What a sales and marketing funnel is, why you need one and how to create one (guide)


The sales and marketing funnel (or sales funnel, or marketing funnel) often looks like, or is presented as, a complex topic. There are hundreds of services out there to help you build your funnel. But what is it?

The sales and marketing funnel is very simply the process by which strangers, people you don’t know, become customers. It is a concept that has been around since the beginning of marketing and it is important because people you don’t know won’t just buy from you - they need to get to know you first. This is not a digital concept - the great thing about digital is that it allows you to automate large parts of the funnel.

What marketers mean by “the funnel”

Do a little bit of searching for marketing strategy and digital marketing strategy, and you will pretty quickly come up against the idea of the funnel.

We call this the sales funnel or the marketing funnel; I call it the sales and marketing funnel, but the idea is always the same.  Funnels are a big deal right now in digital marketing; digital technology is very helpful in managing and automating the funnel.

However, the funnel has been around for as long as marketing has been around.  

Why is it called a funnel?

Imagine a real-world funnel:  wide at the top and narrow at the bottom.

In marketing, the top end is all of the awareness that you generate or the interest in what you do.  There are millions of people out there who are not only not your customers but have no idea that you exist. 

The sales and marketing funnel

The sales and marketing funnel

Your marketing starts by raising awareness of you in people who know nothing about you.

From awareness those who are interested move to consideration or engagement, where they learn more about your services, products and what you do.  Only a fraction of those who become aware will take this step.  

So, think of engagement as the middle part of the funnel. 

From engagement, you encourage prospects to become customers.  Only a fraction of those who are interested become customers.  

This is the narrowest part of the funnel.

The next step is to encourage customers to be your advocates. Ideally, all customers will be happy to advocate on your behalf, so we don't like to think of a narrowing here.  

But, it happens.

The sales funnel versus the marketing funnel

The sales funnel and marketing funnel are exactly the same concept with a different focus. Marketing focuses on generating leads, so moving people from “stranger” to “qualified lead”. Sales takes the qualified lead and works on converting them to customers. The “sales funnel” is more detailed breakdown of the conversion phase.

Not all qualified leads become customers so there is a weaning out here as well as the sales process moves from

  • a pitch to

  • a proposal to

  • a contract to

  • a signature.

The funnel concept comes from psychology

Funnel dating.png

The essence of sales and marketing is building rapport and establishing trust, relevance and authority.  

This is a lot like dating. Your future client or customer is going to put a part of their life or livelihood in your hands, they must trust that you have a solution.

So they want to spend time with you and get to know you.

Desmond Morris was a zoologist who identified twelve stages of intimacy. He found that couples who went through all 12 stages developed more meaningful relationships - those who skipped a stage did not…

Likewise in marketing, the online marketing institute (and the general marketing rules that you learn in business school): we need 7 to 13 Touches to generate interest in our product.  

If you think about it, dating is also a funnel, you ask a few people out, some say yes, dating continues and eventually one person becomes a spouse.

In marketing the funnel systemizes these “touches” (or interactions, because in marketing there isn’t physical touching involved) so that your prospect has the best, most relevant, experience possible and you are putting your best foot forward.

This systemization is important because while the process feels like an intimate one on one relationship to your prospect/client, to you this is like addressing a large crowd: you must talk to a lot of people for a few of them to be interested.

Funnel relationship building from the perspective of the marketer.

Funnel relationship building from the perspective of the marketer.


Digital didn’t invent but has transformed the funnel.

Before digital, marketers had limited channels to connect with prospects.

Expensive media were the only way to expose large numbers of people to your brand.  

Then, the engagement step was limited to face to face meetings, paper mailings or events. 

[Related: Engage Humans Not Goldfish - Humans Have An 8 Second Attention Span]

Expensive media and physical engagement all exist today and are useful today, but digital channels now allow anybody to communicate with anyone.  

You no longer have to spend 10s of millions of dollars to create engagement. 

This is a great opportunity and a whole new set of challenges. It is great to have access… but while you have access, so does everybody else.

So there is a din of sales speak and a desperate crush of marketers trying to be heard.

In the past, there were only a few channels so if you had the money you could promote your business.

The fact that you had the money and could afford to get the word out helped establish your authority.

Now that everybody is sharing content all the time, your content must genuinely answer a need and connect with your audience, or it won't stand out. Money is less important, quality is more important.

The good news is that most people are lousy at getting the word out.  So, anybody who has a good solution and can communicate it clearly can do very well. 

Another great benefit of digital is that it allows you to automate large parts of the funnel.  

Whereas before you had to have a store or in-person meetings to meet with prospects, now you can do use digital channels to manage much of this engagement. 

Much of the funnel can be automated: making the whole building relationships thing much easier.

Much of the funnel can be automated: making the whole building relationships thing much easier.

Today’s funnel is often described as a multi-step, multi-mode process that moves strangers from buyers.  

