You have been thinking of starting a company, or have already started one with a bit of success, or maybe started one only to fail and are now looking to do research on successful ventures to try again. If you are in any of these categories, you have a lot of fearlessness and determination, great qualities that will help you on the journey to success. But you also need practical advice, tried and true systems that will help you generate the revenue you are hoping to. This is where the sales funnel comes in.
You might already know what a sales funnel is, but we will start from zero and work our way through the system to give you the maximum amount of information to help you be a success. Also here we will try to consolidate information from a lot of different sources to give you the basics of what you will need to create a successful business, but also give enough detail to help you take the practical steps you will need to generate customers and keep them, finally increasing your revenue that you make. So, let’s get started on the journey.
WHAT IS A SALES FUNNEL
Every company wants to create revenue and is, at its essence, a capital making machine. Part of the machine is the sales funnel, which is also has other term names such as the sales process or revenue funnel. The terms might be somewhat self-explanatory: the company makes money and they do that by leading customers to buy products. But the actual working out of the process, and more specifically, how to successfully set up and navigate the funnel toward good profit, is the question you probably have when considering making your company profitable. There are several stages within the funnel, which depend on the sales model you are implementing, but we will incorporate the best models here in one page for you so you can evaluate them together and decide what might be best for you.
The funnel ideally and in brief will lead you as a lead developer to get your customers to go from a prospective customer, before they have invested in your company, to a first-time customer where they have made an investment, to a committed, regular purchaser within your scheme.
Listed as number one, though it is actually a pre-number one to your funnel, the most important key you will want to have going in is the right mindset. Yes, before you even start imagining your dream funnel with many customers, you will need to establish this mindset and go back to it time and again.
STAGES OF A SALES FUNNEL
So we have established that the first step of successful sales funnels is persistence, determination, and a will that doesn’t give up. Moving on to the practical steps with the second point.
This graph shows a simple sales funnel that applies to most paradigms of sales funnels, and we will discuss them here in this article first. The funnel starts with the potential customer becoming aware that the product exists. Without knowing there is a hamburger, no one will bother looking for a fast food joint. Then we move on to interest. The customer sees a billboard with melting cheese, grease dripping off the burger, fresh tomatoes and iceberg lettuce (no one said it has to be healthy), and like Pavlov’s study, the customer starts salivating, and interest is generated. Then, we move on to the decision. The billboard says turn left in 2 miles. The potential customer turns left and goes to the drivethru. They order the burger, and make the payment at the window, which is action. This is a simplified version of what you are trying to do with your company, though in reality it is not much more complicated than that. We will just offer some tried and true solutions and measurements to ensure you better revenue results.
This is the most important part of the sales funnel after your own personal determined mindset. To eventually have people buying into your product, they must first be aware that your product exists. A perfect example is when I go to a home goods store. For the majority of my life, I sit in my apartment carefree and happy with all of my furniture and appliances. But one step into a store that has home goods and I transform into a consumer I didn’t know was in me. I see all of these pieces that suddenly I feel I can’t live without. Oh! A hanging wire that I can hang my herbs from my balcony with! I didn’t know! I always had them sitting on the ground. Oh! A storage container for all my silverware! This, friends, is awareness.
And awareness can be separated into several categories to help you:
- Find potentials: This step is again before you’ve started communicating with customer prospects for your company. This stage helps you identify which people you are going to make aware of your product. This involves:
- Finding a market population: If you are selling a table saw, you will probably not be targeting a 16-18 year-old teenage girl category. You will be looking for a male population, after teenage years. Probably homeowner years on up to senior citizens.
- Decide the number of people in your population: are you a small company, or are you reaching out to a niche in a community with a limited number of people, or are you trying to sell your product to the entire world through as many stores and sites as possible? You need to decide on your market scope and how big your population is.
- Get a marketing team: who is going to be selling your product? Just you or are you needing a team of professionals? If it is a team you will want to meet and together decide on the first two factors and also how to implement the second stage.
