The sales funnel is a basic concept of marketing and goes hand in hand with the concept of cold and warm audience.
In short, the sales funnel refers to the stages that potential customers go through until they make a purchase. Before they "enter" the funnel, people have not heard about your brand or product (they are cold audience), and when they enter the funnel, they hear about your product (warm audience), then some of those who have heard about the product will be interested (even warmer audience), some of them will want to buy and some of them will buy. That's how we explained both the sales funnel and the cold/warm audiences.
The stages of the funnel are divided in many ways and usually the number of stages is directly proportional to the marketing budget, but the most well-known scheme is: 1) awareness, 2) interest, 3) desire, 4) purchase. In each stage, of course, there are fewer people than in the previous stage, hence the comparison to a funnel.
Good. So what do we do with this sales funnel thing?
We use creative and technical means so that we address the target audience according to the stage they are in and maximize the chances of moving to the next stage. You won't talk to a stranger the same way you are talking with a friend, right?
We are opening a new dental clinic in town. Let's say that the potential audience is the whole city and that we only promote ourselves online, on a single platform, to make things simple. For now, the whole town is cold audience. Let's heat it up!
1) Awareness. We publish an advertisement that says "We are the new dental clinic in town and we have opened our doors". The advertisement will be seen by all the people in the city, except those who have already shown their interest: they liked the page, entered the website, interacted with the ad, etc.
2) We show the people who showed interest in the first ad, the advertisement no. 2: "This is who we are, this is what patients say about us, those are our values , etc." This is how we build trust. This ad is not shown to existing patients. We are not selling/making promotions yet.