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What is a Sales Funnel?

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What is a Sales Funnel?

Image for Marketing Funnel - Attention, Interest, Desire, Action

If you’re doing business in today’s digital age and you’re not using marketing sales funnels to your advantage, you’re missing out on one of the greatest opportunities in sales marketing. From the moment that a customer is exposed to a product or service, a series of mental processes begin to happen that can ultimately lead a customer into making a purchase.

Understanding how this process works and the psychology behind it can help you increase sales by converting more potential customers into actual ones. The concept of sales funnels has been studied by numerous psychologists over the years because it helps to predict consumer trends, which are often capitalized on by multibillion-dollar corporations.

With that said, here’s everything you need to know about sales funnels and how to use them to your advantage.

So, what is a Sales Funnel?

A sales funnel, also known as a conversion funnel, is a term used in e-commerce that describes the mental and physical process that customers go through when making a purchase.

While many potential customers might see an ad for a product/service or become aware of it by other means, only some out of this group will continue on to show interest in the product/service. Of those who express interest, only some will reach a decision point where they will seriously consider making a purchase. Some customers within this decision group may decide not to buy, while others will continue on to purchase it.

These are the typical sales funnel stages that customers go through. Because there are normally fewer customers left within the group after each successive stage, this concept is compared to the design of a funnel, as funnels become narrower from their top to bottom ends.

Sales Funnel Stages

Here’s a breakdown of each of the four stages of a sales funnel (AIDA) and how to capitalize on each one so there are no missed opportunities along the way.


Stage 1: Awareness

As the first stage within the sales funnel, the awareness stage is where customers first become aware of your product or service. This is the most crucial point of the sales process because potential customers at this stage are less likely to return later and purchase a product than those who make it to other stages.

You also have the most control over this stage compared to others. That’s why a strong marketing campaign or sales pitch is vital to your business’s success. Before you can focus on improving conversions within the other stages, you need to ensure that sales or marketing tactics in this initial stage are rock solid.

Stage 2: Interest

In the second stage of conversion funnels, the interest phase, a customer will decide if they’re interested enough in your brand to eventually move on to making a purchase decision. Before they do so, they will normally want to learn more about your product or service at this stage.

You still have many opportunities at this point to convert a potential customer into a sale because you can control their level of interest by providing them with information.

Instead of allowing a customer to research on their own, use positive customer reviews, studies, awards, or anything else that you can to boost their interest. It’s common at this point for potential customers to go to search engines to research your brand by comparing it to others.

This is where many companies lose their conversions to other companies. So you should always provide as much positive and informative information as you can about your brand right from the start.

You shouldn’t leave any room for there to be question marks over potential customers’ heads, so they’ll feel no reason to go out and research things on their own.

Stage 3: Desire

After a prospective customer has decided they’re interested, they will next decide if they’re interested enough to make a purchase. This is the decision stage, and it’s your last opportunity in a sales funnel to convert a prospect into a full-fledged customer.

The pricing of your products or services is often what they will be analyzing at this point. Even if a customer is excited and genuinely interested in what you’re offering, a high sales price may be a dealbreaker for them. That’s why you need to pay close attention to your pricing and what types of people might be looking at your brand.

Many companies offer different pricing tiers and different levels of products for this reason. You should also use this opportunity to emphasize a positive value-for-cost ratio for your prospective customers. Use videos, charts, or other forms of multimedia to show them how the value of your product or service easily outweighs the cost to them.

Even if a potential customer can afford a product, they might be frugal or budget-conscious and will want you to demonstrate the reasons why it would be wise for them to part with their money.

Stage 4: Action

By the time a prospect reaches stage 4 of a sales funnel, the action stage, you’re left with very little control over the situation but the highest likelihood of making a successful sale.

The action stage, also known as the purchase point, is where the customer is ready to make a purchase, subscribe to your service, or otherwise take the type of action you’re hoping for.

Many entrepreneurs and business owners assume that when a prospect enters the action stage in a sales funnel that this means their job is done and that the conversion is guaranteed to them.

This type of assumption can lead to mistakes or a colossal blunder that can cost you an all-but-guaranteed conversion. At this stage, you need to ensure that the sales process goes smoothly for each customer and don’t leave any opportunities for customers to back out of a purchase.

This is the point where it’s extremely likely that a customer will be buying your product or service, but you should make sure that the sales process is streamlined and easy for them to navigate.

All it takes is a problem with a payment gateway or a difficult checkout process for a converting customer to turn into a frustrated one.

Cart abandonment, whether it happens in a grocery store or on the checkout screen of a website, is a major problem for many companies and it often happens due to a business owner’s neglect during this final conversion funnel stage.

Matching Sales Funnels to Expectations

So what is a sales funnel? Is it simply the thoughts your customers have when making decisions? Not quite. It’s the path they take during the sales process, a path that you have the opportunity to pave and custom-tailor to your business.

You should use sales funnels to your advantage by adjusting your website or sales approach to match what your customers are thinking and feeling. You have full control over the type of sales funnel that your potential customers will experience.

Learn about your customers and what types of people they are. Try to anticipate what your customers’ expectations will be at each stage, so you can deliver exactly what they’re looking for or expecting to find. Anything else is a squandered opportunity.


Sales funnels and the consumer psychology that they’re based on are undeniable aspects of the digital marketing process. Savvy business owners should view conversion funnels not as something extra that will have to learn about, but as an opportunity to improve sales conversions and gain an edge over their competition.

Keep in mind that consumers can be very sensitive along every inch of a sales funnel. You should consider everything, whether it’s the colors you use in your company logo or the type of music that you paired with an advertisement. Those who take the time to learn about sales funnels and who adjust their sales tactics to capitalize on this will surely do well.

Now you no longer have to ask yourself “what is a sales funnel”. To find out more about our digital marketing services, schedule a free consultation session so we can discuss your marketing strategies and how sales funnels can benefit your business.

Lori Newman
Lori Newman
Web Designer & SEO Marketing Director @ NWS. Lori has been developing websites for over 20 years now and is totally obsessed with WordPress. When she's not designing she loves dabbling in photography and videography and spending time with her five grandkids and fur babies.