What is a sales funnel? Stages, importance, and examples

A sales funnel refers to the cumulative steps a potential buyer takes to convert and become a customer. Here’s how it works.

By Donny Kelwig, Contributing Writer

Published June 11, 2021
Last updated March 23, 2022

The concept of sales funnels is a little misleading. A real funnel is designed to catch and pour out everything you put into it. But not every prospect that enters the top of your funnel will come out the other end as a customer—there’s bound to be some pretty significant spillage along the way.

But that doesn’t mean your sales and marketing teams should settle for a slow drip of conversions. With the right approach to funnel building, your business can generate more leads at the top of the funnel and more deals at the bottom.

In this comprehensive guide, you’ll learn what a sales funnel is, the process and theory behind sales funnels, and how you can build your own using examples.

What are sales funnels, and how do they work?

Sales funnels are sales and marketing tools used to illustrate the steps of the customer journey. Think of it as a visual roadmap of your customer’s journey that shows exactly where they are in the buying process at any given time.

The concept of sales funnels has been around for a long time. The oldest acronym in sales, AIDA, is a general four-step sales process model that charts the customer’s journey from initial awareness to eventual purchase.

  1. Awareness: The prospective customer first discovers the existence of a product or service.
  2. Interest: The potential customer actively expresses interest in said product or service.
  3. Decision: They fully understand the product and know what it can offer them, and the buyer decides they want it.
  4. Action: The purchase is finally made, and the prospect becomes a customer.

Obviously, not every potential customer makes it all the way through the AIDA process. The number of people in your funnel naturally narrows at each stage.

While the AIDA model has long provided a foundation for sales and marketing teams, it’s been adapted or elaborated upon over the years. For example, the basic B2B model features five steps and the novel “Evaluation” and “Engagement” stages.

sales funnel stages

The Evaluation stage accounts for the fact that clients typically take more time to deliberate internally before making a purchase. Engagement refers to the sales agent’s responsibility to continue nurturing prospects during negotiations and contracting.

Of course, even the five-stage model is too simple for some companies. Organizations may create their own strategies that enable them to chart customer paths in a way that works for them.

Why is a sales funnel important?

Given the fine details involved with every company’s sales process, it can be hard to know what to improve upon. Over time, sales managers can see patterns in their team’s performance. But there are few ways to tell which areas need extra attention without the right sales data.

Funnels help businesses see the bigger picture of what’s happening in each stage of the conversion process. Essentially, every step has its own strategies that can increase conversion over time. If some stages are underperforming or causing customers to lose interest, sales teams can pinpoint exactly where things went wrong and then go in and course correct.

Sales funnel stages

employee engagement customer service

The sales process can be broken down into a general pattern of top, middle, and bottom. Using the four-step process, the Decision phase is split into the Evaluation and Engagement stages mentioned previously.


The customer journey ideally begins before a buyer even thinks about becoming a customer. Creating brand awareness is always the first step in any typical sales funnel—you need to figure out how to get on a buyer’s radar.

Stage 1: Awareness

sales funnel

The Awareness stage is the point where the buyer first starts to notice a company. And for businesses with full-funnel tracking, it’s also where the company starts to notice the buyer.

In this stage, the potential customer looks through a company’s services, browsing different product descriptions and even doing competitor research along the way. At this point in the buying process, they aren’t interested in anything specific, but rather seeking out a solution.

Consumers usually learn about a company by seeing or hearing an advertisement. Traditional advertising channels—such as billboards and television commercials—cast a pretty wide net. But today’s technology allows for increasingly targeted advertising. For example, companies can now purchase customer data that allows them to gear their online ads towards their target audience. (That’s why after you buy hiking boots from one company, you start seeing Instagram ads for another company’s canteens.)

Marketers can also capture the attention of prospects through their lead generation process. There are several generation channels that companies can take advantage of, including:

  • Blogs

    The Content Marketing Institute’s 2020 B2B Benchmarks Report found that 70 percent of B2B brands use content marketing to help generate prospects. So if you don’t have one already, start publishing a blog that’s relevant to your customer base.

    Create content focused on the core topics you want your brand to embody, and optimize it to rank for related keywords. Make sure the articles are engaging and easy to share on social media, too. You should also include a call to action (CTA) near the beginning of the blog, as some visitors won’t read the entire article.

  • Email

    There are two types of email marketing campaigns: outbound and inbound. Outbound marketing involves sending emails to buyers who have not initiated contact with your brand. These unsolicited messages typically don’t perform well, but there are ways to increase open rates for “cold emails” as well as free email templates you can follow.