It is multi-step because there is a lot that happens from awareness to engagement to conversion.  Prospects need those 7 to 13 touch points.  Think of it as a journey they have to take, from not knowing you at all to trusting you to buying from you.  

The funnel is multimodal because it is useful to use different modes of communication:

  • email sequences,

  • webinars,

  • presentations,

  • phone calls.

Even paper mail can still be a great differentiator and a useful touchpoint in the funnel.

Most of these can be automated, certainly the email sequences and webinars which almost always exist at the top of the funnel and involve the greatest number of people.

Once you get to the narrow end, conducting a few phone calls with interested prospects can be a real pleasure.

But whether automated or not, All of these come together to create an experience for the prospect that helps them understand the need and your authority.  

The stages of the sales and marketing funnel

Stage 1, the top of the marketing funnel is awareness

Most people don't know you exist; this is the first challenge you must tackle.  For someone to buy from you they must know who you are, so the awareness step is about making someone known to you and you known to them, they move from stranger to contact. 

You generate awareness by getting your message in front of people.  So you create a message that connects and promote it through channels that your target audience uses.  

 The message is a critical first step and spending some time honing it will pay off.  The key to the message is to make it about the reader or prospect.  Remember: your prospect is in their world and they know nothing about you, so your message demonstrates that you understand their world and the problem they have.

[Related: Learn to sell yourself by connecting worlds]

As a part of honing your message, you get to understand your customer better.  It is a good idea here to create a customer persona or avatar so that you get to know them better.  This will help you determine what channels they are likely to use to find you.

For example: if you are selling insurance to octogenarians, you will use different channels than if you are selling an app to college students.  

Once you know your message and your channels you create campaigns.  

These are advertisements, posts, events, anything that will get your message out to a large number of people so that they can see your message and identify as someone who has the problem you solve.  

That they can and do self-identify as someone who wants to do business with you is critical: you don’t want to spend your time talking to thousands of people who will be completely uninterested.  

Awareness ends when you have their contact information. So, the crucial final step of awareness is a call to action that encourages prospects to provide that information.  

In digital marketing, you use posts, paid media, advertisements, videos to reach people then drive them to your website or a landing page or a form where they sign up for your mailing list or program. 

They provide their information in exchange for some piece of content that makes their life better.

Stage 2: Engagement

There are many names for this step: consideration, relationship building, interest – we use engagement.   

The idea here is that you have identified prospects and now you develop a relationship with them.  They get to know you, over time and you establish trust, relevance, and authority.

Think of engagement as very similar to a personal relationship: this is the dating process.  The sale is a marriage.  If you ask 500 people to marry you as soon as they meet you one might say yes.

However, if you date for a while, you build a relationship, rapport, love a desire to be together.  

It is the same in your marketing funnel. The engagement process builds rapport so that prospects trust you and see you as relevant.

Interestingly this process is biologically the same as dating. When someone begins to trust you their brain secretes oxytocin – a drug that makes you feel trust towards a person.  

[Related: How to Attract Clients Using Oxytocin]

You do this in the engagement process by providing prospects with solutions.  Remember engagement is not about making the sale it is about building trust, relevance, and authority.  So, you don't ask for the sale; you provide useful information.

 The usefulness is what increases trust. 

Don’t worry about sharing too much information:

your prospects do not have the capability or time to do what you do. You are much better off sharing widely and creating the relationship than keeping your process hidden.  

The way to start engagement is through an e-mail drip campaign.  

Again, there are many channels and many ways to communicate.  Use the digital channels available: social media, webinars, videos, blogs but also offline methods: presentations, paper mailing, and books to name a few.

 This is the multimodal or "omnichannel" part of the relationship.  You work through these channels to touch your prospects in different ways so that they become interested in doing business with you.

Much of the process can be automated. 

E-mails, webinars and many types of outreach can all reach your target through automated series that build the relationship on your behalf. 

Engagement is most potent when it is authentic and real. You don't need to trick people – be you, be clear and show what you can do.

 As you go through this process, there are some important principles to remember; this isn't just about dumping content on people, but instead influencing them and building a connection. 

How to incorporate the the six principles of influence into the funnel

Again, this isn’t new.  Robert Caldini outlined six principles of influence in his 1984 book Influence.  Humans don't change much, and these are as valuable today in your engagement process as they ever were:  

  • The principle of reciprocity – Provide your prospects with value. Start with the free offer that drives awareness, then engage with content that solves real problems. You aren't selling here; you are providing value.   

  • The principle of commitment & consistency – The more you can encourage agreement or action the closer you will draw people to you.  Some great marketing funnels ask you for a commitment before letting you move forward, Danny Iny’s Mirasee bootcamp program is a great example.  A commitment can be as small as a click – but it is effectively training the prospect to take action.  

