How to Create a Sales Funnel on Instagram: 9 Effective Tips for SMBs

How to Create a Sales Funnel on Instagram: 9 Effective Tips for SMBs

To establish a social media presence, more and more small and midsize businesses find Instagram to be a powerful marketing channel. For SMBs, Instagram can also be a great place to create a sales funnel and boost sales. Follow these nine effective tips to get started.

No matter your business size or niche, every business owner wants more sales. When building a sales funnel, it's important to focus on the right channel that works best for your company.

Long story short: A website isn't necessarily the primary sales channel for SMBs anymore.

According to recent research, only 64% of SMBs have a website, and 60% opt for investing in social media marketing to reach the target audience and market products or services.

When choosing the best social media platform, more and more small and medium businesses place their bets on Instagram, as 53% of internet users are active on the platform, and its community has 2 billion monthly active users.

Why Should SMBs Create a Sales Funnel on Instagram?

In the last decade, consumer behavior has changed. Modern customers use their mobile phones to research, compare, and buy products. Based on phone usage statistics, an average user spends 4 hours and 23 minutes on their phones daily.

As a mobile app with a focus on visual content, Instagram is a perfect channel for showing products to your target audience and encouraging them to buy from you. Moreover, Instagram impacts product discovery, as 89% of users buy something after seeing it on the platform and 56% of Instagrammers claim that seeing product photos increases their chances of buying.

You may believe that Instagram shopping is only relevant for big companies with an army of international fans, such as Nike, Victoria's Secret, or Tommy Hilfiger. But it's not true. Here are three main reasons for SMBs to create a sales funnel on Instagram:

  • People use Instagram for product discovery. Since people spend a lot of time on Instagram, it's easier for them to discover and research products in-app. What’s more, around 80% of people use Instagram to decide whether to buy a product.
  • Instagram is a cost-effective marketing channel. It doesn't take money to establish an Instagram presence and reach your target audience. And Instagram ad campaign costs are relatively low, so it's just a perfect place to boost social media sales without investing too much money.
  • Instagram has features for building a sales funnel. With 25 million businesses on the platform, Instagram realizes the importance of this channel for companies of all sizes and niches. Thus, Instagram has many business-specific features like clickable links and in-app checkout to create a sales funnel.

Now that you know the importance of using Instagram to create a sales funnel for your company, let's learn more about the main stages of the customer journey.

Stages of an Instagram Sales Funnel

An Instagram sales funnel is like a traditional one. It also has four main stages: awareness, interest-evaluation, desire, and action. Customers walk through these stages during the customer journey and here's how this process can look like:

To dig deeper into the topic, let's sum up the actions that stand behind each stage of an Instagram sales funnel.

  • Awareness. At this stage, potential customers first learn about your company and its products or services. Whether users visit your profile, see your product as a recommendation, or find your ads, there are many ways to boost and measure brand awareness.
  • Interest-Evaluation. Once people know about your brand, the next step is to cultivate their interest in your products and prove that you have valuable, competitive solutions to their problems. People also evaluate your company and whether it can meet their needs.
  • Desire. When customers start seeking solutions that meet their needs, wants, and budgets, this stage appears. Here, people consider your product as an option, and it's high time to give them a reason for it.
  • Action. The final stage, action, is when people decide to make a purchase decision and they complete a purchase, giving your product a try. During this stage, it’s important for companies to provide a memorably excellent customer shopping experience and make this process easy and interesting.

To create a sales funnel on Instagram that yields results, it's important to meet your customers where they’re, so your Instagram content strategy should address all four stages.

Here are nine effective tips for SMBs on how to create a sales funnel on Instagram.

Talk About Your Product in Instagram Reels for Wider Reach

Around 66% of consumers watch video content to learn about a company, so the video format has become one of the most effective and popular content types on Instagram, too.

When done right, not only does video content tell more about your product, but it also helps to get in front of a wider audience–simply create Instagram Reels, short and engaging vertical videos with different visual and music effects.

