Sales Funnels 101: The Mechanics Behind Selling Online

15 min read

Anyone who’s mildly interested in business needs to understand the concept of the sales funnel. But what are sales funnels and how do they work? In essence, they’re automated sales processes configured to increase sales and conversions. At the end of the day, sales funnels offer the path of least resistance and highest probability to growing and scaling a business fast, no matter the present size, industry or niche it’s in.

Sales funnels are also quite possibly one of the most important concepts in business.  They help you sell on autopilot. They can take your company from zero to hero in lightning speed. Think weeks and months as opposed to years and decades. That’s how important they are. Thus, by understanding and wielding prowess over this single business concept, you can literally hop on your own personal rocket ship to the moon.

However, before you get ahead of yourself, you have to understand some of the underlying psychology that drives people to buy. Keep in mind that almost no one wants to buy what you’re selling. They just don’t. Your success depends, not on them wanting what you have, but on your ability to influence them in a way that will get them to buy. To do that, you need a sales funnel. That sales funnel will help you influence your prospect’s decision to buy whatever it is that you’re peddling through the fervent powers of persuasion.

The Psychology Of Selling

Tony Robbins says that all human desire is based on one foundational principle. That principle states that we will always do more to avoid pain than we will to gain pleasure. The best marketers in the world understand this principle. They work to invoke pain and pleasure in all of their marketing. The best are able to strategically interweave these into their pitches and sales letters and sign-up forms.

This principle of pain versus pleasure can easily be leveraged by positioning your products or services in the right way to help leverage this strategically. When you think about pleasure, you can also think about the benefit. What’s the biggest benefit (pleasure) that a consumer is going to get when they buy what you’re selling. You also have to think about what they’re going to avoid (pain).

You can do this both in your headlines and in your copy. In fact, the better you do this in every stage of your sales  funnel, the more likely you’ll be to sell fast and furiously. If you don’t properly leverage this principle, then selling will become excruciatingly difficult. One quick way to audit your sales funnel is to ensure that you’re qucikly presenting prospects with a big benefit while also helping them to avoid pain.

This starts with the headline and weaves its way into the copy. Keep in mind that the average attention span for a consumer these days is 8 seconds. That’s down from 12 seconds at the turn of the century. The fact that we have a very short attention span should be no surprise to anyone. Thanks to the rise of social media and smartphones, we expect real-time access to everything and anyone, no matter where live or what we do for a living.

However, that also adds to much of the confusion that clouds selling. The art of persuading a prospect to buy from you is one that’s been long-taught by hardcore direct-marketing professionals. But it’s also something that isn’t always directly replicable unless you understand both the art and science of selling. When you only understand one side of the equation–either only the art or only the science–selling is excruciatingly difficult.

The Art & The Science Of A Sales Funnel

When you look at how sales funnels operate, it’s clear that there’s a science to it. It’s a science based on traffic, leads and sales. It means a deep-rooted analysis of conversions and understanding where the customer came from and how far along they got in the funnel before either dropping off or successfully completing the sale. Of course, there’s also the science of configuration in funnels. How well is the landing page (squeeze page) configured? How much does the copy or headline appeal the audience? And so on and so forth.

But there’s also an art to sales funnels. That art invokes an age-old skill that dates back to the beginning of our species–storytelling. Just how well you can pitch a story within the framework of your sales funnel will ultimately guarantee your success or failure. If that story doesn’t fit into the framework of your sales funnel and it doesn’t appeal to the target market, or if the offer is simply not an irresistible one, your efforts will falter and fail.

So how do you position a story within the framework of a sales funnel? And how well do you use two underlying concepts to sell, sell, sell–urgency and scarcity. The difference between the art and science there is whether you use fake urgency and fake scarcity, or not. How legitimate is your so-called, irresistible offer? Does it really expire or fill up? Remember, people know the difference between fake and real urgency and scarcity.

Urgency And Scarcity?

