For Agencies
20 min read

Sales Funnel: What Is It & How Does It Work?

Post by
Yash Shah

Every company requires a strategy for delivering goods and services to clients. The buyer's journey serves as an outline for the construction of your sales funnel. Potential buyers should be made aware of the product via sales funnels. Establish a vision, identify goals, and define your target market before deciding on a course of action.

aida model

What is a Sales Funnel?

A sales funnel is a marketing concept that describes the journey a customer takes with every Interaction with the company. A funnel is used as an analogy in the model because while many leads start at the beginning of the sales process, only a small percentage of those people make a purchase at the end.

The two sides of the buying process are the sales funnel and the buyer's journey. The buyer's journey is the process that buyers go through prior to making a purchase. This journey is told from the perspective of the buyer, not the seller, as in a sales funnel. There are 5 stages of the sales funnel

  • Awareness
  • Interest
  • Desire
  • Action
  • Retention

These five stages represent the mindset of your prospective customer. Before you start building your sales funnel, it is essential to have a clear business vision, develop a marketing strategy, and then define your target audience to work towards your business growth

How the sales funnel works

The sales funnel serves as a blank canvas for describing and optimizing your sales process in order to gain more business.

Imagining you are running a Clothing Business and you know your target audience hangs around on Instagram. So following that you run Ads on Instagram that drives traffic to a landing page. You ask your prospect to sign up for your email list in exchange for a lead magnet on the page. Isn't it fairly simple?

Instead of prospects, you now have leads. They're making their way through the funnel.

Over the next few weeks, you will send out content to educate your subscribers about your clothing brand, share different designs, and assist consumers in determining the best style for their wardrobe.

Following that, you add the same customers to a new email list. You restart the process, but with different content.

There you have it:

  1. Awareness: You created an Instagram ad to funnel (pun intended) people to your website.
  2. Interest: In exchange for lead capture, you provide something of value.
  3. Desire: A person starts liking the brand, product, or service.
  4. Action: You provide an irresistible offer to your leads, then begin marketing to them again to increase retention.
  5. Retention - Congratulations, your customer purchased your product; now it is time to deliver a flawless product so that your retention rate increases. As the saying goes, once a customer is satisfied, they will undoubtedly recommend your product to their friends, colleagues, family, and so on. So it's a win-win situation for both parties.

Each step they take downward is another stage of the funnel, bringing them closer to the narrowest point—the point of decision—which you hope will be the point of conversion.

Why sales funnel is important

why sale funnel is important

According to Pardot of businesses have not identified or attempted to measure a sales funnel. According to the same survey, 79 percent of leads are never converted into paying customers. It's safe to say that these outcomes are inextricably linked. It can be difficult for businesses to move leads through the pipeline, make sales, and identify where changes need to be made to improve their processes without an effective sales funnel — also known as a conversion funnel — in place. Sales funnels assist businesses in speeding up the sales process, improving relationships with leads and customers, providing a more personalized approach, increasing sales, and maximizing marketing efforts. What isn't to love?

Google Analytics and other analytics tools can help you visualize the flow of customers across your website and identify pages with high drop-off rates by displaying how many visitors exit the funnel at each step.

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About Author

Yash Shah
Co-founder & Chief Executive

Yash did Mechanical Engineering and worked as an Investment Banker before founding a Tech Agency that grew to 55 people team offering SaaS, FinTech and E-Commerce Web & Mobile app Development. He currently serves as Chief Executive at Clientjoy - a platform that helps 13K+ Agencies & Freelancers in 90+ Countries acquire and retain happier clients.

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