How to Build a Sales Funnel That Converts: A Step-by-Step Guide for SaaS Founders
Craft a high-converting SaaS funnel
Most founders build SaaS funnels backward.
They study what $100M companies do today, copy their strategies, and wonder why conversion rates stay flat.
What those companies do now isn't what got them there.
The real key to any marketing is not doing what others do. It’s knowing your customer.
So, let's break down how to build a funnel that actually converts by starting with the foundation: understanding your customer deeply.
The Foundation: Customer Understanding
You need to know who you're serving, the emotional words they use when describing the problem, how they want their problem solved, and how they talk about all of it.
Start with the customers you have.
Don't have any? Start with your target market - find the Facebook group, sub-Reddit, Twitter community, or other places they frequent.
Customer Research Done Right
Read “The Mom Test” by Rob Fitzgerald to understand how to frame your questions without your ego, and why that's so important. Then use Katelyn Bourgoin's Clarity Calls Cheatsheet to get practical examples of questions to ask.
You need to understand (1) their current state (prior to buying your product), (2) their desired state (after they use it) (3) the emotions involved in triggering buying decisions (4) the catalysts that drive purchase decisions.
This knowledge will tell you:
What to say (emotional conversion words)
Where to say it (distribution channels and watering holes they frequent)
Who to say it to (and who to listen to)
How to say it (current → desired state)
When to say it (the catalyst for buying)
Building Your Funnel
Once you understand your customer deeply, your funnel naturally falls into place.
Here's how to structure it:
1. Top of Funnel: Content That Converts
Your content should focus on where your customers already are.
Based on successful SaaS companies, your early customer acquisition will likely come from:
Direct outreach (40% of early customers)
Content marketing (35%)
Beta and launch lists like Product Hunt & their competitors (25%)
As you grow to 500+ customers, this starts to shift to something more like:
Organic search & partnerships (45%)
Referral program (30%)
Paid acquisition (25%)
2. Middle of Funnel: Nurturing Strategy
Go to where your prospects live/congregate, or better yet, partner with those who already have your customers as their audience.
Speak to them using their own words.
Your messaging should consistently demonstrate your understanding of their current state, a clear path to their desired state, and evidence you can help them get there.
3. Bottom of Funnel: Conversion Optimization
Focus on three core metrics:
1) Time to first value (get this as low as possible)
2) Core feature adoption rate
3) Customer success metrics specific to your product
That’s it.
So, what do I do now?
Take these steps today:
Start a relationship with your target market (either your best customers today or even someone else’s customers in your space)
Ask them open-ended questions about their buying behavior and what they do and where they do it online.
Document their exact words and look for patterns.
Use their language in your marketing all throughout their buying journey.
Remember: Tactics without empathy won't save you. Knowing your customer will tell you exactly what to do next.
Now stop reading and talk to a customer. Or, if you’re a founder who needs help figuring out your ideal customer profile and walking through this process in more detail, I’m here for you… Get in touch.