Understanding the Sales Funnel in Digital Marketing – How does it work?

Sales funnel is one of the most fundamental concepts in digital marketing, since it carries the potential to transform your business from an unknown startup into a big leading giant. To begin, you create your sales funnel with the objective of achieving a certain goal: a consumer purchasing xyz product/service from your company. Digital marketing strategies are utilized, to fill your sales funnel with traffic and drive it from the top to the bottom, where it converts into a paying customer and becomes an advocate for your business.

Each level of the sales funnel has an effect on customer behaviour. You must have a thorough understanding of them to utilize the need according to your sales demand. A keen understanding of every level allows you to use methods that help you increase the number of people who move to the next stage. This digital marketing method has a huge impact on your business.

What is a Sales Funnel?

A sales funnel is the Digital marketing term for the journey potential customers goes through on the way to purchase. It is the series of steps that one goes through in order to become your customer. Or in other words, the sales funnel is a marketing term that describes the journey potential buyers take on their way to making a purchase. The buyer gets one step closer to making a purchase at each level of the funnel. A properly structured sales funnel will outline the steps your business must take in order to convert the prospectus into potential buyers. This buying process is described as a funnel since it begins by attracting a large number of individuals before filtering them down until only those who want to buy your product remain.

For instance – A person notices the clearance board in your store and decides to have a look. Now the customer picks some product from your store and proceeds to checkout, this is how they pass through the sales funnel. If all goes smoothly, they actually make a purchase and reach the bottom of the funnel. Every business, in one way or another, goes through the same process, be it: Retail store, sales team, business website, etc.

Your sales funnel can include any marketing channel. And it’s possible that your funnel is dispersed across multiple channels too. The funnel is used by most businesses to follow prospects as they progress through the sales cycle, this allows businesses to alter strategy and digital marketing methods in response to their customer’s actions.

Understanding the Four Stages of Sales Funnel

The four stages of the sales funnel emphasize and explain the thinking of your potential consumer. This is how it works – the prospectus would move through the four stages of the sales funnel from the moment they first become aware or learn about the product to the time they make an actual purchase or maybe not buy it. The four stages describe the attitude of a prospect, and each step necessitates a different approach to it. There are basically four stages in a sales funnel:

  • The topmost level comprises Awareness and Discovery
  • Showing interest in the business or the product is at the middle one
  • The bottom stage comprises making a buying decision
  • And the last stage is when a buyer takes an action and actually buys the product or service.

The four stages are explained below:


This is when you get a customer’s attention for the first time. It could be a tweet, a friend’s Facebook post, a Google search, or something completely else. This is how your prospect learns about your company and what you have to offer. And if all goes well, the buyer will buy your product.


When customers reach the interest stage of the sales funnel, they’re doing their homework, comparing prices, and weighing their options. This stage is where you provide important and relevant information to your customer so that they show their willingness to your product.

Be flashy but not persuasive, as you want them to buy but you can’t tell them what to do. The goal is to establish your product, help the customer in making their purchase decision, and offer your assistance.


When a customer is ready to buy, they are in the decision stage of the sales funnel. He or she may be evaluating two or three possibilities, one of which should be your business. There are many ways to lure your customers, it may be – free shipping, a discount code, or a bonus product. In digital marketing, the idea is to make your product appealing and convincing for your customers to eventually buy it.


The customer takes action at the bottom of the sales funnel. He or she buys your product or service and so joins your company’s ecosystem. However, just because a customer has reached the bottom of the funnel does not imply your job is done. Consumers and marketers must take action. You want to make every effort to maximize every purchase. To put it another way, you’re concentrating on customer retention, not just a single purchase. Thank your consumer for their purchase, ask them to give reviews, and make yourself available for tech support, if necessary.

What is the Importance of Sales Funnel in Digital Marketing?

The journey that prospects follow is depicted in your sales funnel. The first and most important benefit is that it allows you to effectively segment your marketing efforts, directing content, advertising, and other methods with messages that are relevant throughout the buyer’s journey. As a result, lead generation becomes more efficient and eases conversion difficulty.

Understanding your funnel might assist you in identifying the funnel’s gaps – the points when prospects abandon the funnel and never convert. Without a true understanding of the sales funnel, you cannot completely optimize it for your benefit. We’ll go over the details of how the funnel works later, but for now, know that you have control over how visitors progress through the funnel and whether or not they convert.

How to Create a Funnel for your business?

Creating a funnel for your organization is critical to the success of your Digital Marketing plan. The first stage is straightforward: set a goal for your digital marketing actions, such as increasing sales or increasing your company’s Return On Investment (ROI). In other words, a goal that you want to achieve and also should be attainable. The funnel must then be structured, with the steps of the sales cycle defined. It’s easy to understand and analyze what model is appropriate for your business if you create a visual depiction of the stages. After you’ve set up your funnel, it’s time to figure out how to get the traffic you need at each level. And this way you move forward in determining your conversion and sales.


The complete optimization of the sales funnel takes time. It’s a lot of labor. However, in a competitive market, it is the only way to survive. Mark it, even a minor issue in your digital marketing strategy can have an impact on the conversions. As a result, creating a sales funnel for your company is critical if you want to build increasingly precise actions and have an impact on your customers. With so many advantages of digital marketing like digitally disseminating and advertising your brand, it’s critical to understand and apply all of the concepts required to fully utilize the resources.