What Is A Sales Funnel?

What Is A Sales Funnel?

What is a sales funnel? And how do they work? You’ve likely seen a sales funnel before. You were probably sucked into one like a vacuum. Sales funnels are captivating. Magical. They’re like money-printing machines. But what are they really? And why do they work so well? In short, a sales funnel is a process. It’s a journey the customer embarks upon.

A sales funnel takes an individual who is completely unaware of who you are on a journey. Someone who has no idea what you do or what you offer—cold traffic. It takes that person from ice cold and completely unaware to hot and ready to buy whatever it is that you’re peddling. But how? How do sales funnels work so well? And how can you actually use them in your business to make money?

Sales funnels are not mystical creatures. They’re not something out of a science-fiction tale. They’re real. Concrete. And they work like clockwork. They’re easy to understand. And even easier to build. But there are layers to sales funnels. And like an orange, we can peel each layer back to reveal the secrets behind what makes sales funnels so effective.

But before you embark on building a sales funnel, you must understand how they work. And I mean implicitly. Although the concepts are simple, the approach is multi-layered. Think about it this way. People don’t like to be sold to. But they like to buy. And when you do it the right way, a sales funnel can dramatically reduce the friction in the buying process.

How Does A Sales Funnel Work?

Let’s peel back the layers. On the outside looking in, a sales funnel is simple. It has a single path forward for a prospect to take. That means there is only one action. One choice. No forks in the road. You either take that action or you leave. Think about that for a moment. There’s no overwhelm. You’re not facing multiple options or various menu items. Nope. Not one bit.

The reason why sales funnels work so well is because of this singular approach. Not websites. Websites have many choices. And sending cold traffic to a website is a death wish for your business. If you’re doing that right now it’s time for a change. That’s because sales funnels convert at 137% higher, on average, than websites.

It’s okay to have a website. But it’s questionable to not have a sales funnel. Sales funnels are simple. Some would even call them basic. That’s because they’re straightforward and to the point. Think about it this way. Some people never really tell you what they want. They beat around the bush, never getting to the point. How well do you think those people do in life?

When it comes to sales, you should be direct. People who aren’t direct are afraid of failure. That fear holds them back in life from achieving the things they want to achieve. But a sales funnel doesn’t mess around. It asks the visitor to complete some action. Otherwise, they’re free to leave. And that’s why a sales funnel works so well.

Understanding Traffic

Before we peel back all the layers of a sales funnel, you must understand traffic. Traffic equates to the people who visit your landing pages or sales funnels. There are different types of traffic and different temperatures of traffic. Think about it this way. Traffic can come from lots of places. People can find you on social media, read your blog, see a video you made, get served an ad, and so on.

You don’t control all the types of traffic that show up. But you must capitalize on all the traffic that arrives. How? By building a sales funnel to capture that traffic. For example, if someone sees a post you make on social media and views your profile, they’ll likely click your link. That link should not go to a website. It should go to a lead generation funnel such as a hero funnel.

A hero funnel (or hero page) allows you to capture traffic you don’t control. And you should always have some form of lead capture for the traffic that shows up regardless of the type. Because, once you capture that lead it’s a different ballgame. You now own that traffic. And the traffic you own is incredibly valuable.

Traffic You Don’t Control

The first type of traffic that can show up in your sales funnel is traffic that you don’t control. They’ll find you randomly on social media platforms, through a video, a blog post, and so on. They’ll click through on a whim. You have no say over when and how they arrive. That’s why it’s traffic you don’t control. Traffic you don’t control is usually cold traffic. That means they don’t know who you are.

Traffic You Control

Traffic you control is the traffic you pay for. When you run an ad you control that traffic. You pay some money to the various ad networks and you create an ad that’s shown to people. You target those people based on the criteria for your business or your offers. You can serve ads on many platforms today. But when a person clicks that ad and shows up, you control that traffic.

