What Are Sales Funnels

What Are Sales Funnels

In this article we’re going to discuss exactly what are sales funnels and why you should be using them in your business. Believe it or not, you see them everyday but you may not recognize them.

No matter what it is you’re trying to sell a sales funnel is the number one way to do it. This is the most systematic way to build trust, to build a relationship and to encourage people to want your brand before making a sale – and it is incredibly powerful when done well.

So what exactly is a sales funnel? How does it work? And how can you tap into its power for yourself?

In essence, a sales funnel can be imagined like a funnel for customers. You start out with a broad opening to capture as many leads as possible and then you gradually narrow those leads down to only the most engaged and interested customers so that you can sell to them.

All the while, you’ll be building trust, building engagement and priming them ready to make a sale.

You can also think about this as a funnel you use for putting oil in your car. You put all the oil in the top of the funnel which would be all your potential leads, then it pours down to the engine which is you making a sale. There are different stages in this funnel which we will go over.

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 advertisement, or a blog post and then move on to an email list, then a ‘free report’, then a seminar, then a small product sale and then a big sale.

Each of these marketing stages is meant to build a relationship and trust, it moves your potential customers a little further down the funnel. Each time a visitor clicks on the next link, or follows you to the next step, they are becoming more and more likely to buy from you.

Sales Funnel Example

As mentioned, there’s a good chance you’ll have encountered different sales funnels in your travel around the web: and you may even have bought products from others through this method.

You might have come across a blog and signed up to the mailing list for instance, and then been told to click on the link therein in order to see a free seminar. And then maybe the free seminar asked you to sign up for the next seminar which would cost a little money.

And you may have come across it on YouTube too. For example, Tai Lopez is something of an inscrutable business man who is willing to use everything at his disposal to capture new leads and sales – even when that involves a bit of bare-face lying (that’s not his car and not his garage!).

But he still employs a sales funnel very well. If you go on YouTube to watch a video, his ad will very often show up. The guy then goes on to talk about his cars or his massive house and this makes you want to watch – even if only because it annoys you.

At the end of the video, he offers to show you how to get his three most important tips for making money. 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’.

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, Tim Ferriss and Pat Flynn. And it’s exactly what you should be doing if you want to make sales.

Note that this doesn’t mean you have to con people like Tai! But the dude does create a great funnel and you need to think about your marketing strategy in steps and stages and understand the psychology of the way you’re dealing with people.

Understanding Your Sales Funnel

Imagine you have a fitness site, people are typing in ‘fitness tips for women over 50’ 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 future – but as you will point out, they can always just unsubscribe if they don’t want to hear anything more from you.

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 on an automated basis that invites them to an exciting free conference 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 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.

After your free seminar, 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 $5 to $50 but what it’s doing is demonstrating that they can buy from you and trust you.

Learn more about: What Are Lead Capture Pages

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, one of the biggest ‘barriers to sale’ is risk. People are naturally risk averse and they hate the idea of handing 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 a large amount of money is going to be very hard. But now sell them something for $5, 10, 20 or 50 bucks 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 or $50 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.

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 big 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.

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.

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 being a part of 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!

What Are Sales Funnels – Conclusion

Hopefully you now understand how a sales funnel works and why it’s such an important tool for maximizing your sales. Understanding the concept is the hardest part, actually seeing it in your mind.

Creating the sales funnel is not that difficult but if you need any help just let me know. If you’re totally new to designing capture pages and building funnels then reach out and I can share some tips and help you thru the process.

LeadPages is a great company to use for setting up your landing/capture pages. There are others such as Clickfunnels, GroovePages and Thrive Themes but if you’re starting out LeadPages is more cost efficient and you still have all of the tools you will need.

As of this writing LeadPages offers a free trial and they also have a free guide to landing pages.

If you liked this post make sure to leave a comment or share with your friends. If you would like my more detailed report on sales funnels simply click the banner below.

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