The Importance Of Sales Funnels In Business

As business owners, we find ourselves having grand plans for our brands. We perfect our products, build our teams, and set targets. We sometimes forget about one crucial part of our business: sales funnels.

By Ryan Niddel

Consulting experts will attest to the value of sales funnels. Let’s learn more about what sales funnels are and what makes them a crucial part of any business.

Sales Funnel Definition

A sales funnel is a marketing term used to describe our customers’ journey throughout a purchase. It visualizes customers using an upside-down triangle. The funnel shape represents the number of people going through the process, which decreases on the way down.
Let’s discuss the sections of a sales funnel. Some companies customize sales funnels to fit their needs better, but these are the four main parts that should always be present.

  • Awareness: during this stage, a prospect learns about our products or services. Some examples are when a visitor comes across our site for the first time or sees one of our Facebook ads.


  • Interest: the interest stage is when a visitor becomes a potential client. During this stage, the potential client signs up for our mailing list or follows us on social media.


  • Decision: during the decision stage, the potential client is considering our products or services.


  • Action: the action stage is when a potential client becomes an actual customer and avails of our products or services by signing a contract or clicking the purchase button on our website.


While the action stage is the ultimate goal of a sales funnel, it is necessary to create steps to retain these clients. Customer acquisition is costly. Once we acquire new clients, we should build a fruitful relationship with them and find ways to obtain their loyalty.

Why We Should Have Sales Funnels

Now that we’ve discussed what sales funnels are, let’s talk about their importance.

Implementing The Right Marketing Strategies

Having a sales funnel enables us to understand the actions to take during each stage. Different strategies apply to awareness, interest, decision, and action stages.

For example, if we notice that our ads are effective in attracting new clients to our site and signing up for our mailing list but not on closing sales, we can improve on the steps we take in our decision and action stages.
Some strategies we can consider to encourage clients to purchase are:
-Exclusive Promotions

Nurturing Leads Into Customers

If our traffic acquisition strategies are designed only to attract ready buyers, we are setting ourselves up for failure. Purchase cycles are not always instant, like with insurance or real estate products.

With a well-designed sales funnel, we don’t lose our opportunity to close sales from site visitors who show interest in our products or services. We can encourage them to sign up for a mailing list or follow us on our social media pages.

From there, we can keep communicating with potential clients until they are ready to make a purchase.

Building A Mailing List

If we build a mailing list of interested clients, we have more chances of acquiring new customers. Emails are around 40% more effective in getting new clients than leading social media sites.

Email campaigns generally have higher conversion rates and return on investment (ROI) than other digital platforms. It’s been proven effective for most industries.

Retargeting Interested Clients

Certain sites like Facebook and Google have advanced systems that allow us to reach out to interested clients, like those who have abandoned their carts.

Making an effort to reach out to such clients is worth the budget, time, and effort. Retargeted website visitors are more likely to convert by 43%. Instead of running all our ads for awareness, we can generate more revenues by allotting some budget for retargeting efforts.
Increasing Lifetime Value
Most traditional sales models end after achieving a purchase, but with a customized sales funnel, the initial purchase is just the beginning.

It’s vital to keep appealing to existing clients because returning customers spend three times more than one-time buyers do. Having a well-planned sales funnel allows us to retain customers, increase their lifetime value, and upsell to them for years.


Creating a sales funnel takes time and hard work, but it is worth it. It has the power to simplify sales forecasts, improve conversion rates, and generate more revenue. If you don’t have one yet, create one with an experienced management consultant or business consultant and see how a seemingly small thing can make a huge impact on your business.

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