Skip to content

What is a Sales Funnel? The 6 stages and how to create one

The definition of a sales funnel is the journey potential buyers go through when they take an interest in a specific product or service. This journey consists of a funnel of steps that sales teams use to convert prospects into customers, also known as prospecting.

Every interaction with a customer should follow the strategic framework of your funnel.

Especially if you want to bring in more leads than goals scored by Cristiano Ronaldo for the entirety of his career.

Scroll 👇 to learn more!

Why is the sales funnel important?

You're probably thinking:

Why do I need a funnel to make a sale?

Can't I just call a prospect up and give them my pitch, and that's it?

We're afraid that sort of lead generation strategy just won't cut it.

Especially if you want to hit your numbers!

Here's why a sales funnel is important:

  • It helps you personalise your sales strategy to better match where your buyer is in their journey.
  • With understanding comes better communication, and you're better able to relate to your customers.
  • By pushing leads through a funnel, you’re building relationships resulting in easier conversions.
  • You have a better idea of what your customers need, giving you an edge over your competitors.
  • Constant communication means more opportunities for feedback, helping you improve your strategy.

But, what will ultimately bring you the most success by using a funnel for sales is asking yourself this key question:

Where are my prospects in their buyer journey?

The 6 stages of the sales funnel 

There are generally four to five steps in any given business funnel.

But one thing remains true for every funnel:

There's a bottom, middle and top.

Basic structure of a sales funnel. Including TOFU, MOFU and BOFU and how they relate to the buyer journey.

This is why you might hear many salespeople referring to ‘bottom or top of funnel’ to reflect where their prospects are in their journeys.

The better thought out your funnel is, the easier it is to make a sale.

At Cognism, we believe in going the extra mile, so our sales funnel model has 6 stages!

The 6 funnel stages are:

Stage 1: Awareness

Stage 2: Interest

Stage 3: Evaluation

Stage 4: Engagement

Stage 5: Action

Stage 6: Retention

Let’s look at them in greater detail:

Stage 1: Awareness

You can’t make a sale if your prospects don’t know who you are!

The awareness stage is where your buyer discovers who you are.

This can be achieved through word of mouth, cold calling,your company's outbound campaigns and on social media or a podcast.

It’s a good idea to get a list of your TAM ready for when you prospect at this stage. Cognism Brand Ambassador, Ryan Reisert.  says:

“Your list is your strategy. Stick to it. When it comes to your ICP or buyer personas, you want to be super tight from the get go so you’re not wasting time with churn later down the line.”

And, most importantly:

“Don't call everyone and their mom at the company. Call the person you think is the best person to talk to first.”

Stage 2: Interest

This is arguably one of the most important steps in your sales process. How you respond to a potential customer will set the tone for your relationship going forward.

When a prospect is interested in what you’re selling, they’ll fill out a form on your site, give you a call or pop you a message.

At Cognism, we’ve found that the faster you respond to these buyers, the better.

In fact, we call this strategy speed to lead.

Meaning, we want to contact a potential customer within five minutes of them requesting information.

Alice de Courcy our CMO says:

“Your goal for booking meetings should be centred around creating an amazing experience for every person your reps speak to.”

Make their experience a positive one and you’ll have no problem moving them to the next stage.

Stage 3: Evaluation

That initial call is important not only for the customer but also for B2B sales reps.

They’ll ask a couple of qualifying questions to see if your product really will be a good fit for your prospect. They’ll also try to answer every question the prospect has and steer them towards a purchasing decision.

However, if a lead isn’t right, it’s the job of the rep to let them know politely. Ryan says:

“No lead should go past your qualification stage if it doesn't meet the criteria of your next best client. Even if they came to you from an inbound lead or a referral. If they aren't in that criteria just say to them, ‘hey you know based on what I know I don't think I can help you.’ Don't take the call, don't take the meeting, just don't even waste your time there.”

This process is also called qualification.

Once a lead is qualified, they’ll likely do a bit more research to make sure your product or service will help solve their pain points.

Stage 4: Engagement

While your prospect is in the consideration stage of their buying journey, you’ll want to do whatever you can to keep your brand at the forefront of their minds.

One way to do this is through email outreach that offers them value, such as ungated whitepapers, case studies, pricing and webinar snippets. Ryan adds:

“This is where your funnel will start to thin out if you’re keeping your funnel tight and not focusing on leads that are a good fit for your company. Resources like marketing can help drive these leads to the buying stage via a nurture campaign. Be very focused on the warmer leads you know you can help, and be okay with disqualifying the ones you know don’t fit your ICP.”

Stage 5: Action

At this stage of the B2B sales funnel, your prospect has finally made their decision.

If your prospect does sign on the dotted line…

Congrats, they're now your customer!

Stage 6: Retention

Just because you’ve sealed the deal doesn't mean the funnel ends.

Not only does this type of demand marketing help you bring in more revenue, but it benefits all future funnels by feeding back to stage one with more brand awareness.

How to build a funnel for sales 

Need help creating your funnel?

We’ve put together six easy steps to help you lay the foundation:

Step 1: Look to your audience

First things first - get to know your customers. You can do this in a number of ways including:

  • Determining your ideal customer.
  • Creating a list of data points such as time spent on page, link clicks, time spent scrolling etc.
  • The content they interact with on your social accounts.

