What's A Sales Funnel?
According to Wikipedia, the purchase funnel, or purchasing funnel, is a consumer-focused marketing model that illustrates the theoretical customer journey toward the purchase of a good or service.
For online business owners, 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 funnel.
Next, is an attractive offer that requires the lead to provide you their email address. You’ve probably seen this type of offer on websites all over the internet, and probably even signed up for some (I’m addicted to them myself and have a nicely organized collection of them). This is usually a free eBook or guide, a video series, checklist, workbook, or other valuable content that is available in exchange for “opting in” to an email list. This is also called a “lead magnet”.
Once you get someone on your mailing list, you can then present the reader with a series of low-cost offers that would entice them to make a small commitment. Perhaps you have a low-priced ebook or a trial membership or templates you want to sell.
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 Funnel Works
If you imagine your funnel as looking like, well, a funnel, it is easy to see that your free content—at the top—is consumed by the largest number of readers, that’s why it's important for this to be interesting and provide some value. 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 most loyal 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.
Most new—and even established—business owners can easily envision the top of the funnel, but if you truly want your business to grow, you must master the entire process, and that starts with understanding what a funnel really is and how it works.
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