- Get a lead magnet: at this stage, you may or may not have already garnered interest in your product. But you might want to do this before you get to the interest phase, which is the next phase we will discuss. You want to have an initial attraction that will help draw your customers to your product. This could be a short video or a free trial offer if it is an online service, or something free that will initially draw in your potential customer. And once they are drawn in, your potential customer is already on to their next phase, the interest phase.
This phase starts after your potential customers have become aware of your product or service, and they have also become interested through the lead magnet or from free trials or products that have been introduced to them. Also your potential customers might start to do their own research, now that they are interested in your product, to see which one might be best for them. Therefore there are some things you can implement in this stage to bring your potential customer more toward the next layer down in the funnel, the initial buying stage. You do this by encouraging your potential customers and nurturing the relationship.
How to nurture the relationship with your customers:
- Offer research: how can you best get a customer to buy your product? By offering them your own research, backed with facts, as to why your product stands out among competitors.
- Offer more offers: you will want to also give them special offers for your product that they won’t find in other places. If other companies offer paid membership, offer your membership free for the first three months with an option to cancel, or at a lower rate, for example.
- Have them pay something: this is somewhat counter-intuitive, but studies have shown that customers are more likely to invest in… something they have already invested in. So offer them podcasts or membership but for a lower cost than for premium packages.
- Show them you care about their success: this cannot be emphasized enough. How many times have you smelled profit and seen green dollar bills in peoples’ eyes as they are trying to sell you a product? This is of course a turn off and immediately will make you not want to purchase anything from them because there is no insurance from you that the product is quality and instead you are left to wonder if you invest, will this be some illegal scheme in the end that you are investing in and you will end up in prison? Okay that might be extreme but you get the idea. You want your customers to know you care.
And you do this by: genuinely caring about them! And not just that, but believing that your company and/or product is actually going to help add value to their life. You do this by:
- Telling them: tell your customers that you want to see them succeed with this product and that it will make their lives better.
- Showing them: once they have invested a lower amount, make sure they are well cared for by continuing to offer more, a free ticket to a webinar or show or event, for example.
SUMMARY: How to nurture a relationship with your potential or initial customers:
This phase cannot be emphasized enough, because it is what turns buyers into advocates for your product. According to the Harvard Business Review: “willingness to buy and willingness to advocate are two different things.”
- Create useful blog posts for them.
- Answer their questions in a timely manner.
- Invite them to a free trial membership or an initial low-cost membership, encouraging them that you want to see them succeed.
- Give away free tickets to events or webinars.
- Give away free items that the customers aren’t expecting.
- Encourage the potential customer to share their experience with friends. 92% of customers have been shown to trust recommendations from friends. Why? Because they trust the relationship.
With all of this, remember that as you build your own relationship with your customer, you will build a friendship with them as well.
Okay, we have found our target audience and who we are selling to, and we’ve decided on the numbers for that audience, we have put our offers on the table and started building relationships with potential customers, and we have started to offer them memberships, free tutorials, videos, events, podcasts. Now we have primed the pump, so we are in the decision phase for the customer.
The decision phase of your sales funnel is the period where the prospective customers reach a final decision as to whether they will initially invest or further invest in your products and your company. There are a few things you can and should do to best usher in and determine a good outcome from this phase. Return profit and purchases from customers are never guaranteed, but statistically it is proven that with enough prospects, building relationships, and reaching out, enough customers will reach the bottom of the funnel to become real purchasers.
Real purchasers differ from potential customers in that they make an investment in your company, and not only that, but that they eventually invest several times or regularly and at a larger amount than just initial or once or twice buyers. Real purchasers are also ideally real advocators, or will be suggesting your product and services to friends and family and other companies, which will also add to your sales.
Take Starbucks as a classic example. Howard Schultz initially did little to no advertising for the coffee or the shops. He wanted his business model to be built on customer satisfaction and word of mouth almost exclusively. So he didn’t put ads online to advertise on billboards. Eventually enough customers started wanting Starbucks coffee and they expanded, till now they have Starbucks on almost every corner in most major cities in the world. How? By people loving Starbucks coffee and the shop environment, and telling other people about it, so that when a shop opens up in another town, the customers are already ready to go in a make a purchase. These are real purchasers.
