What is a sales funnel and why do I need one?

Whether you’re just starting out or have had your eCommerce business for a while, you’ve no doubt come across marketing experts using the term ‘sales funnel.’  

Understanding what one is, and how it applies to your business really can mean the difference between a good year and a great year.  

In this blog, I’m going to debunk the jargon around sales funnels and explain why it’s crucial you understand how to apply them to your business.

What is a sales funnel?

Simply put, a sales funnel is the process a potential customer goes through from first discovering your brand to making a purchase.

Those steps could include discovering you, researching you, growing to like you, trusting you, buying from you and – the step most people forget – recommending you to their friends and family and buying from you again!

Understanding the process means you can create content and digital ads which speak to your customers in exactly the right way, at exactly the right time.

Sales funnel stages

Let’s look at the different stages of a sales funnel.

  • Top of Funnel (TOF/ TOFL)

Known as your cold audience, TOF activity is about making complete strangers aware of your business. The goal is to arouse interest in your product or service and intrigue them to find out more. 

Customers might have come across you through a targeted ad on social media or through searching for a solution to a problem on Google. 

graphic showing the four stages of a sales funnel, Top of Funnel, Middle of funnel, Bottom of funnel and repeat sales.
  • Middle of Funnel (MOF/ MOFL) 

Known as a warm audience, the middle of the sales funnel represents people who’ve heard of your brand but haven’t bought from you yet. They may have followed you on social media or visited your website. 

Your mission with this audience is to keep your brand front of mind while you build trust and educate them about your products or services.

  • Bottom of Funnel (BOF/ BOFL)

No surprises – this audience is HOT! The bottom of the funnel is where sales are actively taking place. Customers are purchasing your products and signing up for your services.

By now they’ve done all their research and have decided you offer the solution they’re looking for. 

  • Repeat sales 

Jackpot! These are your happy customers. The ones who come back time and time again. And who give rave reviews to their friends and family and in online forums.

This is an important section of your audience, especially when you consider the Pareto Principle which suggests 80% of sales comes from 20% of your customers.  

How to create a sales funnel

There’s no silver bullet when it comes to creating a sales funnel because every business is different.

If your products are priced under £50/$50 you may be lucky enough that people will see your ads for the first time and buy straight away.

However, if your products cost more than £50/$50, people often need a bit of time to think about it. This is known as a considered purchase or the consideration period.

Potential customers will probably want to do some research. They’ll compare you to competitors, will visit your website and maybe even join your mailing list.  

When people don’t buy from you straight away, it’s important to continue to nurture them. Think about how you’ll build trust and stay memorable so that you’re the first brand they think of when they’re ready to buy.

Facebook sales funnels

Understanding your funnel will help you with your ad strategy too.  

Facebook only records sales up to seven days after someone has clicked on your ad.  

If you sell products over £50, your customer may wait until someone’s birthday or their holiday or the summer/ winter to make their purchase. 

In this case, Facebook Ads Manager wouldn’t track that this sale has come from your ads, even though it has.

The sales funnel also explains why retargeting your ads is so important  – and why lots of advertisers lose money. If you only run ads to your cold audience you won’t be capturing all the people that could buy from you.

Understanding buying behaviour

It’s really important to understand the buying behaviour of your customers so you can budget accordingly.  

If you’re selling £5,000 garden furniture, you’ll need to invest more in advertising to build trust with your customers. A £20 a day budget will not be enough to win business.  

However, eye-catching resin jewellery priced at £45 could sell really well for a daily budget of £20.

Here’s how each ad strategy might look:

Garden furniture: Average order value: £5000

Top of Funnel

Engagement campaign using creative that’s performed well organically. Running an engagement campaign will collect data allowing you to retarget audiences. This is important in the post-iOS14 world since we can’t always track who’s visited our website.

Top of Funnel

Conversion campaign targeting a cold audience. Test videos and static creatives with educational or aspirational copy (influencer imagery could work well here).

Middle of Funnel

Conversion campaign to a warm audience. Show PR mentions and reviews to build trust. Use a different creative to the other campaigns to keep things fresh. Target people that have engaged on social media and website visitors.

Bottom of Funnel

Retarget people that added to cart or viewed certain product pages with dynamic ads showing the products they were interested in.

Resin jewellery: Average order value £45

Top of Funnel

Conversion campaign targeting broad interest audiences with different creatives.

Middle of Funnel

Retarget people who have engaged on social media, watched your videos, joined your mailing list and visited your website.

Bottom of Funnel

Use dynamic ads to retarget abandoned cart customers and customers who have viewed certain product pages. (NB: If you are a small business without much data, you may not generate sales with dynamic retargeting ads. Try them for a couple of weeks and switch off if you see no sales generated.

Ideally, you’ll run ads to your cold audience and have a separate campaign retargeting your warm and hot audiences. This means you’ll need to have enough budget to distribute between different stages of your sales funnel.


A sales funnel is the process a potential customer goes through from discovering your brand to becoming a loyal customer.

Each business will have a unique sales funnel and understanding yours means you’ll be able to effectively communicate with your customers at whatever stage of the buying journey they’re at.

Not sure which campaign structure is best for your ad campaign? Book my 60-minute Facebook Ads Clinic and we’ll build a campaign tailored to your business.