Users love Instagram Reels, and they watch 140 billion Reels daily. What’s more, this video content type has more chances of showing up on the Explore page, which helps to reach a wider audience of potential customers.

When creating Instagram Reels, Namu Home Goods added a comment with the product name and the website address to help new interested users check out the position on the web:

Source: @namuhomegoods

But if you want to grab the attention of your audience, spice up your Reels with advanced video and sound effects–find a video editing tool that works for you. For example, here's how magician Jack Rhodes used Videoleap by Lightricks to customize layers with blending and masking to create a scroll-stopping Reel that shows stunning magic tricks, raising interest in his services:

Source: @jackrhodesyt

Beyond the advanced effects on offer, Videoleap is also home to vast libraries of templates from its community of creators–many of which include AI filters–making it easy to plug in your own footage, personalize elements as needed, render, and post straight to Instagram.

Invite Instagram Nano Influencers to Share Referral Codes

In the digital era, when practically every user follows at least one opinion leader on social media, the popularity of influencer marketing is growing day by day.

Today, influencers come in all sizes and shapes, so small and medium businesses can also make the most out of this tactic with the help of nano influencers–opinion leaders with small yet engaging and loyal followings.

Working with nano influencers is one of the most effective influencer marketing trends that help both big and small brands get in front of their target audiences without spending too much.

When it comes to creating a sales funnel on Instagram, you can ask nano influencers to share a referral code that can help their followers save money when buying from you and give these opinion leaders something valuable in exchange, too.

Check out an example of this strategy:

Source: @navika_kotia

To make it easier for influencer's followers to use their bonus, it's a smart idea to use dynamic QR codes that allow users to make codes and change them when needed.

Still not sure it's right for your SMB? This tactic helps to achieve several social media KPIs: build brand awareness, boost referral traffic from Instagram, and get revenue from sales.

Create a Descriptive Instagram Profile

To create a sales funnel on Instagram, it's important to make sure that your Instagram profile targets the right audience and delivers the right brand message. In other words, you need to create a descriptive Instagram profile that tells more about your company, products, and the value of your business.

First, you need to make a well-written Instagram bio that tells about your company and values. And never forget to add a website link, as this is your most promising opportunity to provide more information and drive traffic.

Second, make good use of Instagram Story highlights and group the best Stories into separate albums that help visitors find information faster.

Finally, create a content calendar and upload useful yet interesting posts about your company, employees, and products. It helps to reach Instagrammers who may want to become your affiliates and therefore customers and spark interest in your product during every stage of a sales funnel.

Here's how one espresso bar did it:

Source: @ellascafenyc

Optimize Your Profile for Instagram Shopping

A good sales funnel meets potential consumers at every stage of the customer journey and makes it easier for them to convert into paying customers. Thus, a sales funnel on Instagram should help people discover your products, find out prices, and even buy from you without leaving the app.

Long story short: optimize your account for Instagram shopping.

Not only does it help to provide users with information about your products to discover it at their own pace, but it also allows you to improve a sales cycle and therefore turn visitors into leads and customers.

Let's take a look at the following example:

Source: @youcanbeam

BEAM has a well-optimized profile for Instagram shopping that helps visitors find relevant information at any stage of the sales funnel (from reviews to product information and the view shop action button).

Here are effective ways to optimize your Instagram profile for shopping:

  • Create a product catalog with all information about products
  • Add a website link and an action button in the bio
  • Use product tags and shoppable stickers
  • Upload social media videos that feature your products in action
  • Group products in separate Instagram Story Highlight albums

Organize Q&A Live Sessions within Your Expertise

With a wide array of options on the market, customers face overchoice, so it can be hard for them to choose your company from the competitors, especially if you're a small or medium business without an army of loyal fans who constantly promote you on social media.