Without further ado, here is how you can implement your Decision Phase:
Reevaluate the solution for the customer- they have tried your products and enjoyed them. Now is the time to restate the solution your customer is aiming for. For example if you are starting a dating service and your customers are looking to meet their soulmate, you can remind them that you are committed through your services to helping them find their perfect partner, which is the solution they are looking for through your service. And once you have presented them with your solution to their problem, you are ready to move on to the action phase of your sales funnel.
Now you have taken all the preliminary steps. Now it is time to have some b… ahem, guts and take action! You must ask for the sale but you must also seek to get them coming back and become real purchasers. Here’s how:
ASK- Here is the most critical phase in your sales funnel, the ask. How do you do it?
- Ask fearlessly: This is a critical component because many businesses fail on this particular point. They don’t want to ask for money. But this is the only way to make money with your company. So, fear be gone! If you have built the relationship, and they have already tried a bit of your product, the ask should be the most natural next step.
- Get them coming back: this is another key factor in the success of your funnel. Don’t worry, if you have cultivated the relationship then it should be easier than you think. For example, one small business I have been successful at building has maintained the same customer base, as in the exact customers themselves, for over 15 years now, and has been enough to be a main source of income for any one individual on a monthly and annual basis. How? Through building the relationships. Once we have established trust and friendship, they will continue to buy and also encourage others to do so. Now this leads us to our next critical step. How do we manage the funnel overall? And are there any real life examples to not only prove its effectiveness but help you get results?
MANAGING A SALES FUNNEL
Well, you now have the four main steps in your sales funnel covered: Building awareness, Interest, Decision Phase, and your Action Phase. You have worked up a good customer base, and you have even made a few sales. How can you keep the people coming back? Through optimizing customer service, or managing your sales funnel. This is really an extension of the Action Phase.
If you can manage this part well, you will be able to make great profits eventually. Here are a few helpful tips, but if you eventually want to see exponential profit, look at the last tip at the end of this section called “Customer Value Optimization,” which is the process through which huge corporations, yes, dream big, the biggest organizations, have managed to take their sales and exponentiate them, through offers, advertising and also beating the competition. But we’ll start with the normal, everyday business tips and then put on our big boy pants:
Good customer service tips:
- Implement good customer service: studies have shown that customers will stop doing business with you if you don’t give a good experience after your initial sale. 80% have stopped their purchasing with a company due to a bad customer service experience, so offering the right services and picking a good team is crucial. Also, 80% of companies believe they offer legendary customer service, but only 8% of customers think so. How can you solve this disparity?
- Keep the relationship going after the sale: send handwritten notes or send personalized items in the mail. How many times a day do you get email? How many letters per month, much less per week or day do you get personalized mail from someone? I rest my case.
- Be thankful: Thanks is huge! No matter how they respond, thank them for being one of your first customers, or if they are a faithful customer, thank them for being a part of your company. Also send them a gift card or other freebie as a thanks for their support. Also you will want to contact them and be in touch regularly, twice a month or so, over email, through letters, through the phone, alternating which method you choose, to keep in touch and up to date.
- If possible, get to know the family: if your business is small enough, or even if it isn’t, add a personal touch by collecting details about the children or family members of the customers. They will be touched that you ask about them, and you probably will care about them a lot more as you get to know them over the years. You can also offer personalized advice on your product, depending on what it is, for other family members or even friends.
- Address any possible problems: remember going into your (nice) hotel room and finding everything you need there? Towels for the shower, towels for your hands, separate trash cans in each room, customer service on speed dial for your phone, a snack and drinks ready for you on arrival, extra toothpaste in the bathrooms and mini soaps in case you forgot. This is the idea with your product: you want to predict what your customer will need so they will be impressed that you thought of their needs before they did. Also, troubleshoot. Did you sell something that a few customers had a glitch with? Maybe the on button is difficult to find on an electronic piece and several customers had problems finding it. You can address this before the customer even buys your product by telling them where the on switch is located.