Two fundamental concepts in persuasion selling are urgency and scarcity. Why? Because, we want what we can’t have or can only have for a brief period. That’s just human nature. Once we know we can easily have something, it becomes less attractive to us. However, when something is very difficult to acquire, it becomes far more valuable in our eyes. Even if, in the real world, it’s not that valuable, to us, it becomes that way when we know it’s extremely difficult to attain.

Think about the diamond for a moment. Diamonds are rare. But so is gold. That’s scarcity at work. The more scarcity there is, the higher the price. There’s a direct correlation there. That’s also true with urgency. When a sale is going to expire, for example, very soon, we’re more inclined to purchase something. Even if we don’t need it at that moment. There’s major urgency at play here. That’s why you always see sales that are for a “limited time” because it just works.

When it comes to sales funnels, the better you can use urgency and scarcity to combine it with your irresistible offer that appeals to your target audience, the better you can sell. Yes, it’s a science and an art. Because, conveying that urgency and scarcity, and properly configuring the elements of a funnel such as the landing pages and up-sells and down-sells and one-time offers, has a lot to do with both the science and the art of the sale.

Effectively, when something is urgent, it’s time-based and that time is going to run out. But something can’t just be urgent without it being important to the target audience. No one will see the value in something that they just don’t need if you market it incorrectly. For example, you wouldn’t have an important or effective offer if you were selling life insurance at an amusement park. You just wouldn’t.

However, if you were selling helium balloons, you might have something important. Once you have something important that’s of value to the target audience, then you can make it urgent to buy. But without that, there’s no chance. Similarly, something can become scarce if there’s only a select number left. But you can also use time to make things scarce. For example, you could open up an offer for only 7 days and then shut it down. That would give you real-world scarcity.

These two concepts should become your best friend and you should search for every single example you can find about how you can effectively use urgency and scarcity in your offers to make your prospects salivate over them. Now, you have to start with an irresistible offer. But when you combine an irresistible offer with the concepts of urgency and scarcity, you could take the sales rocket ship to the stars.

Here are a few statistics about urgency and scarcity that will likely get the wheels turning in your mind:

  • Urgency results in a 59% higher transaction-to-click rates and effectively double the rate compared to emails that were “average” and didn’t use urgency
  • Urgency used in the subject lines of emails increased sales by 16% (i.e. limited time offers and expiring discounts)
  • Colors like orange and red are used to persuade more people to click
  • Count-down timers are very effective in conveying urgency in sales better than almost anything else and create a sense of FOMO (fear of missing out) that often gets a majority of people to act
  • Urgency is more effective when instructions are given on precisely what actions you want the prospect to take

Using Persuasion Effectively

Persuading someone to buy something isn’t always that easy. You need to establish things like rapport with the prospect. The better they get to know you, the more likely they’ll be to buy whatever it is that you’re peddling. The better you are at persuasion, the more likely you’ll sell, not just one time, but repeatedly. You do this by creating raving fans and a devote following of hyperactive buyers.

But instilling persuasion in sales funnels isn’t always straightforward. How do you persuade someone to buy something if they just found you? The short answer? You can’t. That’s what follow-up email sequences are for. Now, there are some exceptions to the rule. If you have an irresistible offer or you effectively use the power of ‘free’ to fuel the front-end of your funnels, you could easily break even.

Sometimes, persuasion works that way. But also, when you get someone to spend just a little bit of money with you (in the case of free-plus-shipping offers), they’re more likely to keep spending. And, if you effectively combine a very relevant one-time offer or up-sell with that irresistible, free and tangible, offer, then the sky really is the limit. That’s why so many people do tangible free-plus-shipping offers these days. Because it works.

However, persuasion doesn’t just work by offering something for free or by building rapport. When it comes to a sales funnel, the more social proof you have, the easier the sale will be. If, for example, you have 50 authentic videos of people claiming how much your product or service has helped them, closing the deal will be easier. If you don’t have that, it doesn’t mean you can’t persuade someone to buy. It will just be a bit harder and take a much longer email sequence.

However, persuading someone to buy is also about getting them to make small commitments. By agreeing to these so-called micro-commitments, you’re training a prospect to do certain things like click on links or fill out forms and so on. Now, there’s a very important rule in persuasion that states that if you can get someone to do three small tasks, they’ll almost certainly agree to do the fourth.

