Everything You Need to Know: Sales Funnels

List Building, Software & Tech

Every business has a sales funnel whether they realize it or not. A way to take people who’ve heard about their product and turn them into a paying customer. Although they often have different names when talking about traditional businesses, like pipeline, or client getting process, in online business the term sales funnel is universal.

What is a Sales Funnel?

Funnels are wide at the top and narrow at the bottom, the idea being that you can put a whole lot of something into the top of a funnel, but in the process of going through the funnel, whatever you’ve put into it will be diminished, so that what comes out the other end is smaller than what you put in.

In our kitchens we use funnels to take a large quantity of something we bought in a 5 gallon jar at a big box store and move it into more manageable quantities.

In our cars we use them to pour from a large spouted jug of oil into a small oil pan opening.

In our online businesses we use them to turn people who’ve heard of us into paying clients.

Sales Funnel Strategy

The strategy behind sales funnels is to gather large numbers of people who’ve heard of you and your business in one way or another and then build a relationship with them so they begin to know, like and trust you.

The longer a person is in your funnel, the deeper the relationship grows and the more they trust you. The more they trust you, the more likely they will be to buy from you.

Many people won’t make it all the way to the bottom of the funnel. They may lose interest in your topic, they may decide that they no longer need what you’re offering, or they may decide you’re not their cup of tea. That’s why the top of the funnel is so wide – the more people you get into the top, the greater the chance of great clients coming out the bottom.

How is a Sales Funnel Different Than Other Funnels?

There are many different types of funnels used in business. Lead generation funnels are used to collect information from people who are interested in what you do, but probably aren’t ready to buy. In online business, these are sometimes called email funnels because their goal is often to collect email addresses as a way to contact the prospective client in the future to give them more information about what it is you do.

This contact could be in the form of more emails, blog posts about your topic, or even free webinars or trainings that take them to the next step on their journey of coming to know you and your company better.

Online sales funnels have the goal of turning people into paying customers. They are specifically designed to “get the sale,” and often have multiple places within the funnel where different products are introduced.

It is common for someone to enter a sales funnel from a lead generation funnel, a paid ad, or a free training with an offer at the end to go deeper with you.

Do You Need Special Sales Funnel Software?

Although there are companies who offer funnel building software, the reality is that you can create your own sales funnel using systems that you likely already have in your business or that you would need any way. You don’t need to pay extra for special sales funnel tools.

Software Required for a Sales Funnel:

How to Create a Sales Funnel:

Step One: Lead Generation for Building an Email List

Before you can create a sales funnel, you need to have an email list. In fact, having an email list is so important that many people start a lead generation funnel long before they have anything to sell by offering something enticing free to people in order to get their email addresses.

You can find out more about lead gen funnels here. 

Email funnels are also a great way to determine the types of content  your ideal customer is looking for and finds appealing. If you create a valuable free lead magnet that no one wants, you can be pretty sure they aren’t going to be interested in paying you for a product on a similar topic.

Step Two: Test Small Offers

Once you have people’s email addresses, it’s time to nurture them and keep them “warm.” Provide weekly content that takes them deeper on the topic of your lead magnet. Each email you send them will work to build the know, like and trust factor, making them more likely to buy in the future.

Every so often in those emails, offer them a way to take the next step with you. Maybe it’s a 60-minute paid call to discuss a problem they’re having that you can help them to solve. Maybe it’s a mini training that doesn’t cost very much, or maybe it’s an e-book that will help them gain insight on something they struggle to figure out.

In addition to bringing in sales for your business, by sprinkling in low cost offers occasionally, you get your subscribers used to the idea that you don’t just give away free advice, that you also offer paid products. It’s important to do this within the first few emails someone is on your list. It doesn’t have to be something expensive, but if people get used to months or years of free content from you without you ever asking for a sale, when you do ask, they are likely to balk, thinking it strange that their “friend and mentor” now wants money from them.  After all, you want to be helpful, but you do need to pay your bills.

Once they’ve opted in to take that next step with you using an inexpensive product, they’ve entered the top of your sales funnel.

Step Three: Increase Your Value

Now that you have someone who has paid you for something, it’s time to really show them the value you can provide. The best sales funnels take customers along a journey and offer them products just as they need them.

Create a nurture sequence of emails that will take them deeper into the product they bought. Explain what it does that they may not expect, describe the quality, or go deeper on something they may get stuck on or find confusing.

Too often as consumers we buy products online and never hear from the company again. This is your moment to shine. Show how you’re different and that you care about their success by nurturing them and helping them grow.

Step Four: Offer Them Something More That They Can’t Wait to Buy

Once someone has entered your sales funnel process and has purchased from you, they are much more likely to buy other, more expensive products in the future.

The key is to have a variety of products, not only in terms of price point, but in terms of delivery method and to always be listening to what the people on your list are telling you by what they buy.

If what they bought the first time from you was a $47, DIY product delivered via videos, they may not be ready for your $10k one-on-one coaching package, but a $497 program that is some videos and some group coaching might be the perfect fit.

The further people move down the funnel, the more likely they are to buy a higher ticket item… as long as you continue to let them know they are valued whether they buy or not.

While the exact statistics vary by company and industry, repeatedly it has been shown that people often won’t buy from you the first time you offer them something, especially when it’s a more expensive product. In fact, they may hang out on your list for months or years taking in the free content and getting to know you before they buy your biggest product.

Sales funnels aren’t really so different from any other funnel that exists in the world. In order to get a steady stream of paying clients out of the bottom of the funnel, it’s necessary to put a whole lot into the top. After that, nurturing them and truly caring about their success will naturally move them into the place of your business where you want them to land.

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