SaaS Sales Funnel: How to Guide Users Through the 4 Stages

The SaaS sales funnel helps your sales team know how to convert quality leads and retain loyal customers. Here’s how to approach the four stages of this process.

Daniel Ternyak
January 29, 2023

If your SaaS company is winning new customers solely because of emails or social media ads, consider yourself lucky — especially if you're doing high-ticket sales. The average sale takes 7-10 touchpoints to achieve. To make sure your leads don't drop off before the final push, you need to guide customers through your SaaS sales funnel from start to end.

Let’s dive into the stages of a typical SaaS sales funnel and how you can effectively use this process to drive conversions.

How Can a Sales Funnel Benefit My SaaS Business?

In a competitive landscape like the SaaS industry, a sales funnel can give you an edge by driving potential customers toward a successful close. Your sales funnel is a strategic process, which means you’re eliminating much of the guesswork in your sales and marketing efforts.

When quality leads enter your funnel, you'll know the steps your internal sales process needs to take to avoid churn. As you optimize your funnel over time, you'll have a system in place that works like a well-oiled machine. This can mean a more streamlined and effective process, allowing for greater profit margins over time.

The 4 Stages of the SaaS Sales Funnel

A sales funnel can look different depending on the industry you're in. For SaaS businesses, an ideal funnel allows you to focus your resources on qualified leads — those who are most likely to move past your free trial, demo, or freemium SaaS product and become paying users. 

This four-stage process can help you build an effective SaaS sales funnel for your business.

1. Awareness

SaaS sales funnel: Woman typing on her laptop

At the top of the funnel is the awareness stage, in which your target audience first recognizes a need and starts looking for solutions. At this point, they're looking for solutions, not for your specific brand — for example, instead of searching for Instacart, they’re looking for ways to get groceries conveniently. But with the help of your marketing team, you can provide the answers your audience needs while putting a spotlight on your SaaS product.

When potential customers are in the awareness stage, your goal is to get them to provide their contact information. You also want to be able to further introduce them to your brand and software. By the end of this stage, lead generation occurs.

A content marketing strategy can work well in this stage. Consider using these tactics to drive your prospects to the next stage:

  • Search engine optimization (SEO): Create high-quality blog posts or landing pages that answer your audience’s questions and target keywords your leads are searching for. You can weave in information about your brand and include a call to action (CTA) or form for users to input their contact information.
  • Lead magnets: Offer an educational webinar, free trial, whitepaper, e-book, or printable checklist in exchange for providing an email address. This can help you show off your brand’s expertise. Lead magnets are often offered on landing pages and promoted through other marketing channels.
  • Social media marketing: Create helpful social media content (or attractive paid ads) with CTAs. This is an opportunity to show users what your brand can help with, while driving them toward conversion-friendly web pages.

The SaaS marketing strategies you use in the awareness stage should always offer value that directly addresses your audience’s pain points or goals. This helps you increase signups for free trials, newsletters, and other complimentary offerings from people who are actually in need of your SaaS product.

2. Consideration

The prospects who make it to this stage should be fairly high-quality leads. By engaging with them in stage 1, you have their attention. Now, you need to keep them engaged by giving them more reasons to buy.

Many brands use email campaigns at this stage of the SaaS sales funnel. Here’s how to encourage your email subscribers to continue engaging with your product, if you offer a free trial or freemium pricing plan, or with your website:

  • Introduce them to new features to try
  • Link to blog posts or landing pages
  • Link to a video tutorial of your software

Make sure to use an email automation software like ConvertKit or ActiveCampaign to reduce your customer acquisition costs (CACs).

Offering social proof is another great way to make your leads serious about buying from you. This can come in the form of testimonials or reviews, which consumers trust as much as personal recommendations. Similarly, case studies that prove your SaaS solution's effectiveness can be highly persuasive.

3. Purchase

When leads enter this part of the SaaS sales funnel, they have a strong intent to buy. Stage 2 has positioned you as a reliable solution that users trust. You're at the top of their list. They want to do a final evaluation of your product to make sure it's up to par with their needs.

Naturally, leads are highly qualified at this stage. It's worth your time to make direct, one-on-one contact with them. Your sales reps can encourage these leads to jump on a phone call for a quote or schedule a video meeting for a demo or consultation.

Or, to make this touchpoint as convenient as possible for your leads, you can direct prospects to a live chat pop-up on your site. With ServiceBell, website visitors can request to chat with your sales reps in real time. All they need to do is tap on a widget to send you a notification, and you can instantly jump on a live video call. It offers a high-touch experience — one that’s personal and custom-fit to the shopper’s needs — with much greater convenience.

All your interactions in the purchase stage must be highly personalized to work. Human interaction will create a stronger connection with your brand and is often the final push SaaS shoppers need to buy.

At the end of this stage, the first purchase occurs.

4. Customer Retention

SaaS sales funnel: Smiling man talking in front of his laptop

Great — you've achieved a sale! But new customers aren't loyal customers yet. When you gain their loyalty, they’ll spend up to 31% more with your brand. Your new users may treat the first month like an extended free trial or a test run of your premium features. 

To maximize customer lifetime value, or the total revenue you expect to make from your entire relationship with your customer, you need to keep them engaged and satisfied with your software.

An onboarding process is also critical here. Customers may drop off after the first month because they're not getting value from your product or, sometimes, simply because they're confused. You might consider:

Sales reps should consistently check in via email or phone to answer questions, offer suggestions, and simply make sure customers are happy. If you can provide a dedicated support agent, all the better. This can even re-engage users who stop interacting with your onboarding process or your software.

As your customers get closer to deciding if they want to renew, these consistent check-ins can also help you upsell. You may learn about features your clients need and encourage them to upgrade. Or, if your buyers are monthly subscribers, they may be willing to commit to an annual plan.

3 Tips for Designing Your SaaS Sales Funnel

As you start building your company's unique sales funnel and internal sales process, these tips can help you maximize your conversion rate:

1. Know Your Target Audience

Before you carve out the details of your SaaS sales funnel, make sure you're clear on who your ideal customers are. This will help you prioritize quality leads and select the digital marketing or sales tactics that work best.

Creating client personas can help. Build 2-10 profiles that represent different segments of your target audience. Identify their demographics, values, pain points, and more details that can help you understand their customer journey and their needs.

2. Track Key Metrics

When you start driving customers through your SaaS sales funnel, you need to make sure your efforts are working as intended. Identify a few key performance indicators (KPIs) for each stage of the sales funnel and track them weekly. For example, in the purchase stage, you might track your demo conversion rate.

3. Optimize Monthly

Reviewing trends in your KPIs at least once a month can help you understand what's working and what's not. Based on the trends you see, you can identify opportunities to improve your sales funnel, so you can increase conversions.

Build a SaaS Sales Funnel That Converts

Whether you have an established brand or a new SaaS startup, a sales funnel allows you to effectively drive potential customers toward a purchase. It reduces your time spent on low-quality leads and maximizes your conversion rates. And once the first purchase is complete, your sales funnel can help with customer retention.

See for yourself how ServiceBell can help you in the purchase and customer retention stages by signing up for a free plan today.