So, when you’re trying to build an effective sales funnel, if you can get a prospect to do 3 things and the 4th is asking for the sale, it will almost always work. In fact, this is likely to increase your conversions the most. If you can do this effectively, and make the tasks very manageable and easy, you’ll be able to close the sales with ease. If you can’t do it, you’ll likely struggle.

The Hook, Headline & Framework

Ask Russell Brunson on how to build an effective sales funnel, and he’ll likely tell you something like this. It’s all about the hook, headline and the framework. That’s the hard part. Once that’s there, the balance is just filling the spaces. For example, if you’re doing a webinar funnel, figure out the hook, headline and framework, then everything else will come together. But that’s easier said than done for average people who aren’t as skilled at marketing.

But, what you’ll notice is that every 2 comma club award winner (and 8 figure club winner) has paid homage to this exact saying. They’ve created a compelling hook, written an insatiable headline, and structured out a rock-solid framework for their offer. In fact, if you ask Russell, that’s really where he spends the majority of the time. In essence, it’s thinking out the offer. What’s going to compel them to move forward? What’s going to build enough curiosity to really reel them in?

That’s what a great sales funnel does. Not only do you have to make a sexy headline, but if you don’t have the proper hook targeted at the right audience, you’re essentially wasting your time. It’s definitely one of the elements that takes the most time to create. But that’s where the majority of your time should be spent. Because, once that’s in place, the rest is essentially just fill in the blanks.

What Are Sales Funnels?

Okay, so you understand some of the psychology behind selling. But how can you use this information effectively to build out sales funnels that convert at high rates? That right there is the million-dollar question. However, before diving into that, let’s review what a sales funnel actually is. At the end of the day, a sales funnel is simply a multi-staged and multi-medium based system to automate the sales process.

Sales funnels do this in a number of ways. First and foremost is by using the underlying psychology of selling. Like we discussed, this involves doing the following:

  • Properly using the pain-versus-pleasure paradigm throughout your funnel
  • Creating an irresistible offer that appeals to your audience
  • Using the vehicle of a story to create a relationship with your prospects and leads
  • Reeling them in with a very compelling hook, headline and framework
  • Testing, poking and prodding until you get things just right

Without getting lost in too much detail, sales funnels are effectively where you’ll bring together numerous disciplines. You’ll create an irresistible offer, develop a solid weeks-long email sequences, segment based on user actions, create persuasive sales letters and headlines, and then split-test to oblivion. In fact, if you don’t get it right on the very first go, don’t be discouraged. You need to test to figure out where the funnel is effectively broken.

However, to better understand what sales funnels are and how you can leverage them to grow your business, you first have to understand the varying stages of a funnel. If you’ll imagine a sales funnel for a moment, just think about a regular funnel and how it works. At the top, you pour in some liquid or other substance, and it gets filtered down into a finite point where it then exits out the funnel in a very focused trajectory.

That’s essentially what happens when you build a virtual funnel. Lots of prospects go in the top, and some (not all) end up filtering out at the bottom. Those that filter out are your sales. What happens between the stage of prospecting (or browsing) to becoming an actual customer is where the magic of the sales funnel comes into play. The goal of the funnel, then, is to move a prospect along from the varying stages all the way through to becoming a customer and handing you money.

How Do Funnels Work?

The concept of a sales funnel is simple. It moves a prospect from essentially just coming into contact with you, to actually spending money with you. But the best and most impressive part about sales funnels are that they can literally take your business through an exponential rise almost overnight. Now, no one is guaranteeing you riches here. But this very concept in business can certainly fuel growth at any stage. Understand and leverage a sales funnel, and you’ll understand how you create explosive, almost-overnight results.

Thus, when you think about sales funnels, think about generating income on autopilot. It means the ability to scale your business to the moon through a set of virtual mechanisms, triggers, email sequences and sales processes that help to bring the sales funnel to life. As it grows and evolves, it helps grow your business and make you money, literally while you sleep. Now, if this sounds like some kind of dream, it isn’t. Sales funnels are real and they work. But to truly understand and appreciate the power of the sales funnel, you need to understand the varying stages of the funnel.