    Meanwhile, inbound email marketing involves sending messages to prospects who have shown some interest in your brand and gave you their email address. Perhaps they accessed gated content or signed up for a newsletter. These types of prospects tend to be more receptive and are often easier to target. For example, you may design unique email drip campaigns to send to different customer personas. Or, you might create a newsletter with information that speaks directly to a prospect’s pain points.

  • Web

    Don’t forget that your brand’s website also functions as a generation channel. Potential buyers are apt to look at pricing pages, product descriptions, customer testimonials, and other sections of your site. Make sure every page includes a simple and direct CTA, such as a “Download a free trial,” “Book a meeting,” or “Talk to sales” button.

    A prospect’s web activity can tell you a lot about their level of intent to purchase. For example, visiting a pricing page multiple times is probably enough to establish a prospect as an MQL—marketing qualified lead.

  • Social media

    Platforms like Instagram, Facebook, and Twitter have become multipurpose tools for many companies. They enable businesses to gauge public perception, promote their brands through social proof, and provide quick and easy customer service.

    Paid social could play a big role in your lead generation efforts. You can pay to use cookies to track the target audience that visits your website, then focus on those prospects with promotional tweets and posts on their social media feeds. This type of customized marketing is more cost-effective than paying to promote one post to a large, indiscriminate group of consumers.

    Of course, there are also ways to spread the word on social media without spending a dime. For example, employees often share their company’s blog posts on LinkedIn to generate awareness and interest in their own networks.

No matter which channel you choose, it’s important to tailor the content to the buyer personas you’re hoping to convert. You don’t want to lose a prospect’s attention by sharing information that they won’t find relevant.

First, find out what these potential customers want to see from your brand. B2B brands can often learn from their existing leads by examining requests for proposals (RFPs), for instance. Studying the characteristics and habits of your own customer base can also help you define your ideal prospect. Then, once a consumer starts to show interest in what a company has to offer, they turn into a lead.

Stage 2: Interest

sales funnel

When a lead is in this stage, they’re done looking around and starting to explore specifics. They’ll do comparisons of different products, learn more about the company, and begin to imagine what each product can do for them.

They’re not often dead set on a specific company by this point, but they have started to focus on one or two products that can solve their problems. This is where sales teams will start the lead scoring process. They’ll look at which potential buyers they need to focus on and which ones they can leave on the backburner.

Once prospects show more interest, they move to the next stage in the buyer journey.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.


Moving potential buyers from the top to the middle is a delicate and often lengthy process. Companies need to repeatedly demonstrate their value just to earn a prospect’s consideration (let alone their business).

Stage 3: Evaluation

sales funnel

Potential buyers in the Evaluation stage are MQLs who understand what a company’s product can do, and they’ve decided whether or not it can help them.

With the right marketing techniques, the company should know its sales tactics for closing a deal. This can include defining their unique selling proposition (USP), developing possible discount rates, or understanding buzzwords that will close a sale faster.

This is where drip email campaigns can help maintain interest over an extended period of time. Send content that’s optimized to engage and educate your particular customer profile. You can use a CRM tool to schedule these email campaigns and to measure their success rate so you can continue improving over time.

You don’t want to overwhelm top-of-funnel leads with too many promotional emails at once. But if you’re driving a more established buyer further down your sales process, try a few of these tactics:

  • Experiment with different subject lines. Continually A/B test various options to see which subject lines have the best open and click-through rates.
  • Customize your message. It’s best to personalize sales emails as much as possible. Always address the recipient by name, and if possible, ditch generic opening lines in favor of something unique to the reader.
  • Keep the text short. Brevity is the soul of sales emails. Studies have shown that messages between 50 and 125 words tend to have the best sales email response rates.
  • Always end with a clear CTA. Let the client know what they can do to keep the conversation going. It could be as simple as including a link to your calendar and asking them to schedule a five-minute conversation.

Ideally, a well-nurtured lead will eventually connect with a sales rep. During that first interaction, it’s imperative that the rep demonstrates an empathetic understanding of pain points.

Stage 4: Engagement

sales funnel

With the help of sales reps and clearly defined service level agreements (SLAs), the buyer transfers to the Engagement stage.

Leads in the Engagement stage are sales-qualified leads (SQLs) that know the value of a company’s product, and they’re willing to know the terms of a sale. By this stage, each potential buyer sees how a product can solve their problems. Any leads that leave the funnel at this point seek out an alternative solution to the same problem. This could be from a competitor or a different product entirely.

Research your lead to gain a better understanding of their particular situation. Then, develop a script for explaining the unique ways in which your product or service can help solve the challenges they’re facing. In the initial call, quickly point out your value and your ability to address their needs. Be sure to also leave plenty of time for the buyer to ask questions.

