What the heck is a sales funnel, anyway?
For a business owner, and particularly an online business owner, a sales funnel is probably the most important marketing tool you have. And yet many entrepreneurs - both new and established - have no clear understanding of what a funnel is or how it works.
As you can imagine, failing to fully understand this critical part of your business means fewer sales, lower profits, and ultimately, an unstable business.
I've been spending a lot of time lately, explaining the vagaries of the sales funnel to some new clients who've struggled with trying to increase sales without having a basic understanding of the process/funnel's moving parts. A couple of clients suggested I create some sort of materials (in plain language, if you please!) for them to refer to, so I'm starting with this blog post to give some context to this conversation. So, here goes.
A simple sales funnel
At its most basic, a sales funnel consists of free content, which typically requires nothing of your readers. Many sales funnels begin with blog posts, YouTube videos, Facebook content, and other information readers can access at no cost. This is the “top” of your funnel.
Next, you’ll have an attractive offer that requires a very small “payment” of sorts - typically an email address. You’ve seen this type of offer on websites all over the internet, and probably even signed up for some. This is the free ebook or guide, video series, checklist, workbook, or other valuable content that is available in exchange for “opting in” to an email list.
Once they're on your mailing list, treat 'em like gold
Once on your mailing list, you’ll then present your readers with a series relationship building emails, some of which have info on low-cost offers. Perhaps you have a low-priced ebook or a trial membership they could benefit from.
Customers who purchase your lower-priced product move further down the funnel, and are presented with more, higher priced products. As they continue to buy, they move closer and closer to your top-end offers, which make up the bottom of your funnel.
How your funnel works
If you imagine your funnel as looking like, well, a funnel, it’s easy to see that your free content—at the top—is consumed by the largest number of readers. Below that, your extreme low-cost item (available only for the cost of an email address) attracts a smaller subset of the true freebie seekers. Next, your low-priced products bring in yet a smaller group.
Finally, as you near the tip of the funnel, only the most loyal of fans and customers will buy your highest priced offers.
Your job, as the business owner, is to make sure your funnel leads buyers naturally from the top, no-cost/low-cost offers all the way to the bottom. The more buyers you can keep in your funnel, the more money you will make.
Most new—and even established—business owners can easily envision the top of the funnel, but if you truly want your business to grow, you must master the entire sales funnel process, and that starts with understanding what a funnel really is and how it works. Take some time, map it out on paper, then move to action and sure up that funnel. You'll be able to move your fans to the buy stage and be able to track their movement through the entire process.