Sales Funnel

What is a Sales Funnel? The Best System To Sell Online

What is a Sales Funnel?
Written by James Hughes

No matter what it is you’re attempting to sell on the internet. A sales funnel is the top way to accomplish it. This is the best systematic way to develop trust. To build a relationship and to motivate people to want your brand before producing a sale-and it is extremely potent when done well.

Take a look around the net and chances are that you’ll have discovered a plethora of sales funnels. Without even knowing it. So what the hell is a sales funnel? How does it function? And how can you take advantage of its power for yourself?

Those are the questions we’re going to be asking and answering in this comprehensive sales funnel article. At the finish, you’ll know precisely what an ebook is and why it’s so crucial. You’ll also be able to create your own sales funnel from the ground up. Use it to capture leads and convert them into paying buyers.

Once you understand the technique behind this, you’ll see why it’s the most successful way to grow profits. You’ll have the ability to turn any services or product into a huge success.

What are sales funnels?

Before we go any further, it would perhaps be useful to explain exactly what a sales funnel is. Find out here what you’ll be using it for.
Essentially, a sales funnel may be visualized as a funnel for customers. You start out with a broad entrance to hook as many leads as possible. After, you’ll gradually narrow those leads down to only the most engaged and interested customers. So that you can sell to them. At the same time, you’ll be establishing trust, building engagement and prepping them ready to generate a sale.

You can also consider this as a ladder, which each rung taking your customers closer to the top where you’ll eventually try to sell to them.

The Value Ladder
Each of these marketing steps is a rung on a ladder, it's a little further down the funnel. And each time a customer clicks the next link, or follows you to the next step, they are becoming increasingly more likely to purchase from you.

In practice, what this means is a series of different marketing strategies, each arranged in such a way as to build more and more targeted leads for your business. So you might start with a simple advert, or an article and then move on to an email list, then a ‘free guide’, then an auto webinar, then a small product sale and then a big sale.

Each of these marketing steps is a rung on a ladder, it’s a little further down the funnel. And each time a customer clicks the next link, or follows you to the next step, they are becoming increasingly more likely to purchase from you.

Different Funnels

As mentioned, there’s a good chance you’ll have encountered different sales funnels in your travels around the internet: and you may even have purchased products from others through this technique. You might have encountered a blog and subscribed to the mailing list for instance, and then been told to click on the link in order to see a free video series. And then maybe the free video series asked you to sign up for the next workshop which would cost a little money.

And you may have come across it on YouTube too. For example, Tai Lopez is something of a mysterious business guy who wants to use everything at his disposal to capture new leads and sales.

But he still employs a sales funnel extremely well. If you go on YouTube to watch a video, his ad will very often appear.

The guy then goes on to speak about his cars or his massive house and this makes you want to watch– even if only because it irritates you.

The Free Report

By the end of the video, he offers to show you how to get his three essential tips for generating income. And because it’s free, why wouldn’t you click it? Only at this point, you’re becoming more and more involved with his brand and more and more likely to become a paying customer. When you watch this ‘free’ video, which is on his site or channel, you’ll then be told you can get even more information by signing up for a free report. In fact, this report is key to understanding the video. If you do this, then Tai now has your details and the confirmation that you’re interested in what he has to sell!

You’ve gone from a ‘cold lead’ (someone on YouTube, targeted based on your video watching choices), to a ‘warm lead’ (someone who has demonstrated an interest) to eventually a ‘qualified lead’.

Psychology
You need to consider your marketing strategy in steps and stages and comprehend the psychology of the way you're dealing with people.

The way Tai does this is a little transparent and a little cynical but it’s how all the big names operate including the likes of Tony Robbins and Tim Ferriss. And it’s exactly what you should be doing if you want to make sales. You need to consider your marketing strategy in steps and stages and comprehend the psychology of the way you’re dealing with people.

Imagine if someone came up to you in the street and asked you if you’d like to buy a $5,000 watch.
99.9999% of the time, you would say no to that offer.

What is a Lead Magnet

Why? Well, apart from the fact that you might not want a watch (you are a ‘cold lead’ in that respect), there’s also the small issue of trust, recognition, and authority. You don’t know who this person is, you’ve been given no reason to trust them and you’re probably not going to want to hand over any cash.

That’s why companies don’t do this. Instead, they give you fliers. Fliers are things you can choose to accept or throw away– but either way, they don’t cost you anything and you won’t feel that you’re being pressured into anything.

Other stores do something different: they give away freebies. Walk past Starbucks and you’ll often find them giving away free samples of their new drinks and cakes for you to try.

Again, you can easily walk away if you’re not interested and you won’t feel you’re being strong-armed. If you like the free sample though, then you can come in and try whatever else they’re offering.

Poor Sales Funnel Strategy

If you try and sell to people right away on your website though, then you’re the equivalent of someone trying to sell thousand dollar watches in the street. And if that’s the only thing you’re offering and the only way that your visitors can engage with you, then they’re just going to say ‘no thanks’ and leave, giving you no way to contact them again and no way to get them back. As you might have guessed, this is a poor strategy!