Sales reps should use their CRM system to document the questions and challenges that leads typically bring up during their introductory meetings. Going forward, reps can reference that information to anticipate upcoming questions and set first-call agendas.

Once you’ve established a real relationship with your potential buyer, your job is to maintain a connection with them in the middle of the funnel. Don’t let the connection fade or disappear entirely. The middle of the sales process can involve a lot of follow-up calls or emails to get updates on a trial demo or a piece of content the prospect has downloaded. Even in the instance of radio silence, working to maintain the relationship is vital.


This is where it’s time to pull out all of the stops. Your client has shown interest, and they’re willing to make a deal. Without the right sales tactics, a buyer could easily get cold feet, so it’s time to begin the closing process.

Stage 5: Action

sales funnel

Even if a deal seems inevitable, it’s critical that sales reps continue guiding a lead through the final stages. Easing up on a prospective customer toward the bottom can cost you a win that’s been the culmination of a lot of people’s hard work. Instead, usher your potential buyers across the finish line by using the ASK process:

  • Align priorities. Once again, show your lead that you fully understand their pain points, and reiterate how you can solve them.
  • Secure a commitment. Remind them of what they stand to gain, and offer to answer any lingering questions.
  • Keep your relationship alive. Even if they ultimately say no, be sure to follow up with them at a future date. They may come around if their situation changes down the road. And if not, they still might offer valuable insight into how you can improve the customer experience for future clients.

If you actively engage your prospects, you increase the chances of conversion and establish a potentially fruitful, long-lasting relationship. In some cases, those relationships can prove even more profitable than the initial deal.

Making the right CTA is also crucial at this stage. Using information you’ve developed with your client, redefine what your product has to offer, show them how it can solve their problems, and give them a reason to make a purchase as soon as possible. This will remind them why they’re interested in the first place and increase your conversion rate for this stage.

For many B2B, SaaS, and subscription-based businesses, the sales process doesn’t really end with the purchase. Once a prospect becomes a customer, the sales rep turns their focus towards retention. Reps need to keep in touch with customers to make sure they’re still satisfied and to identify potential upsell opportunities.

Even if you’re not concerned with customer churn, almost all companies benefit from repeat business. Holding on to a loyal customer with proper customer retention strategies is always cheaper and easier than acquiring a new one. Happy customers are also more likely to provide referrals.

Sales reps should continually check in with existing customers by sending out surveys and follow-up emails. Try to find out what they like (and don’t like) about your product or service. If the relationship is strong enough, consider asking for a customer testimonial. You can also sweeten the pot by offering discounts or other rewards to customers who refer friends or post online reviews.

A funnel example

Let’s map out a B2B sales funnel process example. A marketing automation platform, for instance, may want to attract and retain more customers through a streamlined sales pipeline process. The company could put out several Facebook ads to their target audience based on their projected buyer persona.

Because many customers can click on ads after seeing several of them in a time period, this collection of ads could be a way for customers to find you. After interacting with one of your ads, let’s say a prospect goes to a landing page you created with an option to sign up for an email list. If these prospects subscribe, they’ll be provided with free introductory guides and whitepapers on how they can use marketing automation for their own business. Now, prospects have made their way from the top of the funnel to the middle.

Once they’ve signed up for the email nurture flow and have received a few free resources, these consumers are offered a free trial of the automation platform. The prospects who sign up will be contacted by sales reps with the hopes of them becoming paying customers. This is the bottom of the funnel.

These customers have just made their way through the sales funnel. Let’s look at the basic four-stage funnel process to examine this:

  1. Awareness stage. Social media ads draw consumers to the product.
  2. Interest stage. Prospects are offered free guides in exchange for signing up for the email list.
  3. Decision stage. The audience learns about the platform and its uses and are preparing to use it for their own businesses.
  4. Action stage. You offer a great deal, encouraging these prospects to become paying customers.

How to build a sales funnel strategy

Whether you use the five-stage model or another funnel strategy, creating one is an extensive process. It’s going to take a significant amount of research and effort to determine what methods will work best for your company, your sales reps, and your customers. But by starting from the top and making your way to the bottom of the funnel, you can create a seamless sales process that will allow you to retain more customers than you would without a thorough structure.

You can enhance every stage of your sales funnel with sales technology and automated sales funnel tools. A software solution like Zendesk Sell, for example, enables you to automatically capture and score leads, schedule and personalize email campaigns, and document all prospect and customer interactions. With automated pipeline tracking, Zendesk Sell also helps you guide and track potential buyers as they graduate from leads to paying customers. It even provides funnel reports and countless metrics so you can measure and refine your process over time.

Request a demo of Zendesk Sell today to get the most out of your sales funnel.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Read now