Traffic You Own

Your goal always should be to convert traffic you don’t control and traffic you do control into traffic you own. That’s one of the fundamental principles of a sales funnel. It’s a conversion mechanism. And rightfully so. Sales funnels, on average, convert 137% better than websites. Yes. They’re that powerful. Especially when used the right way.

Traffic Temperature

Three different traffic temperatures exist. These three temperatures are important within the framework of a sales funnel. Why? Because you wouldn’t speak to someone who is completely unaware of you the same way as you would a close friend, right? If you do that, your conversions will falter. Instead, you must build landing pages based on the traffic temperature.

For example, let’s say that you have an email list. These are people who’ve already shown an interest in you and have given you their contact details. In exchange, you likely gave them some value. Maybe you gave them a lead magnet. Maybe it was a free consultation. Whatever it is, they now know who you are because they’re on your list. You’ll speak to those people differently than you would someone who has no idea who you are. That makes sense, right?

Cold Traffic

Cold traffic is an audience that is unaware of who you are and what you offer. They might be aware of the problem they’re experiencing. But they’re still unaware of you. And as such you must communicate with cold traffic differently. Since they’re more aware of the problem, you should use the problem as a starting point. After all, they don’t know you or what you’re peddling.

The ability to convert cold traffic into warm traffic isn’t magic. But those who can do it can command endless amounts of money. Keep in mind that it doesn’t happen overnight. Where most people fail to make money online is by trying to go for the jugular. You might get a few conversions by asking for the sale right away. But you won’t get many.

According to many statistics, it takes a person about 7 interactions before they’re ready to buy from you. That’s why a sales funnel is so powerful. It moves them through those interactions by taking them through four different stages. They go from awareness to interest. Then from interest to desire. And from desire to action.

Warm Traffic

Warm traffic is an audience who is aware of you but likely not aware of what you offer. They may have expressed an interest and even exchanged their contact details for a valuable lead magnet. They’re warming up to a purchase. But they might not be there just yet. Your job is to communicate with those people in a way that gets them to better know, like and trust you.

You communicate with warm traffic differently. For example, if you create a landing page targeting warm traffic, it should sound different than a landing page targeting cold traffic. That’s because the warm audience knows who you are. You also communicate with warm traffic through emails by sharing stories. Stories are the secret sauce to moving people from warm traffic to hot traffic.

Hot Traffic

These are your buyers. They’re people who know you and have purchased from you. They’ve bought your offers and as long as you give them a lot of value, they’ll want more. When you structure your communications and funnels the right way, you can continue to ascend hot traffic to sell them more and more expensive products and services.

Peeling Back The Layers

From the outside looking in, a sales funnel looks simple. But when you peel back the layers, you realize that it’s far from simple. There is so much going on there behind the scenes. Lots of thought goes into creating a sales funnel that speaks directly to an individual who is experiencing a problem that you can solve. That doesn’t make it easy.

Sales funnels can have many pages. Each page has a specific function. Some are designed to capture leads. Others are designed to fill out applications. And others are built to capture the sale. Then there are upsells and down-sells. But the important thing here is the landing page. The landing page is the page that a person sees when first arriving at your sales funnel.

Landing pages are the heart of the entire sales funnel. And they must be designed and built the right way. It has to speak to the individual and the problem. It must create curiosity by using a powerful hook. And it must wield the power of stories to engage a prospect and get them to take the next step in the process.

#1—The Individual

At the very foundation of a sales funnel is the individual you are targeting. You can call this person your dream customer. It’s the foundation of your funnel because everything you do and say within that funnel must speak directly to this person. When they visit that page they must feel like you are speaking directly to them or to their problem.

Your dream customer might be completely unaware of who you are and what you offer. But they are aware of the problem they’re experiencing. But your ability to eventually sell whatever it is that you’re selling has everything to do with knowing your customer inside and out. Take the time to learn and understand who they are. It’s the basis for everything.