Try to imagine it from their perspective: they have typed ‘fitness tips’ into Google, found your page essentially by accident and now you’re trying to sell them your training program for $500. People do not make decisions on that basis unless they’re loaded with cash. They’ll see you’re trying to sell them, write you off as spam and then leave.

The Alternative

Now imagine the alternative: the sales funnel technique.
They do the same thing: they type in ‘fitness tips’ and they land on your site where they get some great information right away. That information is unique, interesting and useful but at the bottom, it tells the audience that if they want more great tips– your ‘5 Most Powerful Tips’– then all they have to do is to enter their details to receive your free report.

There’s very little reason for them not to do this: you have demonstrated that you’re able to provide value and you’re offering something for free. The only price they pay is to allow you to contact them in the future – but as you will point out, they can always just unsubscribe if they don’t want to hear anything more from you.

Good Subject Lines

They get their free report and once again, they find it is really good. At the same time though, they’re now getting emails from you – emails with highly engaging and interesting subject lines. The people who click those emails are now showing very good engagement and you can see that they’re the kinds of people that might be willing to buy from you.

Those people will receive an email via an automated email sequence that invites them to an exciting free webinar where they can hear you talk online about fitness. This is a great, rare opportunity and if they like what you’ve done so far, they should definitely get involved.

They do that and because they’ve gone so far out of their way to hear you and they’ve listened to the whole thing, they’ve now made the full transition to a fan. They are now engaging with you in a big way and going out of their way to hear more from you. This makes a massive difference because in their own mind it will inform them that you are someone they’re interested in hearing more from.

The Cognitive Dissonance Theory

This relates to an interesting aspect of psychology called ‘cognitive dissonance’. Did you know that the best way to make someone like you is to get them to do things for you. Why? Because this creates a state of cognitive dissonance in their mind otherwise. The brain-like congruence – it likes to see that your actions are consistent with your beliefs.
If you do something for someone that takes a lot of effort then, the brain assumes that you must really like them to have been willing to go to such lengths.

The same thing works here. If someone engages with your brand – if they rush to your seminar and wait for you to come online– they tell themselves that they must be big fans of your work!

Transition To Paying Customer

At the same time, when someone has put a lot of effort into something, that then creates a strong motivation to ‘get something from it’. Your audience will want closure and the best way to do that is by buying from you!

After your free webinar, the next stage is to sell to them. This is them taking the next step and transitioning from a visitor or a fan into a paying customer. This is the point where they become willing to buy from you and where you can start making money.

BUT it’s not going to be the ‘big ticket’ item yet. Instead, you’re just going to sell them something very small. This very small thing is going to be something along the lines of an eBook or a short course. It should cost anywhere from $7 to $47 but what it’s doing is demonstrating that they can buy from you and trust you.

Why Your Small Sale is So Important

This ‘small sale’ is a super important point to include in a sales funnel (and one that not everyone will know to include). The basic idea behind this is that you’re giving your audience the chance to buy from you without too much risk.

Because, as we saw with our watch salesman, one of the biggest ‘barriers to sale’ is risk. People are naturally risk averse and they hate the idea that they might hand over their cash, only for you to go running off into the sunset laughing at their stupidity. They need to see that they can buy from you and trust you.

And if they don’t know that, then getting them to spend $5,000 is going to be very hard. But now sell them something for $5 and you can get them to say ‘why not’? They’ve seen you can offer value from the other steps in your sales funnel and the risk of losing $5 is not too serious. So they take their chance. Only now, they know they can trust you, they know that you’re able to deliver value and their details will already be saved in your payment system.

The Big Purchase

That means that to make the big purchase, you only have to persuade them that your product is worth it and get them to take the plunge with one click. This is MUCH easier than trying to get them to take the plunge when they’ve never dealt with you before.

And finally, it’s off the back of that sale that you’re going to then sell your high-ticket item. They’ve heard all your free content, they’ve read your ebook … but if they want to get the very most from you and if they want to see the very best, most powerful tips for their training, then they need to upgrade to your most expensive offer.

Multiple Sales 

Alternatively, you might make multiple sales of products that increase in value gradually over time and that way each increase in cost will seem very small. This way, you are making ‘incremental’ increases in price and thus people will gradually increase the value that they’re spending with you and become increasingly likely to make the transition to the truly ‘big ticket’ items. See the chapter on pricing and ‘moving the free line’ for more on this.

But in short, that is how you sell a $5,000 product.

One More Important Point

One more important point is to understand and utilize the power of social influence and membership. This is one more tool you’re going to use to get people to really want to take the next step down your sales funnel. The idea of belonging to something and the idea of being ‘left out’ unless they take that step. So you’re going to point out to your audience that buying your big ticket item means being a part of your movement. It means getting the full experience and means seeing the VIP content that your ‘regular’ customers don’t get to see. They’ll be part of an elite community and they’ll get access to top secret information!

The Key To a High Converting Sales Funnel

What is the key to a successful sales funnel? It’s not the products that you offer or the services that you offer. The price points that you offer are not key. The key to a successful sales funnel is your mailing list. That might seem a bit odd but think of it as the start of your sales funnel because without a mailing list, nothing else happens. Why is your mailing list so important?