- Offers to go along with your product- if you sold them an electric mixer with a normal attachment, a few days later send them more attachments for free that will vary your blending options for different kinds of blending. If they ordered a tent, send them a free mat for the bottom of it a few days later. If they order a bag of coffee, send them a free grinder later. They won’t see it coming. You get the idea.
- Use social media and other coverage:
- Blogging: Companies that use blogging are known to generate 67% more business and potential customers than those who don’t. So start a blog, people. there are many blogging sites that will help you set up a decent, professional-looking blog for free, so take advantage.
- Other sites: think of major social media sites and how often people use the sites. Studies have shown that up to 52% of all companies marketing have found customers through these sites, simply because these sites have a lot of traffic. And a lot of traffic plus a good business idea that is before their eyes, and bam, you have yourself a customer.
- Create content on a website that people will always want: For example, many people are trying to set up online businesses since this is after all, the age of the internet. If you set up a site and company that will offer information on how to set up your online business successfully, this is content that people will want to know for years to come. This is basically guaranteeing that you have a product that people will want to know about and buy for years to come.
- Find a niche: This could be online content or a product that only a certain category of people might want, but they don’t have it currently readily available to them. Make it available, and you will have the business of this niche of people.
As an example, one online business entrepreneur started a website about how to pass an exam that architect students need to to take before getting into a good program. It is the equivalent of the MCAT for architecture students. The exam was notoriously difficult to pass, and he had never taken the exam, so he decided to start a blog about studying for the exam complete with notes, what he learned, and ideas.
He ended up acing the exam, so many people who also were studying for the exam went to the site to get information on how to pass, and they also ended up passing. Finally, others who wanted to promote the exam came to him and asked for ad space on his site. He made a lot of money through the online ads. He also made money offering coaching sessions to people who were studying for the exam. This is a great example of a niche that to this day is generating thousands of dollars a month for him.
Big Boy Pants: Customer Value Optimization
It’s the moment you’ve been waiting for. Time to put on the pants. Basically without making it too complicated which a lot of resources do, think of this as a system within a system, a funnel within a funnel. Companies such as McDonalds and Starbucks have used it to find hamburger and coffee markets and its very simple. It works for small and enterprise businesses, because it says essentially there are only three ways to grow a business:
- Increase the number of customers
- Increase the average transaction amount or value for each returning customer
- Increase the number of transactions each customer makes
Okay, here is your process:
1. Before and after- customers need to all start with Ground Zero, where they are dissatisfied in a certain area. The end goal for the marketer in the first step of this funnel is to take the customer from being dissatisfied before, to their problem being solved and they are happy after.
For example, in the city where I currently live, and the country I live in, there are no good donut shops. Everyone knows that a life without donuts is a terrible life indeed. Or maybe the only thing worse? Bad donuts. Therefore, if any average Joe were to open a donut shop, they would be successful, because people in this city are always complaining about the lack of donuts, or the bad quality of the ones that do exist here.
2. Choose a traffic source- okay, so you have decided this donut thing is going to work. Now you need to find a place where there is going to be online traffic in your area where people will see that indeed, there is a dream donut shop now available in their city. You should choose online traffic sites that already have a lot of traffic. Social media where people are already arriving and clicking. It makes sense. You can also use email marketing, banner advertising, and again, blogging. This will draw visitors into your funnel.
3. Offer a lead magnet- this could be an introductory video, but ideally you want to get your potential customer’s information here, like their email address. You do this by making your lead specific. You need to make them want to subscribe, so offer them a solution to their problem: “Get a free box of donuts to try from our town’s newest donut shop for your family here!” Then leave a space to insert their email and get a free box of donuts for their family.
4. Offer a tripwire- now, you offer a low cost item for them. Remember Starbucks with their free Frap days and 2 for 1 days? Start thinking in this direction. It could be “2 donuts for the price of one for 2 weeks.” This deal will be attractive to people and also potentially get them in for more expensive offers down the road. The same goes for E-Books, software and other products. Think when you go into the clothes store because of the $5 sales and end up spending $120 in stuff.