However, there's a proven way to hook the attention of the worried users who are doubting whether to buy from you: show your niche expertise.

One of the best ideas that work well for your Instagram sales funnel is to organize Q&A live sessions that provide answers to popular questions and help people understand the importance of your product for their needs and wants. If you want to use a streaming platform - great, but these live sessions work just as well on Instagram.

To attract more participants, it's important to announce your Q&A live session in advance, just like in the example below:

Source: @nyuad_healthcenter

Adding information about your Q&A in the image helps to create clickable social media posts as users can quickly understand the message behind your visual while scrolling their feeds. As a result, it can help to convert more users into leads.

Share Time-Limited Offers and Discounts

When consumers are faced with similar options from multiple companies, most of them will buy from brands who offer a more reasonable price. In other words, people seek out offers and discounts.

Moreover, 30% of people use Instagram when looking for promo codes, discounts, and offers. To create a sales funnel on Instagram that gives results, try this strategy as it encourages impulse buying and makes you different from your competitors.

Case in point:

In honor of the launch of its app, bakery cafe Bar Tartine shared a special code with its Instagram followers to offer a time-limited discount. Not only did it increase app installs, but it also resulted in more sales.

Source: @bartartine

Feature Customer Testimonials and Reviews

During the customer journey, potential customers seek out social proof to make sure that your company and product are right for them. In fact, 97% of people pay close attention to customer reviews before making a purchase decision.

To create a sales funnel on Instagram and give your visitors a reason to buy from you, it's a good idea to turn to happy customers and invite them to write reviews for you. Then, you can feature customer testimonials and reviews as proof of product quality and customer satisfaction.

For instance, Great Southern Truffles goes to the next level and they create product posts that feature the product itself and customer reviews. Check out how it looks:

Source: @greatsoutherntruffles

If you want to use the same tactic for featuring customer reviews, it can be a good idea to rely on graphic design tools that offer a wide array of Instagram post templates. For SMBs, it's a good option to create similar posts that meet your brand identity without hiring an in-house designer–simply find your template and customize it by adding brand colors, fonts, or logos.

Wouldn't it be great if you could reach your potential customers before they discover your Instagram profile without investing money into paid ads?

With sponsored Instagram giveaways, it's no longer a dream!

Since giveaways still remain one of the most engaging content types on Instagram, many companies and influencers organize contests. For SMBs, this means a great opportunity to reach a wider audience of potential customers, boost brand awareness, and even find new customers.

How? Find relevant companies or influencers within your niche and check out various company swag ideas to offer your brand freebies as prizes. Check out an example below:

Source: @Dividendmagic

Set Up and Promote Your Loyalty Program

Because practically every SMB company wants to sell more, it's a common misconception to believe that selling your product is the final stage of the sales funnel.

In fact, you should work with your customers after selling to them. To retain customers and give them a reason to recommend your company to their friends and family, always aim to optimize for customer loyalty.

One of the easiest yet effective ways for SMBs is to set up and promote a loyalty program on Instagram. In the following video, Tee-Lish Brownies tells viewers about its loyalty program and guides interested users on how to join the program to start earning rewards:

Source: @teelishbrownies

Take Your SMBs to The Next Level with an Instagram Sales Funnel

With a fast-growing and engaged user base, many SMBs believe that having an Instagram presence is a must for them. However, just a few small and medium businesses invest time and effort into creating an Instagram sales funnel.

At the same time, you can effectively market products or services, establish a connection with the target audience, and boost sales if you have a sales funnel on Instagram that meets your customers at every stage of their customer journey.

Thus, test out  the above-mentioned tips on how to create a sales funnel on Instagram and find the best solutions for your SMB to get wonderful results.

About the Author

Val Razo is a freelance SMM consultant who believes in the power of Instagram for businesses of all sizes and niches. With 8 years in the industry, Val also writes for digital marketing websites to share her tips and best practices on using social media. To get in touch with Val, follow her on Twitter.