What is a Conversion Funnel, What are the Stages, and How to Create One
The conversion funnel is a strategic part of marketing and sales, designed to better understand consumers and ensure higher conversion and sales rates.
In this article, you’ll learn how it works, its stages, common issues, and how to create your company’s funnel.
What is a Conversion Funnel?
The conversion funnel, also known as the marketing funnel, is a strategic tool to guide the consumer’s interest toward the offered solution and lead them toward closing a sale or contract.
Consumers enter the funnel at various stages, depending on their purchase maturity level, and are nurtured until they become customers of your company or brand.
What is the Difference Between a Conversion Funnel and a Sales Funnel?
While the sales and conversion funnels can be confused in daily operations, they are not the same.
Let’s explore their differences!
Generally, the sales funnel begins when a potential customer enters the sales pipeline, whether online or offline. However, remember that the potential customer only enters your sales funnel once they are already familiar with your brand, which may take some time.
This is where the conversion funnel comes into play. It focuses on building a connection with your audience, generating leads, and then guiding them through a journey with your company.
So, before the potential customer enters the sales funnel, they usually pass through the conversion or marketing funnel.
Also read: Sales Conversion: How to Increase the Most Important Metric for Your Company
What are the Stages of a Conversion Funnel?
The conversion funnel aligns with the consumer’s buying journey and encompasses the entire path from a consumer’s initial question or need to purchasing a product or hiring a service to solve it.
On this path, the consumer goes through various stages, outlined below.
Users
Users are consumers who have engaged with some online communication channel of your brand, such as a website, social media, or media channel.
A user, also called a visitor, is not yet a lead.
They only become classified as such when they provide contact information to your company.
➡️ Check this out: Sales and Marketing Chatbot: Discover the Automatic SDR for Lead Pre-Qualification
Leads
When your company gains a contact or personal data from a consumer, such as a name, email, or phone number, they are now considered a lead.
Leads make up your company’s contact base, its database.
Interested in something your brand offers — which is not always the product or service — the consumer provides these details as a form of exchange.
MQLs
MQL stands for Marketing Qualified Lead.
An MQL is a contact who meets the qualification requirements set by the marketing team.
For example, if the qualification criterion is companies with more than 25 employees, a lead who reports having 30 employees would be considered an MQL.
Typically, this lead has already received educational materials and is aware of the problem they have.
They are also beginning to understand what type of solution would be ideal to solve their problem.
However, they are not yet considering which brand options to choose to address this need.
They are not at this purchasing stage yet and therefore still need to be nurtured within the marketing strategy with materials that guide their interest and present the solution your company offers.
SQLs
An SQL is a Sales Qualified Lead.
It is the next stage after the MQL, encompassing contacts that, after being qualified by marketing, are accepted and worked on as opportunities by the sales team.
It’s important to remember that not every MQL will become an SQL, as the user may have filled in their details incorrectly (unfortunately, this is common) or because the sales qualification criteria may not align with marketing criteria.
An SQL is also a lead closer to the purchasing decision, as they have already chosen a solution your company offers.
For this reason, they are a contact that should be handled within the company’s sales strategies.
Here, the sales team steps in to start a dialogue with an audience that is ready to decide which brand they will choose to solve their problem.
Clients
If a qualified lead makes a purchase or hires a service, they become a client of your company.
The relationship between brand and consumer doesn’t stop there, and there are additional customer classification stages after the purchase.
Promoters
A satisfied client returns to buy again, which is why the post-sales relationship is so important.
Additionally, customers who admire your brand become promoters, recommending it to friends and acquaintances.
Suspect
Beyond the most common stages in a conversion funnel, there are also two additional stages: suspect and prospect.
A suspect is someone who has converted on a hook, showing interest in some content or tool created by the brand, though it’s still unknown if they have an interest in the offered solution or product.
From this initial conversion, nurturing and qualification are needed to gain more information about this type of lead.
Prospect
Prospects are contacts or leads who have shown direct interest in the offered product or service (such as by converting on a demonstration or free trial hook), though it’s still uncertain if they have the desired profile for the purchase.
What is a Conversion Point?
A conversion point includes all hooks created by the brand to move a consumer to the next stage of the conversion funnel.
For example, to turn a user into a lead, you might offer an e-book of interest.
To turn a lead into a qualified lead, you could provide more in-depth material, a tool, or a consultation.
To turn a qualified lead into a customer, an offer or sales page can serve as the conversion point.
How to Create a Conversion Funnel?
Want to create a conversion funnel for your company?
Follow these four steps:
1. Plan
To create a conversion funnel suited to your audience, you need an in-depth understanding of who comprises it, what their needs and desires are, and how these consumers behave at each stage of the sales funnel to effectively offer what will drive their conversion.
With this knowledge in hand, we can plan each stage with ideas for materials and conversion points and proceed to build the necessary funnel stages.
2. Attract
The first phase of the funnel, also known as the top, focuses on attracting visitors or users.
Here, the goal is to generate quality traffic to your website, feeding the top of the funnel with potential business opportunities.
Some strategies relevant to this stage include paid media (online ads) and inbound marketing.
In this phase, which involves learning and initial problem recognition, the visitor has minimal contact with the brand or the solution offered.
Thus, the focus should be on the visitor’s pain points and challenges, rather than on the sale itself.
For the top of the funnel, attention-grabbing, free content can be offered, such as videos, blog articles, infographics, etc.
