How exactly do sales funnels work? This is something that causes a lot of confusion. Let me just give you an overview. The principle behind a sales funnel is to build trust. Trust in you, trust in your products or services, trust in your ability to deliver on time and perhaps most importantly, trust in your ability to provide value for money.
Let's take a look at a typical sales funnel. You are going to start off at the top of the sales funnel with a freebie. A free giveaway to get people to sign up to your mailing list. Then you are going to sell them a lower priced item. Then a mid-range item, then a high priced item. A higher priced item and then finally a very expensive item or an expensive service. As the people go down the sales funnel they build more and more trust in you. They are more and more likely to move up to the next level and you can sell them more and more expensive things, expensive items, expensive products, expensive services, that sort of thing.
Let's look at how this works in some detail. I'm going to assume that you are in the internet marketing niche.
Let's look at the top of the funnel, your freebie. Your freebie is usually a free report or an eBook. You use this as an incentive to get people to sign up for your mailing list. People come to your website, they sign up and they get this free eBook or this free report and that got them on your list and into your funnel. It must be high quality and this is something very important when you are first starting out and you want to make sure that everything that you provide is of the highest quality. It must be of high quality.
It should be something that you could command a good price for if it was sold. It's something that has a high perceived value, something that's worth money but you are giving it away for free. It should contain useful information that your customer can start to use right away. Something else that you can also do with your free report is to include a clickable link to your website and give away rights to it. That way if people share it, then the report can also be a useful traffic generator because people will see the free report you've given away, they'll see the link to your website in the back of it and through curiosity then they come and visit your site.
Once you've got them signed up for the free reports and you've got them on your mailing list, the first thing that you are going to offer them is a lower priced product. It's usually an eBook principally because you can deliver it digitally. This lower priced product should contain a lot of information, and it should be of reasonable length. Twenty pages of A4 rule letter size is a good rule of thumb.
You want to really over deliver on this because the idea is that you use this to showcase how good the rest of your products are, so when people buy your low priced products, they are completely blown away by how good the quality is and so they go ahead and buy something more expensive from you. You want to keep the price fairly low but not so cheap as to make people think that it's not likely to be any good. Sometimes people will look at something and they'll think, "That's so cheap, it's got to be rubbish." Where in fact, it is actually good quality.
You don't want to make it too cheap but you don't want to make it too expensive either. Usually, something like $9.97 or something similar is a good price for your low priced product because after all, under $10, people cannot think twice about spending that sort of money. Also, you want to offer a money back guarantee so that people do buy your low priced products and they don't like it, then they can get a refund from you. There is no risk attached to it.
Then you sell them your mid-range priced product. This is something that's slightly more expensive than your eBook. It can actually be an up-sell to your low priced product. Once someone has bought your low priced product, you immediately offer them this mid-ranged product, right away and offer them perhaps at a discount of what you would sell it if it were a standalone product, because you see, once someone has bought something and they are in buying mode, they are much more likely to make an additional purchase. A video version of your eBook is a popular choice at this level.
It should be low production values, just text, and graphics with a voice over. You can use software like PowerPoint to make the slides and Camtasia to do the recording. It can actually be the exact same stuff that's in your eBook but just turned into a video. After that, you are going to offer them a high priced product. This should be not immediately afterward but after a reasonable period of time, because with your high priced product, now you are really starting to make money. Courses and training products are popular at this stage.
These should be a combination of text and video. They should be well researched and well presented, and again you want to over deliver on all of this. You want to make sure that there is a really outstanding value for money. These training courses should have higher production values than your eBook and your previous videos. You also want to include plenty of bonuses to add even more value. Then the next stage in the sales funnel is the higher priced product. Again, this is a much higher price point than the previous items.
The thing is, you'll find that not so many people will purchase at this stage but you'll be able to charge considerably more. Make a virtue of this by limiting availability to create scarcity and add more value. Telephone coaching is popular at this level and this can be a group conference call or it can be individual coaching. What you can do is you can record the calls and offer the recordings as a down-sell. You can record them in mp3 format and then sell that as another product, as a slightly lower price, to people who perhaps didn't want to spend the money on your high priced product or the people who couldn't afford it but they can still get the benefits from that, but it's just simply not live and they are not actually talking to you. They are just listening to the recording.
Finally, you have your expensive product or service. This is the end of your sales funnel. You'll probably only sell one or two of these but you can charge a premium price. Because this will likely be time intensive, you won't be able to offer this to too many customers anyway. Popular choices at this stage include mentoring, one-on-one coaching and ongoing consultancy. You have to bear in mind that people will drop out at every stage.
A lot of people are going to buy just your lower priced items or your mid-range items. You may find that you hit a plateau. You may find that nobody is going to buy your more expensive stuff. You might find that you've got a good market just selling the lower and mid-ranged price items, which is fine. You know then that you can keep churning out these products, keep churning out these services for that particular market over and over again all day long. Your sales funnel will grow and as it goes along you can put your prices up and start to make even more money.