Last updated on October 18th, 2025 at 05:48 am
Feeling confused by all the terminology out there surrounding sales funnels?
Then you’ve come to the right place!
In this guide, we’re going to provide definitions and real-life examples of all of the common marketing terms related to sales funnels.
By the end, you’ll be better equipped to speak — and understand — the sometimes buzz-wordy and confusing language of sales funnel marketers.
Let’s dive in!
Build Your First Sales Funnel Now For Free!
Funnels
First, we’re going to cover terms directly related to sales funnels.
Marketing Funnel
The marketing funnel is the entire journey from a person being aware of your business to that person becoming a committed customer. That is, the marketing funnel includes running paid ads, sending follow-up emails, search engine optimization, and everything in between.
Sales Funnel
A sales funnel is the path a customer takes to purchase from your business, all the way from interested prospect to converted customer.
The sales funnel includes elements like the sales page, the order page, the upsell page, the “Thank You” page, and any other pages which directly influence the actual conversion event (which could be generating leads or making sales). For example…
The sales funnel represents the sales part of the prospect’s buying journey, but the marketing funnel represents the entire journey — that’s an important distinction.
Challenge Funnel
A challenge funnel is a sales funnel offer that’s presented as a “challenge” to potential leads and customers.
It can either be a free front-end offer or a high-ticket back-end offer.
We have many challenge funnels here at ClickFunnels. Here’s just one example…
Tripwire Funnel
A tripwire funnel is a sales funnel offer that’s designed to get someone’s attention and create a sense of urgency. It usually offers a very low-ticket product (or even free) in order to get someone into the buying process.
Once they’re “hooked” and they’ve entered their information for the low-ticket offer, the tripwire sales funnel promotes a one-time offer that’s a little bit higher priced.
With the friction of entering their shipping and payment information out of the way — and with a healthy dose of urgency and FOMO incorporated — one-time offers get a very good conversion rate.
Here’s what it looks like…
Squeeze Page Funnel
A squeeze page funnel is a short and sweet sales funnel that’s designed to capture someone’s email address. In exchange for their email address, they get something valuable — usually an ebook, video training, or a coupon code.
These funnels are great for growing your email list.
For example…
Value Ladder
In entrepreneurship and marketing, a value ladder is a systematic outline of a businesses’ products, services, and offers — which ascend up the ladder in both value and cost.
On each step of the value ladder (maybe we should call it the “Value Staircase”?) is one of your offers — and those offers increase in value and cost as someone ascends from left to right.
At the top — with the big dollar sign — we’ve got your most valuable and highest-cost offer. This is the pinnacle of where you’re trying to take your customers.
At ClickFunnels, for instance, our top-shelf offer would be our Inner Circle, which is limited to only 100 people at a time, provides massive one-on-one value, and is very expensive.
On the bottom — the arrows and dollar signs going left to right — we’ve got your continuity program. This is the monthly or yearly subscription plan that your business offers to create recurring revenue.
For us at ClickFunnels, that’d be our software that helps entrepreneurs create high-converting sales funnels.
To give you an example, here’s what one of our early value ladders looked like at ClickFunnels, starting with a free quiz and ending with our inner circle…
Upsells & Downsells
Upsells and downsells are two sides of the same coin. An upsell is a part of the sales funnel where you offer someone an additional product or service to add to their order — or you offer them a more premium version of what they’re already purchasing.
For example…
A downsell, on the other hand, is what you offer people after they’ve either rejected your initial offer or rejected your upsell offer.
It’s the point where you metaphorically say, “Okay wait. I’m willing to give you an even better deal.”
Both upsells and downsells are great for increasing average order value.
Video Sales Letter (VSL)
A Video Sales Letter has the exact same content as any other traditional sales letter but consists of video-based content rather than written content.
Truthfully, most Video Sales Letters aren’t entirely devoid of sales copy… they just have more video and less copy.
It’s on the video to do most of the selling.
Here’s an example from Jaimie Cross, a ClickFunnels member who sells organic soaps and lotions.