5. Offer a core product- there is usually a core product that the business is trying to sell. Now is the time to do so. The key here though is to not live off this profit, at least not yet. Put it back into online marketing to attract more customers away from your competitors. Many people using the Customer Value Optimization process don’t start making money until the next step in this process, which is already six steps in. And we will continue to describe it now.
6. Offer to Maximize the Profit- think Ryanair if you know the company. Yes, the airfare is cheap. Everyone loves it. But then all of those annoying offers? These are profit maximizers. They basically guarantee the profit for the company, which is why in Ryanair’s case, they can keep the flights so cheap. There is upgrading, paying for baggage and seat placements, warranties and not to mention co-marketing with car rentals and hotels. Also think premium subscriptions. For only $14.95 per month you can get unlimited flight seating.
7. Make return path- you want to have regular and targeted communication with your customers to keep them coming back. When the customer is leaving their purchase, offer them a discount for next time. Offer a loyalty program, offer for them to Like things on social media and put offers there. Keep in touch via emails and calls as well as mail. But with mail remember, it’s best not to send flyers or junk mail. Think personalized.
STORIES FROM THE REAL WORLD
How to Triple Your Sales Through Funneling: Real Life Stories
Okay, so this all sounds good to you. And you’re tired of just trying to sell a product without any nurturing of relationships and getting a small percentage return on what you do sell. Remember your school fundraisers? I remember trying to raise funds to go on a Sophomore class Europe trip and had to raise $2,000 or so for the trip. I did so by trying to sell cheese from a catalog.
I think I made $20 total from the long hours of going door to door to my friends and neighbors to try to sell cheese. Oh, and most of the $20 profit went to the cheese company. Well, now we have tow examples of how the funnel system works for real people. Forget cold calls and no return. Forget high school days. Let’s trade in a bad life story with some good ones.
EXAMPLE 1: Perry Marshall
Perry Marshall is worth researching and reading up on if you are looking into online marketing for your business. He has written several books, one of which is called “Ultimate Guide to Google AdWords.” This book alone has been the source for thousands and thousands of people in marketing their products through Google. Also Google today stands as one of if not the source for online advertising for companies and is recommended by professional marketers worldwide. Another tip for you.
So you want your particular funnel to be wanted by the masses of customers, as there are already many existing funnels. You also want your funnel to stand out in your particular niche, above and beyond possibly competing funnels in your same niche. We have also heard of thousands upon thousands of people, possibly even friends and family, who have tried to start a blog and have tried to sell ads, with negligible results.
What is Perry’s solution for this? Basically that if he has a line of products, he wants the bulk of his customers for his products to the be the same group of people. So it’s 80% of his products. For 80% of the products he puts out there on the market, he wants 20% of his customers to buy it. That means that his focus is on the 20% of customers that will be returning to buy his products.
This goes back to our principle of Customer Value Optimization, the lead magnet and tripwire. You don’t want to simply offer them a product to buy right away. Studies show that potential customers need to be presented with a product seven times before they will purchase it. Therefore you need to first give an option to subscribe or provide personal details on the landing page for your product. This shouldn’t cost anything, but will give more information about the product.
Studies also show that if you ask for the option first without making the potential customer pay, you will make twice the average amount with the offer over a 7-day period than with a simple sale. After a customer has opted in to a subscription or to hearing from you about the product or to ask questions, the average amount of time for the customer to build trust is seven days.
Exposure matters, therefore. That’s why if you see ads all over your city for a certain company or product, the more exposure you have, the more likely you are to buy the product. And if you are happy with the product you recommend it to friends. At the very least you will strike curiosity in the heart of the potential customer and that will lead them to sign up for a subscription or investigate further. This is what you want to have from people before making a sale. Interest, saturation and building trust. This is why, with Customer Value Optimization, you are spending your first profit dollars on more online advertising and social media.
Once you’ve generated enough saturation and interest, you can sell your core product. But again, remember to start small. You want to ask for small commitments before big ones, which leads to Example number 2. Me!