#2—The Problem

Beyond the individual is the problem they’re experiencing. Knowing that problem inside and out is key. And knowing all the secondary problems is also important. Meaning that if you solve one problem, others might pop up. But there is always one core problem. For example, that problem might be a money problem, a health problem, or a relationship problem. Whatever it is, you need to know it implicitly.

Knowing the problem is important because you can use that knowledge to get inside the prospect’s head. That’s because every problem causes some form of pain. That pain might be actual pain or perceived pain. Either way, people do not like pain and they want to move away from it. Your sales funnel should offer a solution for that pain.

#3—The Offer

The offer is the solution the person is searching for. The better your offer is, the more likely your sales funnel will sell and convert. But the offer has to be so good that a person feels stupid passing it up. Meaning that it must offer so much value that it’s a no-brainer. Your entire job is to make an offer that blows their mind. We call these irresistible offers. And they catapult your business into the stratosphere.

Offers have many components. And you should learn how to build a killer offer. Because that really is the basis for your success. Offers should not only solve the core problem but also the problems surrounding it. They should stack up the value and provide risk reversal. Offers should include social proof of others who’ve succeeded with that offer. And so on.

#4—The Communication

Your ability to communicate is a key fundamental principle of the sales funnel. Communication happens at every stage. It happens on the landing page when they first arrive at a sales funnel. It includes things like the headline (or the hook). It happens in the communication once someone lands on your email list. It’s the story-selling and your ability to build rapport.

Communication relies heavily on copywriting. If you’re not a good copywriter, hire someone to help you. Your copy is the basis of your content. And content is king. It can either make or break you. You must communicate effectively. And the prospect must not only feel like you understand their problem, but that you have a solution that will actually solve their problem.

#5—The Design

Although most people think that design is secondary and that ugly funnels do still convert, design is still fundamental. Design has a lot to do with layouts and fonts, button colors and sizes, placement of images, and so on. If you don’t have a keen eye for design, hire a funnel designer. It’s not the most important thing on the list but it does still count.

The best part? You can easily design your sales funnel using a drag-and-drop editor and premade templates. It’s not too difficult. You can also purchase pre-made designs from the funnel marketplace. Once you’ve addressed the first four elements, focus on the design. And test everything. You’ll never really know what converts better until you test.

The Value Ladder

When you take a sales funnel and flip it on its side you get something called a value ladder. The value ladder is not a sales funnel. But you can think about multiple sales funnels stacked up a series of rungs on a ladder. They’re not always separated. Sometimes you can combine a lead generation funnel with a regular sales funnel.

The whole purpose of the value ladder is to stack funnels together in a chain of value. Every rung up the ladder provides more value. And it provides more opportunities for the customer to spend money. At the top of the value ladder is your most expensive offer. This is the offer that delivers the highest value. It could be coaching, consulting, a mastermind, a high-ticket service, and so on.

How To Make Money Using Sales Funnels

The way to make money with sales funnels is to first generate leads and then qualify those leads as buyers. This should happen relatively quickly. Meaning that you should be able to make a low-ticket sale within the first few days of generating the lead. If not, it should even happen out of the gate through a two-step tripwire offer that delivers a massive amount of value.

The beauty of two-step tripwires is that it saves the person as a lead in the first step. This way, if they don’t continue with that purchase, you can still communicate with them. It’s almost like fusing a lead generation funnel with a sales funnel. This is great for low-priced offers anywhere from $7 to $37. They’re called tripwires because they often lead to a purchase.

This is your front-end offer. It’s not your high-ticket offer. The front-end offer is used to get a foot in the door with the customer. Why? Because of the law of continuity. A person wants to stay aligned with their actions. Meaning that if they bought from you in the past they are far more likely to buy from you in the future. That’s why low-priced offers lead to high-ticket sales eventually.

As long as a person receives a lot of value from your front-end offer, they will be willing to ascend the value ladder and buy the more expensive items. That’s because they know they will receive more value the higher they go. A person might purchase a free-plus-shipping book offer from you and then want to join a coaching program afterward. That’s the beauty of front-end offers when done the right way.

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