What is a Sales Funnel?
It’s common for businesses to get online selling only one product or service without any upsell. For example, you might have an eBook solving an urgent problem that you want to sell and market.
Well, that’s fine for a hobby business, but if you ever want to turn that hobby into a serious business with a long term income stream, and potentially break free of the rat race, then you absolutely must have to have a well structured sales funnel.
A sales funnel is a well thought-out pattern of follow-up sequences, and product upgrades and offers that are designed to maximize the amount of income that you can earn from each visitor or buyer to your site.
Most sales funnels usually start with someone giving you their email address when they land on your landing or squeeze page, which then leads them step by step through a sequence of offers and additional information in some sort of logical sequence.
A good sales funnel usually steps the potential buyer up through higher and higher price points over time. In its most effortless form, this is done by building trust and credibility by providing incredible value to the visitor giving them more incentive to buy from you.
Initially, your first product might only be $10 (or even free to get the lead) but you can increase your value to them, in their eyes and then jump to an offering of $97, then $197, and eventually $2,000 or more for a workshop or coaching experience.
Sales Funnel are Important!
In marketing circles, a well-known idiom is that “The Money is in the Back End.” That means that while up-front sales are great and fun, the real focus and longevity of you business is in making repeat sales to existing people who already know and trust you.
Statistics show that it is about 7-times easier to sell to an existing customer than it is to find a new buyer. It’s also much easier to make significant money by selling higher ticket items. It’s just mathematics after all. As an example, you’ll need to make over 50 sales at $47 to make up for one $2,500 sale.
So while it is also said that “The Money is in the List,” which is where any good sales funnel begins, but it is not entirely true if you have no funnel or follow-up sequence.
Sales Funnels can Help you Beat your Competition.
If you don’t have a sales funnel, with a proper marketing campaign, you simply won’t generate the income you deserve. You will always leave money and true success on the table.
It is critical to leverage each website visitor, who then becomes a lead, and eventually a buyer, to your fullest potential by offer great value and content. Always provide the opportunity for them to get more with the genuine intent to help.
This make you more valuable in their eyes, and forces you to create even better products and more opportunities to promote other offers in your industry to earn commissions. The more valuable you prove yourself to be, the easier it is to eliminate you competition.
So how much of a Difference can a basic Sales Funnel make?
Let’s say you’re selling an eBook at $40 and you have a conversion rate of 1 % which makes the value of each visitor worth $0.40. So for 1000 visitors you are making on average $400. Not exactly a full-time living, but if you increased your traffic by a few thousand dollars, it could be quite decent.
Now, your competitor is smarter. With split testing, they were able to determine that selling their eBook at $20 would yield a conversion rate of 3 %. So their average customer is worth $0.60… already beating you.
What if they also offered a video course as a companion to their eBook for an extra $40 that is a little more in-depth and provides examples and more value. If 30 % of the people who purchase the eBook end up buying the video course add-on, then that is an extra $400 total. Which makes the average customer value $1.
That is just from one upsell and with a lower entry point. We haven’t even discussed coaching, membership subscriptions, or even higher value offers. If done correctly, and you captured 20 % of the 1000 visitors on your list, without buying, then you would have an extra 200 people to whom you could offer tips and hints, and cross-sell them on other products and services. Surely some of those would eventually buy your initial offer as well. The potential is truly unlimited.
Those with proper sales funnels, will always be able to out spend people who don’t on advertising and promoting. They can out-spend in every avenue because their cost-per-lead is much higher. They can pay more for pay per click ads, SEO, etc.
So as we have shown, your sales funnel isn’t just about money, it also makes you more competitive, and it forces you to build lasting relationships with your leads. If you have a better sales funnel than your competitor, you’ll be the one who can dominate and be the winner in your niche or market.
So as you can see, from the video above, as well as the example here, while up-front sales are important the real profit is in making repeat sales to those who already know and trust you.
If you don’t have a sales funnel, with a proper marketing campaign and sales process, you simply won’t be able to compete and make a decent living, let alone become financially free.
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