Without a firm grasp of how sales funnels work, you’ll never be able to maximize the reach of your company.

It doesn’t matter if you’re selling online, in-store, direct to consumer, or B2B—every business in every industry should have a sales funnel. This guide will teach you how to build a sales funnel that converts.

What to Expect When Building a Sales Funnel

Creating a sales funnel might seem complicated, especially if you’re a beginner. But with five steps, you can simplify the entire process:

1. Understand the Sales Funnel Stages
2. Use Software to Build Your Sales Funnel
3. Create a New Sales Funnel
4. Add a Deal to the Sales Funnel
5. Move Deals Through the Sales Funnel

The Good

Sales funnels are arguably the most crucial way businesses generate leads and convert them into paying customers. Once you can implement a successful sales funnel, you’ll quickly benefit from increased revenue.

While sales funnels can be complex and time-consuming to get right, once it is locked in and doing well, it will continue to work for you in perpetuity, making it key for scaling your business. After all, to be successful, a business must make a high volume and consistent sales to grow.

Your sales funnel will keep working 24/7/365. Sales funnels are key for turning leads into customers. The better your sales funnel, the better your sales. Ultimately, a great sales funnel will be predictable, measurable, and allow for unlimited growth.

Plus, you don’t have to create every sales funnel by hand. Many great software solutions make this process much easier for you, some of which come with sales funnel templates. So, if you’re stuck, in a rush, or just don’t want to create one from scratch, you can take advantage of industry-specific templates to get you started.

If you’re using software to create and manage your sales funnel, you will typically also benefit from a visual sales pipeline. These tools provide a complete overview of your sales process, so you understand exactly how many open leads are pending and which stage of the funnel they’re in.

Most sales funnel tools are user-friendly, and you won’t need a technical background to get started. In some cases, it’s as simple as dragging and dropping a sale from one stage to another.

The Bad

While sales funnels are crucial to your company’s success, the implementation and management process comes with its fair share of challenges.

The most significant issue with sales funnels is the breakdown of communication between marketing and sales departments. Since the marketing funnels and sales funnels overlap somewhat, those two teams must be able to work together to be successful.

If the two teams are not on the same page, leads get dropped, goals are missed, and deals are lost. And in most cases, neither team will want to take the blame. It may be cliche to say they will blame each other, but it is cliche for a reason. Marketing will say that sales lost the deal, the sales team will claim the marketing department didn’t do a good job qualifying them.

Unfortunately, this is not uncommon and can lead to a hostile work environment and a breakdown of the company culture, making it even more difficult for the two teams to work together moving forward.

To keep the two departments working together and avoid the unrest, it is essential to have clearly defined roles and goals. Both teams need to fully understand what their part of the larger funnel is and how it all works together. Have the two teams meet regularly and discuss the sales process, how the funnel works, how to improve it, and share successes.

The fact is that if marketing and sales are not working together toward the common goal of closing deals and growing the business, lead and customer acquisition suffer the consequences.

It’s also worth noting that just one mistake in the sales funnel can cause a ripple effect throughout your entire sales process. Even if the end of the funnel is perfect, few prospects will get to that point if there are problems at the top of the funnel.

Step 1: Understand the Sales Funnel Stages

Before we can dive into the details related to building a sales funnel, you need to have a firm grasp of the different stages of one.

The exact names of each stage might vary slightly depending on who you ask or the graphic you look at. But generally speaking, sales funnels can be broken down into four phases:

• Prospect
• Qualified lead
• Opportunity
• Closed

Sales funnels are not the same as marketing funnels, which focus on making potential leads aware of your brand and products and then capturing them as a lead to getting their information. Once a lead is captured, the next stage is turning them into a prospect interested in purchasing from your company. This is part of the marketing funnel and overlaps with the start of a sales funnel.

Let’s take a closer look at each of these stages in greater detail below.

Prospect

When a person is a prospect, they are part of both the end of the marketing team’s part of the funnel and the beginning of the sales team’s funnel. In the prospect phase, the potential customer is now aware of your brand and has expressed some interest in learning more, including giving your company their contact information, viewing a demo, or subscribing to a newsletter.

In the prospect stage, you are continuing to nurture and educate the lead on what your company does and how your product or service will benefit them. Email marketing is a big piece of this stage and continues to educate the lead on your business.

Qualified Lead

What takes a lead from prospect to qualified is digging into and screening the lead to make sure your offerings are a good fit for them. In most cases, both sales and marketing teams will qualify leads. The marketing team is attempting to qualify the lead throughout their process so that by the time the lead gets to the sales team and into the sales funnel, only minimal qualifying is needed.

When marketing is qualifying a lead, they are looking to see if the person seems like a good fit for your company’s product of service. Do they fit the ideal customer persona?

When sales is qualifying a lead, they are digging further into the specific lead to find out their needs, pain points, timeline for purchasing, budget, decision-making ability, and more.