Self Liquidating Offer (SLO)
A self-liquidating offer is an offer that’s designed to pay for itself. In other words, it’s an offer where the cost of acquiring a new customer is less than or equal to the revenue that they generate.
For example, let’s say you’re selling a $97 e-book and you’re able to acquire each new customer for $95 in ad spend. That would be self-liquidating. These offers are a great way to reduce your customer acquisition costs (CAC) and increase your profits.
Order Bumps
An order bump is an additional offer that you can present to leads on your landing page. This offer is usually something that complements the product or service that they were already interested in.
For example, if you’re selling a course on effective email marketing, your page could offer a free e-book on the same topic as an order bump.
This is an effective way to increase your average cart value.
Landing Page
A landing page is the web page that a visitor arrives at after clicking on a link, advertisement, or search engine result. It’s the first page that they see, and it’s usually designed to persuade them to take a specific action, such as signing up for a subscription or making a purchase.
Unlike a homepage, landing pages typically don’t allow for site-wide navigation and instead focus on promoting a single conversion event.
Soap Opera Sequence
A Soap Opera Sequence is a series of 5-7 emails that are used to engage readers, build rapport, and sell products.
It’s called a “Soap Opera” sequence because of the inspiration it draws from seductively engaging Soap Opera TV shows.
The Soap Opera Sequence allows you to approach sales from the side (rather than directly), with a story that drives your dream customers unknowingly toward wanting to buy your products.
One-Time Offer (OTO)
An OTO is an offer made to customers after they’ve already purchased something from you. It’s a chance to upsell them on a higher-priced product or service.
For example, let’s say you sell an online course teaching people how to start their own businesses. After someone buys your course, you might offer them an OTO of one-on-one coaching at a higher price point.
This type of upsell is a fundamental part of the tripwire sales funnel.
Core Offer
Your core offer is the main product or service you’re selling. It’s the thing that your business is built around, and it’s what you hope most of your customers will buy.
At ClickFunnels, our core offer is our software. This is the main product or service that people are buying from you, and it’s what you hope they’ll continue to buy in the future.
Metrics
Now let’s discuss some sales funnel terms that are related to marketing metrics.
Lifetime Value
Your LTV is the average amount of money a customer will spend with you over the course of their lifetime. This number is important to know because it helps you determine how much you can afford to spend on acquiring new customers.
For example, if your LTV is $1,000 and it costs you $500 to acquire a new customer, you might be able to afford to lose money on that customer in order to get them on board.
The formula for this metric is :
LTV = (average customer lifetime in months) x (average customer spending per month)
Ad Spend
Ad spend is the amount of money you’re spending on advertising. This can be anything from paid ads to sponsorships to influencer marketing.
If you’re running a Facebook ad campaign, your ad spend would be the amount of money you’re paying to Facebook to run those ads.
Average Order Value (AOV)
Your AOV is the average amount of money each customer spends when they make a purchase from you.
To calculate your AOV, you simply take the total revenue from all sales made in a period of time and divide it by the number of orders placed during that time.
For example, if you had 100 orders last month with a total revenue of $10,000, your AOV would be $100.
AOV is important to track because it can help you determine which funnels and campaigns are driving the most valuable customers. If you have a high AOV, you can afford to spend more to acquire each new customer.
Conversion Rate
Conversion rate is the percentage of people who take a desired action, like buying a product or filling out a form.
To calculate your conversion rate, you simply divide the number of people who took the desired action by the total number of people who saw the offer.
For example, if you had 100 people see your offer and 10 of them bought, your conversion rate would be 10%.
Conversion rates are important to track because they help you determine how well your marketing efforts are performing. If you have a low conversion rate, it means you need to work on improving your offer or increasing traffic to your site.
Customer Acquisition Cost (CAC)
CAC stands for customer acquisition costs. This is the amount of money you’re spending to acquire new customers, and it includes things like advertising, marketing, and sales expenses.
To calculate your CAC, you simply take your total marketing and sales expenses for a period of time and divide it by the number of new customers you acquired during that time.
For example, if you spent $10,000 on marketing and sales last month and you acquired 100 new customers, your CAC would be $100.
