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July 20, 2016

How to Establish an Effective Sales Funnel

What is a Sales Funnel?

A sales funnel is a general outline that depicts each step of the selling process, from attracting initial audiences, to making the very first sale. The funnel is used to determine ways a company can attract new audiences, make sales, and ultimately increase their conversion rates.While particularly useful for new ecommerce stores, businesses of any size can take advantage of the sales funnel diagram.

How to Create an Internet Marketing Sales Funnel

Creating a sales funnel requires several key components. The sales funnel works from the top down, first outlining ways new shoppers can be reached. The sales funnel stages work to attract new audiences and convert them into loyal customers, and the stages of each sales funnel may differ between businesses. Generally speaking, the stages of the sales funnel include:

  • Exposure
  • Discovery
  • Consideration
  • Conversion
  • Retention

Drawing an actual sales funnel diagram is one of the best ways to understand the cycle. Once you’ve drawn the diagram, write notes on how you can accomplish each step of the plan.

Completing the Sales Funnel Stages


Exposure is the first stage of the business funnel for nearly all businesses. During this stage, businesses are looking to attract new audiences to their store. Exposure involves the use of both inbound and outbound marketing methods, but recent trends show a rise in popularity for inbound marketing methods.

While online advertising and social media marketing can be used for exposure, more and more businesses are turning to blogs to reach new potential customers.  A blog allows a business to reach audience based on their pre-existing interests. Other popular inbound marketing methods for increasing exposure include social media marketing and video marketing.


If your exposure methods are effective, you will attract new audiences to your brand with time. This takes us to the next step of the sales funnel: discovery.

Today’s online shoppers are savvy, and they take their time to familiarize themselves with a brand before making a purchase. They may visit your store several times before making their first purchase, as they learn more about who you are as a company and what your products have to offer.

The discovery stage works hand in hand with branding. Shoppers don’t just want to buy a product, they want to buy an experience, and they want to support companies that share their same values.

During the Discovery stage of the sales funnel, you’ll want to collect information about shoppers who have visited your site.

Collect emails from shoppers by asking them to join your subscriber list. When asking visitors to sign up for your subscriber list, offer them something they will appreciate in return.

Common incentives for subscribing include first-time buyer discounts, free shipping coupons, and free gifts. Once you’ve established a database of shopper emails (leads), you can send them information about your company, your products, and your upcoming sales.


The third stage of the sales funnel comes into play after the shopper has learned the basics of your company and your products. Some shoppers will immediately leave your store if you are not offering something that fits their needs, but others will take the time to consider what you’re offering before making a final decision.

This is known as the Consideration stage of the sales funnel. At this point, your store visitor may compare your products to those of a competitor.

Your pricing, product quality, shipping time, and shipping costs will play a significant role in determining how the consideration stage plays out.

Online shoppers take consideration very seriously when making a purchase. Most shoppers are aware that the product they want or need is available from more than one source online.

Many customers experience shopper’s anxiety when browsing online, and it’s your duty as a company to ease this anxiety in any way possible. The third stage of the sales funnel can work your way if you eliminate any factors that may cause shoppers to hesitate from purchasing your product:

  • Keep shipping prices and shipping times reasonable
  • Show customer reviews on product pages
  • Offer coupons or discounts to first time customers
  • Offer a money-back guarantee if your customer is unsatisfied with their product


If you’ve effectively diminished shopper’s anxiety, your store visitor should convert from a lead into a customer after a few visits to your store. Conversion is the fourth step of the sales funnel.

After you’ve reached new audiences with your exposure methods, created a list of leads from first-time store visitors, and proven yourself as a business others can trust, you’ll begin to see sales and conversion rates soar. High conversion rates are important to any business, but they are not the end goal of the sales funnel.


The final step of the sales funnel is Retention. When customers are happy with their shopping experience, they will be more likely to return for a future transaction.

Building a relationship with your customers is the best way to improve retention. Customers want to feel cared for by the companies from which they make purchases.

If you offer 3-day shipping, your customer must receive their purchase in three days if you expect them to feel satisfied. If your customer has an issue with a product they received, they will expect fast and effective customer service to have the issue resolved.

Ultimately, retention comes down to making your customer happy. If your customer feels they’ve had a phenomenal shopping experience, they’ll be more likely to return in the future, as well as recommend your brand to others.

Even if a customer’s product arrived broken or several days late, excellent customer service and a money-back/replacement guarantee can be enough to convert them into a loyal, repeat buyer.

One of the best ways to improve retention rates is to ask customers what you can do better. Ask your customers to fill out a survey, detailing what they liked about your service and what you can do better. Offer your customers something small in return, such as a coupon or an entrance into a sweepstakes.

The more survey responses you get, the more feedback you will have about your products and services. Listen to customer feedback in order to foster excellent customer relationships and improve retention rates.

Measuring the Success of Your Sales Funnel

Your sales funnel diagram is an excellent tool for achieving growth, but you’ll need to measure that growth in some way. After you’ve implemented your sales funnel, you’ll want to see how your opt-ins and sales numbers have changed.

Monitoring your opt-ins should be done using your email marketing program. Most programs that manage your email list will have a tool to measure your opt-in rates; this tool should be used to see how many site visitors were converted into leads, as well as how this number changes with time.

If the number increases, you’ll know your sales funnel is working for you. If you see little to no improvement, you’ll want to figure out what can be changed to improve your rate of opt-ins.

Finally, you’ll want to track the most important variable: sales. The sales funnel is about attracting leads and converting them into customers, and your sales numbers will dictate the effectiveness of your sales funnel. Note any changes in revenue from week to week or month to month. As time passes, make the necessary changes to continually improve your sales number day in and day out.

Talk to an ecommerce specialist today

Need help optimizing your eCommerce website? Book a free consultation and learn how an effective eCommerce website or digital marketing program will help convert shoppers into buyers today.

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