The 4 stages of a sales funnel whiteboard example

There are 4 essential stages of a profitable sales funnel (aka ‘sales pipeline’) that are applicable to literally any business model in the world, online and offline.  The ultimate purpose of the funnel is to convert new traffic into sales and in this post I’m going to go over in detail how each of the 4 sales funnel stages works to maximizing your profits.

First of all the goal isn’t just to convert leads into customers… But to do it a profit, and as much profit as possible.  This is called customer value optimization (CVO).  The purpose of CVO is to profitably advertise your products or services and achieve a ‘Value Per Lead’ that is higher than your ‘Cost Per Lead’.  And learning how to build a sales funnel using each of these 4 stages will help you do exactly that.

Let’s start from the top.

Stage 1 – Targeted Traffic Source.

I know that a lot of people reading this are going to say that the ‘traffic source’ isn’t actually part of the sales funnel, but I strongly disagree and here’s why.  9 times out of 10 every source of traffic is going to bring a different type of visitor.  The setting, the mindset, even the engagement level of the visitor will be different depending on where they’re coming from, and as such the elements that follow in your funnel should take all of this into consideration.

For example if you’re running Facebook ads, you might want the front end of your funnel to align with that and have a touch of ‘social’ in the design, possibly even acknowledge the fact that they came from Facebook before arriving on your landing page.  Likewise if you’re using YouTube in-stream ads to drive traffic, those visitors will also most likely convert better in a separate (or modified) sales funnel.

So once you’ve established a targeted source of traffic (free or paid) the next step is to create a landing page that aligns with your advertisement and the traffic source.

Stage 2 – Convert traffic into leads.

The next step in the sales process is to convert your traffic into leads which is almost always done via a landing page (aka lead capture page).  A landing page a page where the user can enter their contact information, usually an email address, in exchange for access to some type of special content or event.  Once you have the lead, you can warm them up with a follow-up sequence and lead them into the next stage of the funnel where you convert the lead into a sale.

You might be wondering why set up a landing page to capture leads here instead of sending traffic straight to the sales page in this part of your funnel…  There are 2 main reasons for this.

Reason #1 is because this method flat-out just converts better… You’ll always have better chances making the sale if you warm up your leads with value FIRST before you make an offer with a price tag.

Reason #2 is because now you can market to these leads at any time, even for completely separate offers.  Just because an individual doesn’t buy your first offer, doesn’t mean they won’t be interested in your next product or the next affiliate promotion you send to your list.

Once you’ve created a landing page to capture leads it’s time to send them into the next phase the selling process…

Stage 3 – Convert leads into customers.

The goal of stage 3 is to break the ice and make that first sale.

This is where the money starts rolling in and you start seeing results from your efforts, it’s time to convert your leads into customers.  Stage 3 will vary greatly depending on the type of sales funnel you’re building out and what you’re selling but the core principles of what it should accomplish remains the same.

The strategy here is to put your leads through an automated system, usually a follow-up sequence that warms up your prospects via a series of value based emails before asking for the sale.

Like I mentioned before, the exact methods used here will differ depending on the type of funnel you’re setting up but the goal here still remains the same… To make that first sale.

Once you make your first sale, your new customers head into the last step of your sales process.

Stage 4 – Upsells and downsells.

Also known as the ‘backend’, upsells and downsells are the bread and butter behind the sales funnels of all the most successful online and offline businesses in the world.  Once you’ve broken the ice and made that first sale (usually a low-ticket offer) it’s time to maximize your profits with upsells and downsells.

Upsells and downsells are additional offers that are usually made to a new customer immediately after making a purchase.  These offers can include anything from upgrades to the core product, additional related products, monthly memberships, high-ticket coaching and even affiliate offers.

This will also vary depending on what it is that you’re selling and how you’re selling it, but the most important thing to understand is that your backend is most likely where you’ll make most of your total revenue.

While a front-end offer might have a conversion rate of 5-10% after being warmed up in a solid follow up sequence, it’s not uncommon for upsells to convert anywhere from 25%-50% consistently.  Those are some serious numbers to think about!

Here’s a sales funnel template I wrote up to give you an idea of what this whole process might actually look like:

sales funnel template example


Here’s the breakdown of that template:

Stage 1 is the traffic source, stage 2 is the lead capture (bait), stage 3 is the lead conversion (low-ticket offer), and stage 4 would be the main and high ticket offers at the bottom.  Once your customers have made it through your entire sales funnel you can send them into the next one!

I hope all of that makes sense and that you got boatloads of value from this post on sales funnel stages and selling processes.

Want to learn (the easy way) what converts in a sales funnel and what doesn’t?

Read my previous post about Russell Brunson’s free book “108 Proven Split Test Winners.”

Adam Roy -
Adam Roy -

Adam Roy is the Founder and CEO of Remote Marketer.

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