First and foremost, it enables you to keep in regular contact with your prospects and customers. You know the old saying, out of sight, out of mind. If you’re not in regular contact with your prospects and your customers, they’re likely to forget all about you and they’re going to go and purchase from somebody else. You’re going to lose out to the competition.

List Building

Now, you’re going to need more than one mailing list. That’s because when someone makes a purchase, you want to move them from the prospects list to the customer’s list so that you know that people who have already bought from you are going to have more trust in you. You’re not going to have to sell quite as hard to them as you do to the prospects who have only got your freebie.

There are some marketers who go even further and have a separate list for each stage in their sales funnel. Once somebody has bought the low or a mid-priced product, they get moved onto a separate mailing list and they start being offered the high-priced products and then, when they bought those, they move up to a higher-priced products list and so on. At each stage of the game, they move over so that they only get offers that are more expensive and offered better value for money.

Landing Page

First thing that happens is a prospect visits your website and orders the freebie. They go to your squeeze page, as it’s called, and they get the information. They enter their name and their email address in. That gets added to the mailing list. Then, they get sent the download link to the freebie. They’ve got the freebie and they should be happy. Then, the prospect is sent lots of useful information.

Now, this is part of the process that a lot of people get wrong. They think that all they have to do is keep hitting their mailing list with sales information, with sales things. Buy this. Purchase my product. Get this affiliate product. It turns people off. What you want to do is you want to make sure that people know that they’re going to get a lot of information from you for free. In addition to the freebie that they’ve been sent.

Exactly how often you send this out is going to depend on your niche. It’s going to depend on how you operate. As a general rule, you want to send probably three pieces of free information to your list. For every one sales email that you send.

Low Priced Product

Once that’s done, your prospect is sent information about your low-priced product. You send that with the sales link. Now, if they buy, and to be honest, most people won’t buy on the first contact for an offer. You keep them on the prospect list and you send them information about affiliate products and other low-priced products until they actually make a purchase. Of course, you keep sending them all the useful information as well.

The Sale
Then, you get to the point where the prospect actually does buy something. When that happens, the customer, which is what they now are, is removed from the prospect list. They are then added to the customer list.

Then, you get to the point where the prospect actually does buy something. When that happens, the customer, which is what they now are, is removed from the prospect list. They are then added to the customer list. Now, some mailing systems will do this automatically. On others, you have to do it manually. It just depends on which systems you’re using. I’ll talk a bit more about that in a moment. Then, of course, the customer gets sent useful information, the same sort of way.

The customer then gets sent information about your high-priced products. Including affiliate products at the same sort of prices. Again, you just simply rinse and repeat all the way through your sales funnel. This is an ongoing process that keeps going on for every stage. In the sales funnel that your prospect or customer is at.

Autoresponder Software

Now, the key to working your mailing list and sending all these emails out are programs called autoresponders. An autoresponder enables you to send automated emails to your list. You don’t have to email each customer or prospect individually. The software takes care of it for you. You can set it up to send emails on certain dates or so many days after the last email.

You can also send one-off e-mails to your list. Some popular autoresponder companies are AWeber which you can find here, aweber.com, GetResponse which you’ll find here at getresponse.com and MailChimp which you’ll find here at mailchimp.com. Each of them have different pricing structures and are slightly different in the way that they operate but the basic principle behind all of them is pretty much the same.

Single Opt-In

Now, one thing that you’ll need to decide at the beginning of your dealings with an autoresponder company is whether you want double or single opt-in. Now, let me explain the difference between the two. With single opt-in, the prospect gets added to your list without any verification. Now, you’ll get more names on your list that way but not all of them will be genuine. Some people will put in a fictitious name, a fictitious email address just to get your freebie. They don’t want any follow-up emails so you don’t know whether it’s a genuine email.

Also, it leads you open to accusations of spamming because somebody might maliciously sign somebody else up to your list. They get hit with all sorts of emails from you that they haven’t asked for. Then, they complain and you’re branded a spammer even though you’re not. You’re a legitimate business person but you’re going to be branded a spammer because this person has not asked for the information to be sent. These days, double opt-in gets to be pretty much the default setting.

Double Opt-In

Having a double opt-in is the prospect is sent an email with a confirmation link to click. If they don’t confirm, then there are no further emails. You don’t get quite so many names because some people can’t be bothered to confirm but you don’t get any spam complaints because you know that it’s a genuine address. You know that the person has asked to receive the emails from you and has confirmed. If they complain, you can go back with some systems and look it up and see, “Ah, well, you signed up on x date and you confirmed on y date so therefore, it’s not spam.” You can prove it so that really covers your backside, so to speak. As I said, double opt-in is becoming the default settings for most autoresponder companies.

I hope you enjoyed my article on Sales Funnels, don’t forget to check out my other articles on marketing.

Here are some marketing tools and resources to help you with your business.

About the author

James Hughes

I'm a professional marketing consultant who helps people build online systems that drive more enquires, generate more leads and increase their revenue.

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