How to Build a SaaS Sales Funnel That Converts

With the majority of the marketing a SaaS business does being digital, an effective sales funnel is crucial for success.

Why is this important?

A SaaS sales funnel drives customer acquisition, retention, and overall revenue. The more customers you bring in, the more likely you are to move them through your sales pipelines, turning them from potential customers into loyal advocates of your products and services. 

So, what is the process of building and optimizing SaaS funnels for maximum performance? 

This guide covers all the steps, from attracting leads to converting them into loyal customers. It’s packed with helpful insights to supercharge your strategies and drive growth.

Let's get started!

What We'll Cover:

What is a SaaS Sales Funnel?

A SaaS sales funnel is like a roadmap, showing how prospective customers discover and start using a product and explaining each step from entry until they become paying customers. Put another way, it's the SaaS customer journey.

It's a crucial part of a SaaS marketing plan, focusing on acquiring, retaining, and generating customer revenue. 

Unlike traditional sales processes, the SaaS funnel prioritizes ongoing relationships with customers. It involves different stages: 

• Awareness
• Consideration
• Trial
• Conversion
• Retention

The goal is to keep users satisfied and engaged over time so they keep using the product and spending money on it.

The key to this is ensuring each user gets a personalized experience, making it easy for them to get started with the product, and constantly delivering value to them. SaaS sales funnels ensure customers are happy for the long haul, so they become brand advocates.

Exploring Effective SaaS Sales Funnel Frameworks

When it comes to SaaS funnels, exploring and using effective frameworks is essential. There are a few popular models, including;

• The Pirate Sales Funnel: Inspired by the AARRR model: Acquisition, Activation, Retention, Revenue, and Referral.
• The Bowtie Funnel: Much like the shape of a bowtie, this is a continuous closed-loop that works to deliver value and impact at every point of the funnel. It focuses on the customer relationship pre- and post-purchase to optimize the acquisition and retention process.
  
• The Bullseye Framework: This framework takes the visual of a target. The outer ring represents all the possible growth or traction channels, the middle ring represents the process of whittling down the options, and the centre is the bullseye, which is exactly where you want customers to be.

These stages help businesses identify their best-performing aspects and areas for improvement. They help reframe the focus on attracting customers and where to put efforts for the best results.

By studying these methods, SaaS businesses can improve their ability to attract, engage, and keep customers, leading to sustained growth and increased profitability.

What are the SaaS Funnel Stages?

The funnel stages of the SaaS sales process help take a potential customer through a journey, from awareness all the way to becoming a paying user. Optimized sales funnels significantly impact SaaS business growth by enhancing conversion rates. It's crucial to understand the four stages used to create a typical sales funnel: 

1. Awareness
2. Interest
3. Decision 
4. Action

The sales funnel is also referred to as SaaS demand gen, or demand generation. It attracts and engages prospects, fueling the selling process. To ensure steady growth for SaaS companies, they work to enhance every part of the customer journey.

First, they raise awareness about their product. Then, they spark interest in potential customers. Next, they persuade them to choose their product. Finally, they encourage them to take action and make a purchase. 

Mastering each stage ensures a smooth customer journey, leading to increased sales and success.

1. Awareness (Top of Funnel)

The top of the marketing funnel is the entry point for potential users and likely the initial contact you will have with them. This stage concerns brand awareness and making your SaaS company seen among the competition.

Several strategies are effective at boosting awareness:

• Utilize Content: Content marketing, such as blogs, videos, and social media posts, can offer various uses, including solutions to pain points, interesting takes, how-to guides, and more.
• Engage in SEO practices: You need to develop a strong SEO plan (both off-page and on-page) to optimize your content and website to improve its visibility in search engines.
• Leverage Email Marketing: Email campaigns are a great way to reach a wider audience. You can use them for cold outreach or to share behind-the-scenes looks, news roundups or actionable insights.
• Influencer Marketing: Collaborating with influencers is a great way to expand your reach. By tapping into your niche's established audiences of creators and influencers, you can appeal to potential customers who already show interest.
• SaaS Industry Events: Participating in SaaS events and webinars is a great way to showcase your product and network with like-minded people and potential customers.
• Free Trials and Demos: It's one thing to say your product is excellent; it's another to let potential customers experience it for themselves. Use free trials and demos to introduce potential customers to your SaaS solutions. 

These strategies aim to raise visibility among potential target customers and get them into the start of the sales funnel.

