How to Build a Winning Sales Funnel for SaaS Businesses

How to Build a Winning Sales Funnel for SaaS Businesses

Trying to build a sales funnel for a SaaS business?

You’ve come to the right place!

Who better to teach you about building a sales funnel for your SaaS business than a successful SaaS business that helps its members build sales funnels?

That’s what we do at ClickFunnels!

Our software helps other businesses (some of which are SaaS) build sales funnels that propel them to success.

And so we thought we’d put this guide together and offer some advice for building winning sales funnels as a SaaS business.

Here you go!

Click below to get a free trial.

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Sales Funnel Phase 1 – the Frontend

The first phase of a SaaS sales funnel is all about collecting email addresses and getting people to try out your software.

Below are some of the main tactics that smart SaaS companies use to generate leads and attract new customers.

1. Free Trial

Free trials are one of the most common ways that SaaS companies get people to try out their software — in fact, we do that here at ClickFunnels!

Sales Funnel Phase 1 - The Frontend

But it’s not just us. According to Invesp, over 65% of SaaS companies offer a free trial.


Because it works!

Free trials help push people over the edge and get them to actually try out your software.

Plus, they serve as both an introduction to your product and a lead magnet — generate leads and get new customers all at once. They work so well that you can often drive ads directly to your free trial sales pages and get respectable results.

2. Risk-Free Guarantee

Another tactic that can be effective in getting people to try out your software is a risk-free guarantee.

A risk-free guarantee is a warranty from the company that if the customer is unhappy with the product, they will get their money back within a given time period — usually 30 days.

This can be an effective way to get customers to try out your product because it takes the risk off of the customer’s shoulders and puts it on your own shoulder (this is called “risk reversal”).

Here’s an example from Carrot, a SaaS company in the real estate niche…

Risk-Free Guarantee example.

This typically isn’t quite as compelling as a free trial, but it’s an effective option for those business owners who want to shy away from giving their software away for free.

3. Freemium Plan

A freemium plan is a plan that offers a limited amount of features for free with the option to upgrade to a paid account for more features.

HubSpot, a popular marketing automation software, offers a freemium plan for those who aren’t ready to pay for their software.

Freemium Plan

Offering a freemium plan is a great way to get people to try out your software because it gives them a taste of what they’re getting themselves into without requiring them to enter their credit card information.

Out of the options mentioned so far, this is probably the most effective for generating leads as a SaaS business — but be aware that a hefty portion of those leads will stay on the freemium plan.

Here’s a comparison of freemium option vs. free trial option made by Openview Partners

A freemium plan converts fewer people to paid plans, but those they do convert happen typically without talking to a salesperson. Free trials, on the other hand, convert a higher percentage of leads into paid customers, but more often with the help of a salesperson.

Here are the “Final Thoughts” for their benchmark report comparing the two options:

  • Ultimately, what drives home the value of a freemium product for us is its cost-effectiveness from a manpower standpoint. Freemium products convert customers without sales 25% more often than a free trial model.
  • The choice is yours, but also note that there are big differences between the median and third quartile for each of these conversion rates. In some cases, the third quartile, which represents the best performing SaaS organizations, is 2–3x higher than the median.
  • How can you get your business to reach that upper quartile? Leverage these benchmarks, invest in a growth team, and run experiments. It’s worth it if you’re doubling or tripling your revenue.

4. Webinar

At ClickFunnels, webinars are one of our favorite ways to generate leads and acquire new members all in one fell swoop.

Here’s a webinar that Russell did early on in the life of ClickFunnels…

Webinar, Clickfunnels example.

When people register for the webinar, you’re generating leads. During the webinar, you’re building trust and authority. At the end of the webinar, you’re turning those people into paying customers.

It’s a win-win-win if there ever was one.

And that’s why we highly recommend running webinars for your SaaS business — they work like a charm.

Check out these webinar funnel templates to get started! And here’s our complete guide to building a webinar funnel.

5. Demo

A demo is a live presentation of your software in which you walk the customer through how your software works and how it can benefit them. 

It’s a great way to show off your product and get people excited about using it.

Plus, it’s a great opportunity to answer any questions that potential customers may have about your software.

Demo, Carrot example.

When creating a demo, it’s important to make sure that you’re prepared for anything. You don’t want to waste the customer’s time by not being able to answer their question.

Make sure you’re well-prepared and rehearsed so that you can give the customer an awesome demo that will make them want to buy your software.

Don’t know how to do that?

Think of your demo as a webinar to inbound leads — and snag our Perfect Webinar scripts for just $7 to virtually guarantee success!

6. Lead Magnets

Lead magnets are another essential part of most SaaS businesses’ sales funnels.

Lead magnets are essentially free downloads or offer that you give away in exchange for someone’s email address.

