance to win Tru Light merchandise.

SMB Sales Funnel Example TRU Light


On the product page, customers can choose between a three or six-month subscription plan or a beer pack.

SMB Sales Funnel Example


The brand also uses paid ads to promote its products and merch while spreading the mission to unite people and end violence. Most of the ads from Tru Colors are accompanied by high-quality videos heavily focused on storytelling.

SMB Sales Funnel Example


As TRU Colors grows, its mission widens, too. And the team relies on Close to automate and scale up their marketing and sales efforts.

Service, Agency, and Consultancy Sales Funnel

The biggest challenge for service-based businesses is most often lead generation since there is no actual product being sold, so they can’t rely on a free trial or a product demo. Marketing agencies, sales consulting, and travel agencies are examples of service-based businesses.

The unique nature of service-based businesses requires a high-touch sales approach, building relationships, and focusing on referral sales. As a result, these companies should adjust their sales process by:

  • Relying on lead generation to bring traffic
  • Using content creation, social media, and retargeting to build a solid sales pipeline
  • Positioning lead nurture as a vital part of the sales process
  • Focusing on building trust

The common service, agency, and consultancy sales funnel includes six stages:

Stage #1: Awareness

Stage #2: Interest

Stage #3: Consideration

Stage #4: Intent

Stage #5: Purchase

Stage #6: Retention

Sales Transformation Group helps construction, trades, and building materials professions increase profits and predict revenue with proven sales systems. The first call to action on its homepage is a pop-up with a free selling course.

Agency Sales Funnel Example


An essential aspect of service-based businesses is social proof. Sales Transformation Group has a wide list of logos and testimonials on its website to showcase experience and expertise.

Sales Transformation Group Sales Funnel


Content creation is a valuable pillar for lead generation, which is why service-based agencies act like knowledge hubs. Sales Transformation Group has a wide range of cheat sheets, courses, webinars, live events, blog posts, YouTube videos, and more.

Ready to Build and Optimize Your Sales Funnel?

Having a sales funnel can increase the efficiency of your sales team. Being able to see how well each step of the sales process is working can give you the right insight on how to optimize the process to ensure efficient use of time and resources.

And while keeping on top of all the activities sales and customer support teams have during the buyer’s journey, having a CRM tool that powers your end-to-end sales growth engine can be the backbone of your sales funnel.

Curious how you can build and optimize your sales funnel with Close? Try us out today.