2. Engagement (Middle of Funnel)

After you've captured potential users' interest and placed them in your SaaS sales funnel, the next step is to keep them engaged and nurture their interest.

There are many great ways to engage prospects:

• Tailored Content: If your broader content strategy piqued their interest, you can now provide more valuable content tailored to their needs. A big part of this strategy is understanding your target audience and their pain points; the more you know, the more you can tailor this content.
• Personalized Email Communication: More generic email campaigns can attract an audience, but it's essential to use personalized email sequences once they are in the funnel.
• Share Proof of Success: Provide case studies or testimonials showcasing successful use cases of your product or stories of customers' wins using it.
• Use Retargeted Ads: Stay top-of-mind by using retargeting ads. These ads allow businesses to show ads to users who have previously visited their website, generally through email, social media, paid search, and display.
• Use Chatbots: When potential customers browse your website or read your content, they may have questions or need support. This can be challenging to implement, especially when these customers still need to pay. Instead, use chatbots for real-time support and assistance. 

These methods nurture prospects' interest and encourage them to move forward in the buying journey.

3. Exploration (Middle of Funnel)

As potential users move deeper into the funnel, they explore the possibility of becoming paying customers. At this stage, your strategy must double down on ensuring all customer interactions sell your unique value proposition.

You can do this using the following strategies:  

• Lead With Value: Showcase your product's values and features by offering detailed demos and trials or developing a freemium version of your service.
• Product Tours: You can provide interactive product tours to demonstrate functionality and show potential clients or buyers how the SaaS product solves pain points.
• Testimonials: Share success stories or case studies to illustrate real-world usage
• Keep Providing Free Value: Offer educational resources like tutorials or guides, as they help build your authority and reputation.
• Use Email Marketing: Use email campaigns to communicate product updates and enhancements, and remember to make them as personalized as possible.  

These approaches showcase why the product is valuable and what it can do for potential and existing customers.

4. Conversion (Bottom of Funnel)

The ultimate goal of a SaaS sales funnel is conversion – all marketing and sales efforts are geared toward turning qualified leads into paying customers. Paying customers is the only way a SaaS business can grow monthly recurring revenue. 

 You can achieve this by deploying several methods:

• Discounts and Promotions: Convert leads into customers by offering limited-time discounts or promotions.
• Offer Flexible Pricing Options: Provide transparent pricing, tiered pricing plans and easy payment options to maximize the user's convenience.
• Get Personal: Address any concerns with personalized follow-up emails or calls; this personal touch can make a big difference.
• Incentivize the User: Offer incentives such as free trial extensions or additional features to keep moving the user closer to conversion.
• Create Scarcity: To add light-touch pressure, you can implement urgency tactics like countdown timers or scarcity notifications.
• Make the Onboarding Process Easy: Provide seamless onboarding experiences to reduce friction once the prospect decides to purchase.

These conversion strategies encourage leads to decide to purchase a product.

How Do You Build Your SaaS Sales Funnel? 

Your SaaS business's growth hinges on an effective front sales team and funnel building. It's the roadmap guiding potential customers from awareness to conversion. Crafting one that works is key to driving sales and nurturing customer relationships.

Here are some guiding steps, explored in more detail below:

• Map your customer journeys: Visualize each step customers take. Optimize every stage to enhance lead acquisition, sales, and retention.

• Create compelling content: Raise visibility with engaging content. Start with blogs and progress to targeted content like comparison pages to attract ready-to-convert users.

• Promote your content: Don't let your content gather dust. Optimize for search engines and share across all available channels, including social media and video platforms.

• Optimize user onboarding: Guide users through your product. Use email sequences to welcome, educate, and reengage users who drop off.

• Track your success: Monitor metrics to understand what works. Pay special attention to activation metrics, which signal users primed for conversion.

If you want to explore SaaS funnels more, we made a video documenting the steps to building a successful converting funnel.

Top of the Funnel (TOFU)

The top of the sales and marketing funnel is where you attract and capture qualified leads. Implement targeted strategies, such as:

1. Create valuable content like blogs, videos, and social media posts to draw attention.
2. Optimize your website so it shows up more on search engines (SEO).
3. Offer lead magnets like eBooks or whitepapers in return for contact information.
4. Utilize targeted advertising on platforms where your audience is active.
5. Engage in guest blogging or podcasting to expand your reach.
6. Host webinars or events to showcase your expertise and attract prospects.
7. Encourage referrals through referral programs or incentives.