Example 2: Skin Treatment from $90 to over $2000 Profit from One Customer
You don’t want to just ask the customer to spend $1,000. A perfect example was one I had with a thriving skincare company. I first found an ad on Groupon for $90 to get laser hair removal. At my first appointment they told me, without getting too specific, that I might as well spend $250 and get my entire leg done rather than just the lower for $90.
I immediately saw the logic and spent that day $250 and not just $90. Then on my next appointment they told me that I will definitely end up wanting to do my whole body and not just my legs, and that the normal price for the body was over $1000, but that I could get it that day for the bargain price of $750. Of course I saw a bargain, so I bought it. And also they set me up with a regular lady doing the removal, so I started to trust her and her recommendations.
So already I had spent $750 when I originally only planned to spend $90. Fast forward a couple of treatments and they started commenting on my skincare. They said I could get a bargain on facial care that would take away wrinkles and make me look younger for $500. I accepted, and liked the outcome, so on my next appointment they told me I could get another treatment along with that one for another $500 that would double the results. Remember, I had established rapport with the lady doing the treatments, had built trust, liked the results I had before, and by all means wanted to maintain my glowing, youthful skin!
You might think I’m a sucker because I got sucked in, but I’m telling you, I am naturally a cynic when it comes to offers and also a tightwad. I like to get the maximum amount of results from the minimum amount of money spent and will look online for weeks sometimes for a product simply to save a few dollars. But this system at this clinic is so good that not only did I get sucked in, but two of my friends did as well at my personal recommendation, and they get thousands of customers a month, so many that if I don’t arrive exactly on time for my appointment, they cancel it.
It’s true! I can’t even be five minutes late because they have so many customers. So multiply the number of customers times the amount I spent or more on several treatments and do the math. These people are making a nice profit. What is the key? The hook, the $90 deal, and then gradually asking for more investment. It will work even for tightwads like me.
THE PRINCIPLES TO TAKE AWAY
Always remember that people like to make little commitments before the big purchases. So if you are asking people to subscribe to something via email, that is a small commitment. It’s free anyway. And also it makes you look better if you are not asking them to spend money right away. If you can establish trust with customers that you actually care that they are happy, then you have a much better chance of business success. In the end you will end up getting double or triple what you would have gotten by selling your core product alone.
Also remember the concept of give and take. If someone comes over to your house and brings flowers and a free dinner, you naturally want to do something for them in return, and trust in them is built. If they do something else for you a second time, soon there isn’t much you wouldn’t do or spend on the person. The same goes with business.
This leads to Example number 3.
Example 3: A Successful Sales Funnel that made $430,000 selling books along with 46,000 subscribers
How did this company generate this amount of profit through selling books? Peter Diamandis, the guy in charge, reports on the course they took.
There is a model he and his company used with many pages, and the magic is found on these pages:
Page 1: They provided an offer with an option to provide the customer’s email
Page 2: There was a book offer for a low amount of money
Page 3: This was where the customer was offered to spend more to get more product: to purchase a video and also get a complementary product
Page 4-5: Thanking the customer for the products they purchased
Remember from before, thank yous are important, more than we realize. You want to let your customer know that the sale went through, and you can also take the opportunity to offer your next product, such as a conference, and let them know you will be back in touch. Also you want to reinforce to the customer that they made a good choice so that the customer doesn’t regret making the purchase in the end.
This was also another thing the skin clinic did with me in Example 2. They said I looked great and took photos to show to other customers and asked continually if I was happy with the results and offered more if I wasn’t happy. It works every time. With the thanks you can also provide customer service options so people can feel free to contact you and ask anything they want. Also you can connect with them on different social media sites.
Pages 6-8: Now, Peter’s core product was actually worth $1000. But how many people do you think would have spent that amount out of the gate? But when offered after the previous steps, he gained many customers. Also before offering the $1000 core product he offered three complementary training videos, which builds up the value of buying the $1000 product.
Page 9: Immediately after the free training videos, you are offered to take the $1000 product. If you ask for the option, you won’t purchase straight away, but will be taken to Page 10.
Page 10: A customer service sales representative will talk you through the process to get you to buy the $1000 product.
Page 11-12: Again, remember to thank when you bank.
