What is a Sales Funnel, Anyway?
For 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.
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 sales 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 on your mailing list, you’ll then present your readers with a series of low-cost offers. Perhaps you have a low-priced eBook or a trial membership.
Customers who purchase your low-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 Sales 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 loyalest of fans and customers will purchase your highest priced offers.
Your job, as the business owner, is to ensure that your funnel leads buyers naturally from the top, free offers all the way to the bottom. The more buyers you can keep in your funnel, the more money you will make. You may also be interested in reading my article on flipping your sales funnel.
Most new—and even established—business owners can easily envision the top of the funnel, but if you truly want your business to grow, it is imperative to understand what is a sales funnel,and to master the entire process. That starts with understanding what is a sales funnel and how it works.
I’m author, publisher, and entrepreneur Connie Ragen Green and would love to connect with you. If you are new to the world of online entrepreneurship please check out my comprehensive training on how to set up Funnels That Click and learn how to gain an unfair advantage when it comes to building a lucrative online business.
Hi Connie, you are exactly right! I had no idea what a sales funnel was. I thought is was just having multiple streams of income. But I now realize that funnels take it to the next level. Sales Funnels are the gradual drawing into your top market space with the intent to flip it so that the widest opening is full of your top sellers instead of at the smaller end of the spectrum. The drawing is for everyone but as they delve deeper into the products the value increases as well as the prices. This makes perfect (cents) and dollars 🙂 I now have a much clearer perspective on how to market my products. Thank you for the valuable information!
You are most welcome, Sandi and I’m glad this information is helpful to you. My “Funnels That Click” training goes into the details of how to set everything up for maximum profitability.
Connie Ragen Green
Great explanation of a simple sales funnel. I look at it as a process to keep your prospects and customers engaged with your business. Rather than just hoping that they’ll buy something from you “some day” it’s a way to provide various options to your subscribers. In addition, there are more complex funnels that “shuttle” prospects to buying alternatives, cross-sells, down-sells, and additional free resources when they don’t purchase from an offer in the funnel. Anyway, thanks again Connie for the article.
Thanks for a great article. I’m still working on making a sales funnel, so these insights are helpful.
Hello Connie,
I just bought your “Funnels That Click” training to understand how funnels truly work. I have a conceptual understanding of this that I have yet to implement. Knowing how creative you have been at leading your customers toward some specific actions make me want to learn more from you.
My question is – when people get into your specific funnels, what do you do with them? Are they included in some kind of list? How do you engage with them? What kind of treatment do you apply?
Concepts are easy to understand and many people say tasks are easy to do; however, what they don’t really tell you is what happens behind the scenes.
Thank you for this substantive post. I’ll get deeper into the topic of funnels through your training.
Maria
Hi Maria,
You are on my list so you are experiencing my sales funnel firsthand. Engagement begins when you hit “reply” to one of my emails, leave a comment on one of my posts, or click to look at and hopefully purchase one of my products or an affiliate product I am recommending. Then I respond, first in writing and later on a call so that I can find out more about you and how to best serve you as you work to achieve your goals and dreams. The sales funnel takes many twists and turns along the way, with the ongoing result being that you now feel like you have a mentor who care about and understands you better regarding the business you are building.
Connie Ragen Green