3. Convert
In the conversion phase, the goal is to have the user provide their contact information on the site by offering something valuable in return, such as rich materials, e-books, product demonstrations, quotes, consultations, etc.
You can utilize Landing Pages, forms, and tools like chatbots to offer these materials.
In exchange, the user provides personal information like their name and email, which marks the next step in the conversion funnel: turning into a lead and beginning a relationship with the brand.
Increase Your Lead Conversion with 3 Steps Proven on 1600 Sites
4. Relate
The middle of the funnel is associated with problem recognition and solution consideration.
At this point, we are no longer dealing with visitors but with leads who have already interacted with the brand’s articles and provided their initial conversion details.
Here, the focus remains on the lead’s problem, but now with a more targeted approach toward the type of solution that will address it.
We should focus on the solution itself, rather than on which brand they will choose to provide it.
In this stage, the relationship between brand and lead strengthens.
It is also here that much of the lead nurturing and qualification occurs, ensuring these contacts become opportunities and reach the final funnel stage—the sales stage—already engaged.
To achieve this, utilize email marketing, automation flows, and useful tools for leads, such as in-depth articles on topics of interest, lists, and spreadsheets that can assist them.
5. Sell
At the bottom of the funnel is the purchase decision stage.
Here, the lead has understood their problem and knows how to solve it.
All that remains is deciding which brand or company they will purchase from.
In a well-constructed funnel, this is when the sales team steps in to engage these consumers who are ready to make a purchase.
Bottom-funnel offers might include free samples or trials, as well as more commercial and persuasive materials with special conditions, complete catalogs, and other perks.
Marketing can and should also create materials that will support the sales team at this stage.
What Tools to Use to Visualize the Funnel?
To monitor your digital marketing funnel strategy’s progress, it’s essential to have a clear visualization.
Here are three tools to help you track your conversion funnel progress.
1. Marketing Automation
Marketing automation tools automate your company’s processes, including the conversion funnel.
This type of software optimizes work time, especially if integrated with your site, as it automatically brings in captured leads.
Here are three of the top 19 Marketing Automation Tools of 2024.
- RD Station Marketing
- LAHAR
- ActiveCampaign
2. CRMs
Customer Relationship Management (CRM) systems manage customer relationships. They organize information, visualize data, and track the development of your sales contacts.
CRMs typically use a pipeline format, showing the exact status of each lead and client, all automatically!
Check out three of the top 11 CRM software options!
- Fleeg
- Ploomes
- RD Station CRM
3. Excel or Google Sheets
Finally, let’s discuss the tried-and-true spreadsheets.
With Excel or Google Sheets, you’ll manually add the number of leads at each stage.
In the end, you can generate a funnel-shaped chart to track your funnel size.
See the example below:
What are the Most Common Issues in a Conversion Funnel?
Even companies with a well-designed conversion funnel encounter challenges.
Here are some of the most common issues and tips on overcoming them.
1. Cold Leads
A common funnel problem is generating many leads but finding that most are cold or unqualified.
In this case, marketing actions may not be effectively nurturing, guiding, or generating interest in the offered solutions, or the audience being converted is not the ideal target.
To overcome this, understand your audience’s profile as you develop content, topics, and acquisition strategies. Define and apply qualification criteria in creating and promoting these materials, and test different hooks in automation flows.
2. Lack of Control Over Sales Stages
If your problem is at the funnel’s bottom, this is a different scenario.
Here, you might have high visitor numbers, satisfactory conversion rates, qualified leads and opportunities…
But the sales team can’t close deals.
This may indicate a lack of control over sales stages, which can be analyzed and resolved through lead surveys, a review of the sales process, and implementing tools that help with organization and control.
3. Ineffective Filters Throughout the Journey
Another issue companies often face is either a lack of filters or incorrect use of them.
While having a good volume of leads directed to sales is ideal, volume alone does not guarantee success.
After all, it’s no use having the sales team reach out to contacts if they are not qualified leads.
Ensure each lead is understood, nurtured, and qualified before passing them to the sales team to avoid overwhelming or frustrating your sales reps.
Also check out: What is Follow-Up and How to Approach Leads at the Right Time
How to Solve Bottlenecks?
Once the funnel is in place, conversion bottlenecks, if they exist, will become apparent.
They fall into top, middle, and bottom funnel issues.
Here are the main ones, along with solutions for each:
- Few visitors, few leads: Campaigns to attract traffic are needed. Explore attractive content, promote your Landing Pages across brand channels, and create top-funnel ads.
- Many visitors, few leads: This indicates a low conversion rate. To solve it, understand your audience’s needs and interests, provide enticing content, and replace static forms with more interactive tools.
- Many leads, few qualified leads: Review your lead qualification criteria, ensure they’re applied in the funnel, and involve the sales team in lead nurturing and qualification development.
- Many qualified leads, few sales: In this case, the sales approach and process need reviewing. Support the sales team with supplementary materials and follow-up systems for generated opportunities.
Did you recognize any of these scenarios?
Check out our post, “Is Your Marketing Funnel ‘Congested’? Discover the Most Common Issues,” for full tips on each situation.
Finally, planning the conversion funnel and executing actions, materials, and strategies accordingly will improve both marketing and sales performance.
Start structuring your funnel now and enjoy growth at every stage!
Have any questions? Leave them in the comments.