They’re a great way to generate leads, and they’re especially effective when you offer something of high value (like an ebook, whitepaper, cheat sheet, or free training).

When creating a lead magnet, it’s important to make sure that it’s relevant to your target audience. You want to make sure that the offer is something that they’ll be interested in and something that will guide them ultimately toward using your software.

We use lots of lead magnets at ClickFunnels.

We’ve got challenges…

Lead Magnets, challenge example.


Lead Magnets, free book example.

And free courses…

Lead Magnets, free courses example.

These work great for growing our email list. And the bigger our email list, the more affordable it is to market to an audience of people who are interested in our software.

Sales Funnel Phase 2 – the Upsells

Phase 1 was all about getting people in the door — whether that meant growing your email list or getting new customers with free trials, freemium plans, risk-free guarantees, webinars, and more.

Phase 2, then, is about upselling those leads and customers to your premium plans.

Here are some of the most effective tactics SaaS companies use to upsell new leads and customers.

1. Pricing Plans

Pricing plans are a hallmark trait of SaaS companies — cheaper plans offer fewer features and premium plans offer more features.

It’s important to make it clear to your leads and customers out of the gate that you have different plans for different types of users. It’s also important to make sure that your pricing plans are easily visible on your website.

When you’re brainstorming these plans, consider how you’ll encourage people to upgrade to premium.

For example, you could offer additional integrations…

Pricing Plans

You could scale with your members…

Pricing Plans, scaling options.

Or you could include super neat features in your premium plans…

Pricing Plans, additional premium plan pricing option features

It’s worth spending some time brainstorming and thinking about how you’ll push your dream customers up your value ladder.

Make your allocation of features compelling… and you’ll upsell people like clockwork.

2. In-App Upsells

One of my favorite things that smart SaaS companies do — and something that regularly makes me upgrade my plan — is in-app upsells.

Rather than remove the neat features that premium plans include from the user’s dashboard, they use it as a gentle way to upsell existing customers with a single click.

Buffer does this, for instance, when a user exhausts their current plan…

In-App Upsells

Headspace, the meditation app, does this as well when users click on a feature that’s not available under their current plan…

In-App Upsells, subscribers only example.

Use these types of in-app upsells to remind your freemium or lowest plan users of what they’re missing. It’s a great way to guide them toward your premium plans and provide real value at the same time.

3. Active Promotion

It’d be crazy to talk about upselling members to premium plans without mentioning active promotion.

You want people to upgrade.

So why not ask?

Spotify is shameless in trying to get people to upgrade to their premium plan with a free 3-month offer…

Active Promotion example.

And so are many other smart SaaS companies.

Do what you need to do to get people upgraded — email them about all the awesome features they’re missing out on and offer them a discount or free trial if they upgrade their freemium plan.

Phase 3 – Retention

We’ve talked about getting your target market into your ecosystem and upselling them to your premium plan.

This next phase is all about retention — that’s the name of the game when it comes to SaaS companies.

And so here are some tips for retaining customers over the long term.

1. Educate Customers

Never forget that if your customers win, you win.

That’s something we really believe here at ClickFunnels — we’ve helped hundreds of our members make millions of dollars through their sales funnels, and we’ve given away tons of free training and resources for budding entrepreneurs.

Needless to say, it’s paid off.

And it will for you, too.

The more that you educate your customers on how to make the most of your software and how to achieve the success they desire, the longer they’ll be a member.

Simple as that.

As an example, here’s an email that Spotify sends to help its members get the most out of its app. 

Educate Customers, Spotify graphic.

2. Create Community

When you’re building a SaaS company, nothing is quite as powerful as having a tribe of people who love the software you provide and the methodology you teach.

That’s something we’ve really worked on cultivating at ClickFunnels.

We have a ClickFunnels Facebook Group with over 200,000 members in it, we have a yearly event called Funnel Hacking Live, and we have our Two Comma Club, which is full of our most successful members.

Creating a community like this will benefit your own business as well.

It allows people to belong to something that’s greater than themselves, which, let’s be honest, is a simple but powerful human desire.

3. Encourage Habituation

One way to retain customers is to encourage them to form habits around your software or app.

If they can get into the habit of using your software, they’re much more likely to stick with it in the long run.

How do you do that?

Make it easy to use, allow the user to see to track their results, and use push notifications to encourage daily engagement.

Here’s an example of notifications that Headspace pushes to its users…

Encourage Habituation, push notification example.

Final Thoughts

Building a winning sales funnel for your SaaS company is essential to success.

Make sure you’re using the right tactics to attract and convert leads, upselling those leads to your premium plans, and retaining customers as long as possible.

In this article, we’ve outlined some of the most effective tactics that SaaS companies use for accomplishing those goals.

Click below to get a free trial of ClickFunnels to build sales funnels for your SaaS company!

Try ClickFunnels For Free Now!

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