CAC is important to track because it helps you determine whether or not your customer acquisition efforts are profitable. If your CAC is higher than your LTV, you’re losing money on each new customer you acquire.
Bounce Rate
Bounce rate is the percentage of people who leave your site after viewing only one page.
To calculate your bounce rate, you simply divide the number of people who bounced by the total number of people who visited your site.
You can find this metric inside most web analytics software.
Bounce rates are important to track because they can help you determine if your site is easy to use and navigate.
Cost Per Click (CPC)
CPC is the amount of money you’re spending to get each person to click on one of your ads.
To calculate your CPC, you simply take your total ad spend for a period of time and divide it by the number of clicks you received during that time.
Most advertising platforms will track your CPC for you.
CPC is important to track because it can help you determine whether or not your ad campaigns are effective.
Click Through Rate (CTR)
CTR is the percentage of people who click on your ad after seeing it.
To calculate your CTR, you simply take the number of clicks your ad received and divide it by the number of times it was shown.
CTR is important to track because it can help you determine whether or not your ad is effective.
Return On Ad Spend (ROAS)
ROAS is a metric that helps you determine how profitable your ad campaigns are.
To calculate your ROAS, you simply divide the revenue generated from your ads by your total ad spend.
ROAS is important to track because it can help you make more informed decisions about where to allocate your marketing budget.
Open Rate
Open rate is the percentage of people who open your email after seeing it in their inbox.
To calculate your open rate, you simply divide the number of people who opened your email by the number of people who received it.
Open rates are important to track because they can help you determine how effective your subject lines are.
Additional Terms
Here are definitions for some additional terms related to online marketing and sales funnels.
Above the Fold
Above the fold is a term used to describe the part of a web page that is visible without having to scroll down.
This term is often used when talking about landing pages or sales pages, as you want to make sure that the most important headline and images are above the fold so people can see it without having to do anything.
Urgency
Urgency is a marketing technique you can use to get people to take action.
This can be done by adding deadlines, limited availability, or special prices.
Urgency is important to use because it can help you increase conversions.
If people feel like they need to take action right away, they’re more likely to do it.
FOMO (Fear Of Missing Out)
FOMO is a psychological phenomenon that refers to the feeling of anxiety or fear that comes from thinking you might miss out on something.
This can be something as small as not being able to go to a party or as big as missing out on an investment opportunity.
FOMO is often used in marketing, as it can be a powerful motivator.
Copy
Copy is the text on your website or in your marketing materials.
It’s important to have well-written copy that is clear and concise.
Your copy should be written in a way that speaks to your target audience and tells them why they need your product or service.
Credibility Badges
Credibility badges are images or icons you can use on your website to help build trust with your visitors.
These badges can be anything from awards and certifications to customer testimonials.
Credibility badges are important because they can help convince people to buy from you.
If they see that you’re a credible source, they’re more likely to trust you and make a purchase.
Social Proof
Social proof is a psychological phenomenon that refers to the idea that people will do what other people are doing.
This can be done by displaying social media metrics or customer reviews on your website.
Social proof is important because it can help you increase conversions.
If people see that other people are buying from you, they’re more likely to do it themselves.
Affiliate Marketing
Affiliate marketing is a type of performance-based marketing where you pay people (affiliates) a commission for generating sales or leads.
This can be done by having them promote your products or services on their website, blog, or social media channels.
Affiliate marketing is a great way to get exposure for your business while only paying for results.
Content Upgrade
A content upgrade is an additional piece of content that you can offer to people after they land on a blog post in exchange for their email address.
This can be something like a PDF guide, a video tutorial, or a set of bonus tips.
Content upgrades are important because they can help you grow your email list.
Leads
Leads are people who have shown some interest in your product or service.
They may have filled out a form on your website, downloaded a white paper, or attended one of your webinars.
Leads are important because they’re the people you want to turn into customers.
You can nurture them by sending them relevant information and offers until they’re ready to buy.
That’s All, Folks!
Sales funnels are a crucial part of any online business. By understanding the terminology used to describe them, you’ll be better equipped to create and track your own sales funnels.
Click below to start building your first sales funnel for free!