What is a Sales Funnel?

Exactly what is a Sales Funnel?

A Sales Funnel is the process by which your business attracts and converts your target market into paying customers and beyond.

A Sales Funnel is how you generate sales (revenue) in your business.

If you want to start or grow an existing business, then understanding what a Sales Funnel is and how to launch one is essential.

How Does a Sales Funnel Work?

The core idea of the Sales Funnel model is that there are certain stages that anyone must go through before they are willing and able to buy from you.

For example: Before anyone gives you their credit card, they have to know you exist.

Clearly, there are steps in between knowing you exist and entering their credit card info on your website. 

Those steps correspond to the Sales Funnel Stages.

What are the Sales Funnel Stages?

AIDA: Awareness, Interest, Desire, Action

the classic AIDA sales funnel stages model diagram dream digital marketing blog
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AIDA Sales Funnel Stages

The Classic AIDA Sales Funnel Model has the following structure:

Virtually all strategies are based on this 4-stage model. I won’t go into much detail here because we dive deeper into the stages, steps, and strategies in other modules.

Awareness Stage

At this stage, the aim is to generate awareness for your brand, product, or service.

You accomplish this by placing your marketing message in front of your target market.

An example of this is advertising, social media marketing, blog content, a podcast, etc… any medium where your target audience can consume your content.

You’re trying to reach as wide an audience as possible. The more people your marketing message draws in, the more leads and customers you’ll generate.

Generating awareness for your brand will take time.

Interest Stage

At this stage, you’re trying to determine who is interested in your brand and your offers.

An early sign of interest is traffic as visitors to your website.

The best indicator is entering their contact information on a landing page and becoming a lead.

Desire Stage

Even when your audience knows your brand exists, and they’re interested, they will still need an emotional desire to act.

Use sales copy to elicit an emotional desire from any of the human needs per Maslow’s Hierarchy of Needs:

  • Biological / Physiological
  • Safety
  • Love and Belongingness
  • Esteem
  • Cognitive
  • Aesthetic
  • Self-Actualization
  • Transcendence

Action Stage

Once your prospect is ready to take action, that’s when the sale (conversion) takes place.

This stage has expanded in the digital marketing world by including actions that take place after the sale, such as reviewing and promoting the product.

An example is someone completing the checkout process, sharing their purchase, and writing a review.

Your objective is to build a Sales Funnel that guides your customer through the stages as efficiently and pleasantly as possible.

These Classic AIDA Sales Funnel Stages are the basic and fundamental stages.

In the Sales Funnel Stages modules I expand and elaborate on each stage and how to optimize for Customer Experience, Average Order Value and Customer Lifetime Value.

The Sales Funnel Evolved

Gmail, Yahoo, Facebook, Snapchat, Instagram, LinkedIn, Twitter, Google, Bing, Podcasts, and YouTube have radically changed how we consume media and make buying decisions.

Mail has turned into Email, TV into YouTube, radio into podcasts, and local directories into Google and Yelp.

We look for reviews, recommendations from trusted sources, and comparison shop online.

As an entrepreneur, you now have access to the most powerful digital advertising, marketing, sales platforms and software the world has ever known.

Using Facebook, Twitter, Bing, Google, and LinkedIn advertising you can target your perfect customers with laser accuracy.

Using marketing automation software such as Marketo, Maropost, Salesforce, HubSpot, Eloqua, Pardot, etc… you can automate the generating, nurturing, and qualifying of prospects along the Sales Funnel Stages.

You can use webinars to close sales at a 1:Unlimited scale.

The lines between marketing and sales have been completely blurred.

The classic Sales Funnel as we knew it has evolved into an integrated digital marketing Sales Funnel.

A digital marketing Sales Funnel uses digital marketing techniques to engineer these steps.

Why do You Need a Sales Funnel?

“The purpose of business is to create a customer… Marketing and innovation produce results; all the rest are costs… Marketing is the distinguishing, unique function of the business”

Peter Drucker, Father of Modern Management Consulting

In other words, the purpose of business is to generate sales (revenue).

If you don’t have revenue, you don’t have a business.

And Sales Funnels are how you generate revenue.

This means that your Sales Funnel is the single most important part of your company.

Now, let’s take a look at how revenue is generated, measured and improved with a Sales Funnel.

Let’s keep things simple with a 4-Step Sales Funnel example.

If you know that on average:

4 step 10X sales funnel example dream digital marketing blog
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4-Step 10X Sales Funnel Example

For every 1,000 people that see your ad (impressions), you get 100 Leads…

For every 100 Leads, you get 10 Cart Checkouts…

For every 10 Cart Checkouts, you get 1 Sale  @ $1,000…

This means that if you want to 10X your revenue, then you need 10X more people to see your ad.


10,000 Ad Impressions > 1,000 Opt-Ins > 100 Cart Checkouts > 10 Sales @ $1,000 = $10,000!

When you launch a Sales Funnel…

You’re launching a predictable step-by-step process for generating revenue. 

This means that you’re in control of your revenue, and when you control your revenue, you control your business growth.

So if you want more control over the growth of your company, then launching a digital marketing Sales Funnel is essential for your business.


In this article, I answered the questions: 

  • What is a Sales Funnel?
  • How Has the Sales Funnel Evolved?
  • How Does a Sales Funnel Work?
  • What are the Sales Funnel Stages?
  • Why do You Need a Sales Funnel?

In today’s hyper-competitive market environment, it’s essential to have a clear online sales process that takes strangers and converts them into customers predictably.

If you want to launch a Sales Funnel that generates leads and sales for you on auto-pilot 24/7, grab your free Sales Funnel resources to get started!