What Is A Sales Funnel? Stages and Importance

sales funnel

A sales funnel has a great impact on consumers’ behaviour.  One of the greatest business concepts is designing and managing your sales funnel and in this article, you will learn what sales funnel is, the different stages of sales funnel and how to build one for your business.

Let’s begin.

What is a sales funnel?

A sales funnel is a marketing strategy designed to understand each step that a prospect or person has to take in order to become a customer.

For example; a group of people walk by your shop, just a few persons stopped by to check what you have in store, that’s the next sales funnel. Then a prospect noticed some nice shoes and decided to check them out, that’s the next step of the funnel.

Then this customer picks about two different shoes and proceeds to check out and pay, that’s the last stage of the funnel.

The stages of the sales funnel work for all kinds of businesses. It could be in form of email, sales team, store, website, online page and consultation etc.

Also Read: How To Promote Your Small Business Using Online Webinar

The 4 stages of a sales funnel

There are lots of terms used to describe the different stages of a sales funnel and in this article, the four most common stages will be discussed here. You can use the acronym AIDA to remember the four stages of a sales funnel which are awareness, interest, decision and action.

Each of these stages requires a different approach from you because you wouldn’t like to send the wrong message at the wrong time

1. Awareness

This is the stage when you capture a prospect’s attention for the first time. It could be through Facebook, Instagram, Google search, Whatsapp, billboard or some other channel. Here, the prospect becomes aware of your business and its offers.

Sometimes, the prospects may buy immediately while in most cases, they do not buy but will return to your website to engage with your business.

2. Interest

At the interest stage in a sales funnel, a consumer is actively searching for information that will help them solve a need, making comparison and weighing some options. The quality of the content that the prospect consumes on your website will help them to make an informed decision about your business

3. Decision

The prospect has made a decision and is ready to buy at this stage. He must have considered some many other options and has settled for a few or one.

This is when your business strategy comes in, you must make your best offer, which could be making payment on delivery, free shipping, 20% discount for first-time customers, buy two get one free, webinar, sales page etc. It has to be something that they can not afford to miss.

4. Action

Action is the last stage of a sales funnel. In this case, the customer has finally bought your products and yes! you sure do not want the customer to stop at one purchase, you would like the customer to come back for more purchase.

Therefore, your main focus should be to retain the customer. Appreciate every customer no matter the number of products that buy, ask for their feedback, make them write reviews and ask for referrals. One happy customer can bring in two or more customers for you.

How sales funnel works

This explains how a consumer started off by being a visitor to prospect to a lead and then a customer. A visitor was at your website either through a referral, social link or Google search.  Already at this point, he is a prospect.

The prospect then goes ahead to check your products, services and blog post and while the prospect is on this, you offer him or her an opportunity to sign up for your webinar or email list.

If peradventure, the prospects successfully signs up, he or she automatically becomes a lead. By generating leads from prospects, you target them outside your website and market to them. There is a great possibility that the prospects will return to your website if you offer good deals or propelling messages.

Nevertheless, you can influence a prospect’s journey but you will need to fully understand your marketing funnel so that optimization will be easy for you.

Importance of a sales funnel

1. Your sales funnel is very important because it helps you to understand a customer journey. When a prospect visits but did not make any purchase, you can revisit your sales funnel to find out what stage the customer drops and why the customer never bought from your brand.

2. The sales funnel gives you a valuable framework through which you can analyze your business and identify areas for improvement.

3. It can help your business to grow and generate more sales if you master the art of the sales funnel very well. The whole essence is to turn prospects into customers and customers into returning customers.

Also Read: Small Business Tips: How to deal with difficult customers in Business


As you begin to study your customer’s journey, you will notice that you have more people at the top of the sales funnel than you will eventually have at the bottom of the funnel. Creating a sales channel requires a lot of hard work and dedication. So, if you want to stay ahead of your competitors, you must learn how to design and optimize your sales funnel.