Example 4: If You Want to Keep it Simple
The 10 step model above is a more high-end process, but obviously produces good revenue. However, if you are looking to simplify your funnel, you might want to try this simple 3-step funnel from DigitalMarketer.com:
To acquire new prospective customers for your business, you might try one of these funnels:
- Free Book Funnel
- Trial Upgrade Funnel
- Value in Advance Funnel
But the most effective here is the Splinter Offer Funnel:
For example, if you have an entire online course to teach animation to students, break down the course into several classes that can be purchased separately, or offer courses for people who are already animators who want to refine a certain area of expertise. This will help you make more sales as the potential customer will see its possible to buy parts of the cow without buying the whole thing at once. But eventually maybe they will buy the whole thing, and spend more capital in the process.
Here you want to convert potential customers into buying customers. The idea here is that once a customer has purchased from you once, the likelihood that they will again and again goes up, and continues to go up with each purchase. Remember Example 3 when I ended up paying more each time I went in for a skincare treatment. It’s the same principle here. Some examples of activation funnels are:
- Simple Survey Funnel
- Velvet Rope Funnel
- Blog Launch Funnel
But the best offer here is the Flash Sale Funnel:
The customer in this case is going to be asking not only why they should be buying the product, but why they should be buying the product at this particular time. Maybe the price will go up, or there is a sale, or the quantity is almost gone. Think in terms of flights. Often they will advertise that there are only 3 seats left at a certain price. Or people always think they should buy six months in advance because prices will be more expensive right before the trip. You want to couple this with already existing customers rather than new ones for best success.
This is the last of the funnel triad. The goal here is to of course generate as much capital as possible. Some monetization funnels include:
- Paid Webinars
- Live Events
But the favorite here is The Magic Question Funnel:
You already have some existing customers, and you want to bring them to the point of a high-end sale, which is the furthest sale down the funnel. The least amount of customers will go for these high-end sales, but you get them by asking:
“Do you want some help?”
For example: They might need help putting together a retirement plan, or remodeling their house, or getting plastic surgery, or figuring out how to tame their pet. You can start with a video or page that explains what your high-ticket product or service is and how it is the answer to their problems. Then you can ask them to make a deposit and book a consultation for example. You can also offer it as a set of several payments to break up the payment with an overall high-end ticket price. But remember, this is the bottom of the funnel! Don’t offer this to first-time buyers. Start small.
This process is a bit simpler than the more complex example used by Peter Diamandis to sell his books, and you might want to try this funnel if you are a first time marketer or if you are trying to set up your first business. But obviously, all of the examples yield real results with enough time and effort. Now on to our final aspect of the funneling process. Measuring results to yield greater future profit.
SALES FUNNEL METRICS
Again, there are many sites on this subject, so here we will try to simplify and consolidate the processes used to give you an understanding of what and how to measure your business results. This stage can also be described as another part of the Action Phase in the Sales Tunnel process.
Here is an example of sales funnel metrics:
You will notice here that some of the things measured are the individual seller’s statistics vs. the company average. In this graph they measure everything from qualifying customers to introducing a trial to negotiating a sale to getting a verbal commitment from a customer to sealing the deal. All of these factors are worth measuring on the individual to the company level to find out how much revenue you are generating per customer, how many actual customers come out of contacts, and more information.
A question top marketers might ask is how do the top 20% of performers in marketing do it? And if there is an answer, which there is detailed below, this is probably something you will want to know going into the start of your business funnel. Is there a metric system that can result in good alignment between the marketing and getting sales, and in the end generate more revenue?
You will want to look at several main metrics:
Amount of Money Made Per Customer
You want to know how much money you are making with each customer and measure that, because it will tell you both that you are successfully attracting customers and getting them to buy products.
You do this by taking the amount of money made and dividing it by the number of customers made during say, a month’s worth of time, or any other period of time you choose. If you get so many customers during the first week of a quarter and your average rate is for two months, then you can look at the amount of money made in that quarter and divide it by the number of customers.