Doing these steps well brings in and grabs potential customers, laying the groundwork for a winning sales process. 

Middle of the Funnel (MOFU)

As people move further down the funnel, your main goal becomes nurturing leads and helping them convert. 

1. Provide personalized content that suits their interests and pain points.
2. Engage in email drip campaigns to maintain consistent communication.
3. Offer valuable resources such as case studies, webinars, or product demos.
4. Use retargeting ads to stay top-of-mind after initial interactions.
5. Implement lead scoring to prioritize high-quality leads for further engagement.
6. Utilize marketing automation to streamline and personalize the nurturing process.
7. Offer exclusive promotions or discounts to incentivize conversions.

These strategies help to grow leads by earning their trust and gently leading them to buy.  

Bottom of the Funnel (BOFU)

The bottom of the funnel is where the conversion magic happens. Consider these tactics to convert leads into paying customers:

1. Offer transparent pricing and clear product information to alleviate concerns.
2. Provide personalized demos or free trials to showcase value proposition and functionality.
3. Use testimonials or case studies to earn credibility and trust.
4. Implement easy and secure payment options for a seamless purchasing experience.
5. Utilize limited-time offers or discounts to create urgency.
6. Provide excellent customer support to address any final questions or objections.
7. Smooth out the checkout process to minimize friction and encourage completion.

Using these tactics, you can smoothly lead potential customers to the end of the sales process and turn them into paying clients. 

Target Audience and Key Metrics

Define the target audience as the specific group of people most likely to benefit from and purchase your product or SaaS services. Key performance indicators and metrics for effective sales funnel measurement include:

• Traffic: Measure the volume of visitors to your website or landing pages.
• Leads: Track the number of potential customers who have shown interest.
• Conversion Rate: Compute the percentage of leads that become customers.
• Customer Acquisition Cost (CAC): Determine the cost of acquiring new customers and how this can be optimized.
• Customer Lifetime Value (CLV): Assess the total revenue expected from customers over their lifetime.
• Customer Satisfaction Score: This score, collected through customer surveys, measures how satisfied customers are with a company's products, services, or experiences.

Understand who you're trying to reach and monitor essential metrics. This will ensure you're getting satisfied customers and growing your business sustainably.

Setting Goals

Having clear goals is crucial to creating a successful sales funnel. Follow these steps to make your goals SMART:

• Specific: Set a clear target. Rather than simply aiming to "grow sales," specify the exact growth rate you're aiming for.
• Measurable: Keep track of your progress. Use numbers or percentages to quantify your goals.
• Achievable: Set goals that are possible for you to accomplish with what you have and what you can do.
• Relevant: Check that your goals match your overall business objectives and contribute to your success.
• Time-bound: Set deadlines for when you want to achieve your goals. This adds a sense of urgency, which keeps you focused.

By setting SMART goals, you'll have a clear roadmap to follow and improve your sales funnel effectively.

SaaS Sales Funnels Best Practices

Creating a successful SaaS sales funnel involves several key steps:

1. Website design: Craft a website that's easy to navigate and showcases the advantages of your product. Simplify the process so visitors can grasp what you offer and how it can benefit them.
2. Streamlined onboarding: Make signing up and getting started with your SaaS product as easy as possible. Guide users through initial setup steps with clear instructions and intuitive interfaces. Offer helpful tooltips or tutorials to assist users along the way. 
3. Building relationships: Communicate regularly with customers through emails, in-app messages, or newsletters. Provide valuable content such as tips, case studies, or updates to keep them engaged and satisfied. Offer timely assistance for any customer questions or concerns.
4. Measuring Results: Track key metrics like traffic, leads, conversion rates and customer satisfaction scores to see what parts of your sales funnel are working and what areas need tweaking to maximize effectiveness.

Focus on these areas to improve user experience within your sales funnel. Eventually, it will increase conversions and build long-term customer bonds. 

These practices help build trust and loyalty, leading to higher customer retention and advocacy for your SaaS product. 

Elevate Your Sales Funnel For SaaS

Optimized sales funnels are crucial for SaaS businesses. Guiding new customers through the customer journey – from awareness to conversion – drives growth and revenue.

By optimizing your SaaS marketing funnel and SaaS sales funnel metrics, you can attract leads, nurture them, and convert them into paying customers, improving potential customer retention. conversions, and profitability. 

If you need more information or want help implementing a sales funnel, contact us at MADX. Our blog also offers a wealth of insights.