Opportunity

Third is the opportunity stage of a sales funnel. This is the stage at which salespeople discover what specific opportunities there are to sell a product or service to the lead. To identify opportunities for sales, the team may send them special offers, discount codes, or start a negotiation with the lead to come to an agreement.

This stage is the one where any proposals are presented, negotiations are had, and there is often a lot of back and forth between the sales agent and the lead.

Closed Deal

The final stage in any sales funnel is closing out the lead. It is important to have a Closed Deal stage, and even more important to separate the leads into “Closed-Won” or “Closed-Lost” categories. Either you won and the lead made a purchase, therefore becoming a customer, or you lost the deal and the lead did not make a purchase.

If the lead becomes closed-won, they are no longer in the sales funnel and are one of your company’s customers. You will continue your follow up and renewal strategies as normal.

If the lead is closed-lost, it doesn’t mean they will never become customers, just that they aren’t right now. You will want to stay in contact with these leads and follow up with them regularly. Offer additional deals or discounts later and keep engaging with them. Just because they chose not to make a purchase now does not mean they will not become customers at a later date. Having been through the marketing and sales funnels, the lead is fully vetted and qualified, well aware of your company and its products, and has already shown an interest in them.

Step 2: Use Software to Build Your Sales Funnel

Now that you have a firm grasp of how the sales funnel works, it’s time to leverage technology to make your life easier.

Sales funnel software comes in all different shapes and sizes. I recommend using a CRM platform with built-in sales funnel solutions instead of a standalone sales funnel tool.

A CRM (customer relationship management) system is an all-in-one solution for managing customer communication before, during, and after the sales process. So it makes sense to build your funnels on your existing platform. It also makes it easier for your sales, marketing, and customer service teams if all customer touchpoints are in one place.

Pipedrive is my favorite CRM for sales funnels. But there are many other options to consider. Check our list of the best CRM software to see the top alternatives in this category.

Signing up for Pipedrive takes less than a minute. You just need to provide your name, business email, and phone number.

Pipedrive will ask a bit more information to personalize your experience, like your industry, experience level with sales tools, and how many people will be using the software.

Best of all, Pipedrive offers a 14-day free trial and doesn’t require a credit card at sign-up—so there’s no risk to try it out.

Step 3: Create a New Sales Funnel

Creating a new sales funnel will look slightly different for everyone, depending on the software you’re using. But for the purposes of this tutorial, I’ll use Pipedrive as an example.

Navigate to the Deals Dashboard

Pipedrive gives you a default sales funnel when you first sign up. But to create your own from scratch, head to the Deals board on the left side of your menu—represented by a circled dollar sign.

Add a New Pipeline

On the Deals page, click on Pipeline at the top of the dashboard. Then select +New Pipeline from the dropdown menu.

Alternatively, you can use the Edit Pipeline option to modify the default template. But most businesses choose to start from scratch, and that is what I am showing you here.

Once you click to start a new pipeline, you can name each stage and change the order of your sales funnel. This process will look different for everyone, depending on their goals with their new sales funnel.

Step 4: Add a Deal to the Sales Funnel

Once you’ve created a new sales funnel, it’s time to put this tool to good use. Each time a new lead enters the funnel, you need to enter the information into the software.

There are ways to automate this process by connecting with third-party tools, email signups, or lead generation forms. But for now, I’ll show you how to do this manually.

Click the Plus Sign (+) on the Deals Page

There are two ways to add a new deal to the sales funnel, either by clicking the green + Deal button in the top left or by clicking the plus sign (+) underneath a specific stage in the middle of the screen.

The green button may be the obvious choice for most. But if a new deal has already advanced through the funnel, clicking plus sign (+) below that phase is a shortcut.

Enter the Deal Details

Next, populate the form with all of the details of the pending deal. Enter the lead’s name, phone number, email, business, deal size, expected closing date, and more.

Then click Save to officially put the deal into your funnel.

Step 5: Move Deals Through the Sales Funnel

Once someone is entered into the funnel, you will move them along through the funnel and sales process until they convert. Pipedrive has built-in tools to make this process easy for you.

Schedule an Activity

To make sure nobody gets lost in the shuffle, schedule an activity to follow up with leads. Just click the deal icon card and select + Schedule an Activity in the pop-up window.

Activities include things like a call, meeting, email, lunch, or another task.

Pipedrive syncs with your calendar to see all of your activities in a single source of truth without double-booking anything. Add notes and information to the activity to have a point of reference when it is time to make the call or go to the meeting.

Move Deals Through the Sales Funnel

As you complete different activities, such as follow-up emails or video calls, you’ll continue moving a deal through your sales funnel.

With Pipedrive, it’s as simple as dragging and dropping a deal card from one column to the next.

In the example above, I’m dragging a deal from the Qualified Lead column to the Contact Made column after making that hypothetical call.

As you send a proposal or finalize the contract, you’ll continue moving deals through the sales funnel until they’ve ultimately converted into a paying customer.

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