Once you can determine what interests your buyers, you can then start mapping out their buyer journeys and creating new buyer personas for future prospects. Ryan says:

“I only look at accounts who I know are the types of companies we want to be doing business with. They need to be the right size, have the right capital, the right leadership team and use the right technologies etc.”

Don’t be scared to get a little negative too. You’ll want to find out the things your customers don’t like as well.

  • Their pain points.
  • What annoys them most about other purchasing funnels.
  • What actually influences them into buying.

Step 2: Establish goals

Now you know who your clients are, what frustrates them and what they really want at every stage of the buyer journey, it’s time to establish goals.

It’s helpful to separate your funnel into top, middle and bottom for this step.

Then ask yourself:

What would you like your prospects to do at each stage?

  • Increase traffic to a specific page on your site as your top of funnel goal.
  • Increase engagement during middle of the funnel outreach
  • Double conversions at the bottom of your funnel.

Every business will be different.

Step 3: Create

Knowing your buyers and establishing your goals will help you narrow down the type of content to share at each stage.

Your content strategy should be educational, valuable and promote brand awareness.

Our top tip - take a look at what your competitors are doing…and then do it better.

PPC ads, SEO, videos and blogs are great for engagement. Prospects considering your product will appreciate case studies, how-to guides and product explainer videos.

To help retain clients, share checklists, ungated tools and whitepapers mixed with webinars, podcasts and special offers.

You can also implement a drip email campaign to ensure your buyer gets what they need at the moment they need it while building a relationship which is best practice before pushing a sale.

Step 4: Engage

Your plan of action will work in a similar way to your goals in that you should separate each strategy into BOFU, MOFU and TOFU.

Think about how you want your prospects to engage at each of these stages.

When you create engagement for the middle of the funnel, you’ll need to build trust with more of a direct approach.

But don’t just call a prospect for the sake of calling.

You’ll want to focus on sharing content via email or making calls with an educational purpose in mind, not just on meeting your MB quota.

Ryan adds:

“Your sales funnel is your opportunity pipeline and that's where most people fail. They think they want this big wide funnel filled with lots of deals, so they appear busy. It’s a bad thing.”

“When I'm going through the forecast listening to someone say they have 10, 20, 40 deals. I’m wondering why. What’s the purpose? You can’t have that many at any given time. You won't be working them in the right way, and if you are then you should probably be expanding your team because there's so much demand for what you do.” 

Step 5: Encourage action

One of the most important steps for building a successful conversion funnel is to ensure that you include a clear and purposeful call to action at the end.

Pushing for a sale too soon might annoy your buyer, while waiting too long could have them choose a competitor.

So time really is of the essence!

But, how you present the sale is equally as important.

We suggest:

  • Not having too many fields to fill in on your form.
  • Offer some free added value.
  • Include a summary of next steps.

Step 6: Communicate

Lastly, always communicate positively and professionally.

Once your prospect converts, you’ll have to retain your relationship with them; you want that to go off to as great a start as possible.

Speaking of retention, always continue your communication:

  • Check in on how they are doing.
  • See if they need help using your product or service.
  • Send them valuable content you believe will benefit them.

If they're happy, they will continue to be a customer for many years to come. They may also refer your business to everyone they know, bringing more customers into your sales funnel.

For more tips on winning SaaS sales, check out this video with advice from the best SDRs in the business 👇.


Example of a successful sales funnel (including template) 

One successful sales funnel example is Cognism client, Accountancy Cloud.

Using Cognism, they were able to build a sales pipeline and close five deals in the first six months!

To help you get started with yours, we’ve created this free sales funnel template:

Plan how you sell at every stage of your buyers' journey with this helpful sales funnel template from Cognism.

Remember to keep your funnel tight or as Ryan says:

“Don't think of it as quality over quantity, like you only have to spend time on one or two people at a time. You need quantity at the top of your funnel and then quality as they travel down it. Think of it like a nail, and be extra strict when qualifying leads to ensure only the customers you can help enter your nurtures.”

Build your funnel with Cognism 

Building a funnel for sales doesn’t have to be difficult.

Here’s how Cognism can help you build your pipeline with the most accurate data on the market:

  • Minimise manual research, admin and dialling incorrect numbers.
  • Get in early and increase your chance of winning upwards of 74%.
  • Use buyer intent data and sales trigger events to start a conversation with accounts primed to buy.

Click to book your screen share 👇

Sales is data, and data is Cognism. Click to book your screen share and start changing the way you grow your revenue.


Read similar stories


What Is a Marketing Qualified Lead (MQL)? Strategic Guide for 2022
What is a Marketing Qualified Lead and how is a SQL different? Click to read our guide and uncover everything you need to know about mastering the MQL.
Common cold call objections and how to respond
Objections are an inevitable part of cold calling; the trick is to keep the conversation going to gather more information. Read this blog to find out more.
Strategising for every stage of the customer adoption process | Cognism
The customer adoption process is a broad topic. We break it down and outline strategies to improve your customer adoption rate in this article.

Experience the Diamond difference.

See how our phone verified contact data can increase your connect rate by 7x. Book a demo today.

Skyrocket your sales

Cognism gives you access to a global database and a wealth of data points with numbers that result in a live conversation.

Find customers ready to buy

Cognism intent data helps you identify accounts actively searching for your product or service – and target key decision makers when they’re ready to buy.