  • The principle of liking– The more people like you the more likely they will buy.  So, a clear story and an authentic presence are vital.  Liking is an emotional connection and getting people to like you requires that you appeal to the reptilian brain or the emotional core.  You lead with the heart here, rather than the intellect.  An essential part of liking is clarity about your "why" and connecting with that.

  • The principle of authority – You must establish your authority or why you.  Why should I believe you can do what you do?  What positions you as an authority?   Authority comes from your experience and education but is also research or statistics that support your claims.  Having a clear process and your signature program helps establish your authority.   

  • The principle of social proof – Here you show what other people are saying about you: testimonials, social interaction, partnerships and relationships will be essential here.  

  • The principle of scarcity – Scarcity inspires the fear of missing out. This is a powerful tool for encouraging interest and is the value of limited time offers and limited slots in a class or webinar.  If your prospect feels that something might not be available to them in the future, they will be much more likely to want it now

 It can take some time for them to be interested in doing business with you, you may need months of content and outreach, using these principles and establishing trust, relevance, and authority.  

That is okay, especially when it is automated. 

You will also lose people along the way: not everybody who signs up for engagement will become your customer.  That is also okay.  You only want to spend your time on those who will be your customer. 

However, once you have developed rapport and your prospects are interested, you can invite them to move to the next stage, conversion.  

You do this with Calls to Action in your engagement content that encourages them to take the next step.  

In conversion, they become your customer.

Stage 3: Conversion

The final action step is conversion or the sale. In engagement you build the relationship, here you make the sale.  

In some cases, this is a simple sale: encouraging people to click a button to buy. 

In professional services, this often requires a process.  You have to align on what needs to be done, establish contract terms and finalize the sales process. 

You want the conversion part of the process to be simple, straightforward and as quick as possible.  As questions and concerns come up in the conversion process, you can build these into your engagement process so that you preemptively address concerns and issues.

Conversion, sales, can be much work, but the idea of the funnel is to simplify this process.  The funnel prepares prospects for the sale, so by the time they get here they are ready to buy.

Stage 4: Advocacy

Advocacy is the final stage of the funnel, and too often it is ignored.   

It comes after you have delivered for your client. 

The idea is that Once you have done business with a client, they can become your advocate.  Through referrals or testimonials, they encourage people to enter the top of your funnel.  Sometimes they share so much trust and relevance that they bring people right into the conversion process. 

Remember to ask for advocacy.  Create a program that encourages referrals and helps your customers be your advocates. 

Remember that if you do a good job people are happy to advocate on your behalf, they like to share their latest discovery or best solution with friends and colleagues.  So be sure to give them the opportunity.  

Managing the funnel

In addition to automating the funnel, one of the best attributes of digital funnels is the ability to measure every step of the process. You should track and measure how your prospects make it through your funnel.  Measurement allows you to hone your message and improve your outreach.

Metrics also help you figure out how to invest in your funnel.  

Awareness can cost money.  How much you spend depends on how valuable your customers are, the cost of putting them through the funnel and the likelihood that they will buy. 

Say you have a funnel that generates clients that have a lifetime value of $10,000. How much would you be willing to spend to attract and engage them?

Anything less than $10,000 would be fine. The lower the number the better, but as long as the cost of acquisition is less than the lifetime value make money. The max would be $9,999, but ideally it would be much less. Still, say the cost of acquisition is $2500. That is fine. But you don’t want to spend the $2500 until you know how to spend it and that the end result will be a customer worth $10,000.

That is why metrics are so important, and so valuable.

Final thoughts

The funnel is not new, it is a tried and true process for finding, engaging with and selling to prospects.  Digital makes the funnel efficient, automatic and measurable in a way that was never possible before.  

Take the time to create a powerful funnel, and you will see a dramatic shift in your business.  Once built it will work for, and your marketing effort reduces while your close ratio increases.

 So think funnels, and grow your business.  

Related Questions

What are the stages of a sales funnel

We divide the sales funnel into four main stages. These stages are:

  1. Awareness, when a stranger becomes aware of you and is converted to a lead.

  2. Engagement, when you converse with a lead so that you can qualify them and they can qualify you.

  3. Conversation, the sales process, where you convert qualified leads to customers.

  4. Advocacy, customers make referrals on your behalf.

Some marketers divide the funnel further, with stages between engagement and conversion and perhaps multiple stages of conversation, starting with smaller products and moving up to larger sales.

What is sales funnel copywriting

Copywriting is writing that engages prospects to get them to take action. The target and writing varies by each stage of the funnel. At the top of the funnel, awareness, copywriting should inspire people to takes some small action, such as sharing their contact details. Later in the funnel copywriting should inspire them to take more meaningful actions such as make a purchase. So sales funnel copywriting is writing tuned to each stage of the funnel.

Interested in how you can communicate better throughout your funnel? Download our guide here.

BusinessJeff LoehrComment