A Beginner's Guide to SaaS Sales Funnels

What is a SaaS Sales Funnel?

A sales funnel is a map of the customer journey, mapping out your customer's steps to go from site visitor to paying customer. For most SaaS companies, your sales funnel is primarily digital and automated. Strong funnels strengthen the customer relationship, introduce your product, and guide the customer through the buying journey. Here is an example of a funnel - a lead visits your website from Google, signs up for your newsletter in exchange for a PDF guide. A few weeks later, they open your emails and decide to start a free trial. A sequenced onboarding email convinces them to upgrade to paid.

You can personalize the messaging at each step based on the customer's position in the funnel. This segmentation helps you speak to customers individually instead of sharing the same message with everyone.

Why Is a Sales Funnel Important for SaaS Companies?

As a SaaS business, you need to pay close attention to your customer acquisition costs (CAC). You can spend on growth, but it'll become unsustainable if your CAC is high. A well-oiled and automated sales funnel lets you acquire customers at scale.

1. You can pump more into ads, create more content, finetune your onboarding emails and improve conversions.
2. Since the funnel is self-serve, it is not dependent on people. You don't have to worry about each sales rep being as effective since a good chunk is automated.
3. A sales funnel helps you passively engage customers till they're ready to buy.
4. A SaaS sales funnel focuses on conversions to paid customers as the primary metric. It helps you understand where customers drop off and where you need to invest. This ensures that your vanity metrics like traffic, engagement, etc ultimately actually lead to revenue.
   

What Are the Stages of a SaaS Funnel? 

Most sales funnels loosely follow the AIDA framework: Attention, Interest, Desire, and Action.

Awareness - inform your leads that you exist

Interest - capture the subset of interested leads

Desire - make your leads want your software

Action - make your leads buy your product

Every SaaS company applies this framework in a different way depending on their audience. Companies may add or remove stages depending on what's right for them. It looks very different when selling to SMB vs enterprise, health care practices vs tech companies, marketers vs accountants.

If we zoom out, we can generalize this framework and divide the funnel into three stages - top, middle, and bottom.

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Top of Funnel

The top of funnel builds awareness for your company. The goal at this stage is to attract an audience interested in the general problem area your software solves. You achieve this with:

• paid ads to landing pages
• interactive product experiences on social channel or web
• educational blog posts
• YouTube videos
• podcasts
• lead magnets like eBooks and reports

You're educating newcomers and encouraging them to stay in touch with you at this stage. A lead "advances" to the next stage if they engage with you and give you permission to contact them - signing up for your newsletter, product updates, setting up a free account. You want to measure and improve the conversion rate from site visitor to email signup.

Middle of Funnel

At this stage, your lead wants to listen to you, learn from you, maybe even try your product out. They're giving you a signal that they're actively in the market for a solution or will be soon.

However, you’re not the only player in the market. They're likely evaluating other solutions - using other SaaS products, agencies, building it themselves. The content you send them changes. You don’t have to tell them why they need a solution like yours. You need to convince them that your product is the best option for them using:

• product demos - interactive, video or live
• slide decks
• webinars
• product comparisons
• case studies & white papers

Qualify your leads at this stage and decide which ones are worth pursuing. A small company buys your product in a very different manner from a large enterprise. If you can tailor your messaging and provide a compelling argument, you can move your lead to the final stage.

Bottom of Funnel

You’ve built awareness and demonstrated why your product is amazing. Now, it’s time for your lead to take action.

The bottom of your funnel invites leads to make a decision. You address objections, highlight the quality of your offering, discuss pricing, showcase other successful customers, and give them personal product demos to champion internally. You'll need:

• a pricing page
• ready to share product-demos
• testimonials & reviews
• amazing onboarding and upsells for free products

At each stage of your funnel, you can measure the conversion from one step to the next. Reviewing this data helps you make better decisions on which stage you need to invest in to ultimately convert a lead to a paying customer.

Conclusion

A SaaS sales funnel helps you acquire customers at scale in a largely automated fashion. You can attract hundreds of thousands of visitors, nurture relationships with tens of thousands of people simultaneously, and convert a good portion of them into customers. Your marketing team is responsible for moving users to the bottom of the funnel, and your sales function is responsible for sealing the deal.

Sales funnels let you speak to customers differently. You can customize messaging according to a lead’s stage within the customer journey and provide content that answers their questions. Think carefully about setting up your sales funnel since it can drastically impact your rate and cost of customer acquisition.

If you're looking to boost your funnel, Storylane can help your marketing and sales team at various stages of funnel - through interactive product demos.