This will tell you how you’re doing as far as how much money you are making, and also help you get the productivity of one customer service representative. It also helps you find out that you’ve gotten more or less numbers of customers from month to month, and you can measure if increased number of customers are actually helping generate capital as well, making them customers that are actually making you money.
Conversion Stages in The Funnel
Instead of looking at all of the sales funnels separately, you should look at one big funnel and find out where opportunities are therein. Sometimes your customers will buy your product, or might buy several products, but then they end up leaving and no longer make purchases. This metric can help you find where in the funnel marketing might help and prevent people from leaving. You can find what points in the funnel that customers are meeting with friction and leaving and try to fix that error through further marketing attempts.
For example, you can find out where the customers are flying off of the funnel with historical data that shoes where the sales are struggling, and then find out how to meet the customer’s needs at that point so that they want to continue coming back to buy from you. If your customers are all leaving at the place where you offer your high-ticket item for example, find out what the glitch is. Is the price too high? Do you need to make more offers first? Should you splinter the offer into smaller, more palatable offers. Do you need to change the offer itself to better help the customer?
Looking at these points will help future marketing efforts to find a solution to better convert the percentage of opportunities into more sales. These metrics will help take out the guesswork and pinpoint where the efforts need to be made. You can also find out where the marketing isn’t working, or that the value of the product combined with what you’re communicating about it isn’t enough. Or that representatives who are selling your products aren’t adequately spending enough time describing the product, its assets, and answering questions.
It is best for you to focus your time and resources available on your weakest points. That means using the metrics to find where you are making the least amount of money with customers and trying to figure out the problem at that point and solving that problem. This will better ensure the least amount of customers from falling out of your funnel. Also once you have made successful sales, you will want to look at what made the sale successful and how to keep generating the income you’ve gained through the successful part of the funnel.
For example, if you see that customers are consistently buying your three-part coaching series on how to best train your dog, you may want to look at why these training videos are successful, possibly taking inventory from customers themselves about what they are getting from the videos. You might also want to build sales points from there, offering more videos for free, then leading them to higher-ticket items from this successful point if you are having trouble getting customers to commit to a higher price at first. If they like the lower-priced items and have established trust there, they will be more likely to pay a higher price for more services.
Using Marketing Means in Selling Products
We have already talking about how marketing is important in your sales funnel, so now we will give a list of the types of sales content that the marketing efforts should entail and how they can get metrics from the sales by using a matrix that scores the content of the sales.
Your future marketing needs to get a good survey from the sales generated from your products in order to decide how to market your products in the future. Then you will have valuable information to garner when you are deciding. here are some steps:
1: Type up and send a digital survey with simple but exact questions about your most recent piece of content.
2: Ensure that you have enough time between distributing the content and being able to use the content when you are in the sales process.
3: Make sure to use the marketing that you are providing to bring your sales up a notch, and always remember to get feedback!
4: Learn and use new content to help you market, know what others are using and what is just starting and what is working with other companies, and how these marketing tactics convert into sales.
Metrics And Rethinking How We Do Them
We have now established that it is important to get metrics for the future growth of your company, and also can note that the most important information to gather is what will make the most revenue per customer and also keep customers coming back for sales rather than falling off the funnel. But perhaps the most important thing to measure is the weakest points of your sales paradigm and where to make changes to establish more solid customers and also more solid revenue, while at the same time measuring the strongest parts of your structure and perhaps building more sales on the foundation of your strongest point to establish more strength in the weaker points of your sales.
This is why the example was given with the successful training videos. If you use metrics and find that this is the strongest point of your company that has generated the most revenue, find how to build on that to get more customers viewing the videos to begin with, and once they have, how to convert these into your higher-ticket sales to make them more lucrative.
So we see that to be in the top 20% of companies, you must see growth in sales and revenue made per customer. And now you have the best metrics to measure, so you can track them to be part of the top 20%. And who doesn’t want to be in the top 20%? I’m sure you’re probably thinking “I’m happy to sell anything at my first attempt at a business. But if you have come to this article and read it all, you are much more well-armed than the average person trying to start a business, and so why not aim higher out of the gate?