Yes, you need psychology to move the consumer through prospect to buyer. But you also need to ensure that each point of the funnel pushes them forward to the next. Sales funnels offer automation akin to walking a customer through from browser to buyer. Think about that for a moment. When you work with a customer face-to-face, you tailor the interaction towards them. You assess their likes and dislikes,

Now, I know what you’re thinking. That’s impossible, right? Well, it’s being done every single day. Did you know that ClickFunnels, one of the world’s leading landing page builders (aka sales funnel software), is creating a new two-comma-club award winner almost every single day? That means, a new person is creating a million dollar funnel each and every day who uses ClickFunnels. That’s pretty epic, especially when compared to other landing page builders.

But also understand that there’s a very serious statistic about sales that should resonate with just about anyone. The truth is that not many people will buy on first contact with you. You have to build and develop that relationship. That happens through the right email sequence. Of course, you need to offer the right bait to get that email address, but once you have it, you have to treat that person like a friend and catch them up on your life.

When you’re speaking to a prospect, remember that you’re speaking to them at the point where you once were at before whatever it is that you’re teaching changed your life. Your prospect is effectively in the same boat as you before you became an expert at whatever it is that you do or want to teach. The better you do that through the vehicle of a story, the more likely your sales funnel is going to convert like crazy.

The Stages Of A Funnel

Sales Funnel Stages

Stage 1: Awareness

If you’re setting out to build a sales funnel, ClickFunnels has great pre-built funnels. Yes, you can use those. Or, you can build one from scratch. Now, no matter what type of funnel you’re building (i.e. webinar funnel, high ticket funnel, or coaching funnel, for example), you need to draw people in and make them aware of you. Often, that involves giving them some bait. What’s the right bait for your audience?

If you know the story about Brunson’s business, you know that when he effectively changed up his bait to present his 108 Proven Split-Test Winners, he began getting in his dream customers. In fact, prior to that, he dreaded work because he wasn’t serving the right people. To serve the right people, you need to present them with the right bait to draw them in. That’s where you build awareness.

This is where a prospect learns that there’s a solution to his or her problem and you have that solution. And the more you deliver in this first stage, the more likely you’ll have their undivided attention. Because, if a person gets valuable information from you for free, they’ll instantly want more and they’ll be willing to pay for that information. That’s how you earn their trust. In fact, blogs work very much the same way. The content you put out there helps you to build awareness.

Really, this has to be strategic. Think about the bait you’ll use to create awareness. That bait might be a podcast, it might be a blog post, it might be a free ebook, a cheatsheet, a checklist, a video, or something else for that matter. It doesn’t matter the format. What matter is the strategic positioning for your audience. That’s where all things sales funnel related starts. That’s where you combine the art with the science to give you a strong foothold.

Stage 2: Interest

Once you’ve got their attention and they’re aware of you, the next stage is interest. This doesn’t happen immediately. You have to form a bond with the prospect. This is where they begin conducting extensive research into the problem. If you can help them solve that problem through say an email sequence, or by delivering valuable nuggets of information, then you’ll definitely have their interest (and not just their awareness).

Keep in mind that most sales doesn’t happen right away. Not upon first contact, at least. Did you know that the average consumer needs roughly 90 days before making a purchase decision? However, to increase that, they need to be constantly exposed to you, your product or your service. They say that an exposure of somewhere around 20 times often drives that interest into the next stage, which is the decision.

However, where most people falter and fail is in this stage. They get discouraged when the sale doesn’t happen right away. Keep in mind that it often doesn’t work that way. Now, there are exceptions to this rule. That’s why the free-plus-shipping model is so popular. One, the power of the word free is extremely compelling. Two, is that it helps get customers through the door. Remember what Dan Kennedy once said? The company that can spend the most money to acquire  a customer wins.

Did you know that Brendon Burchard, one of the most savvy marketers in the world, has an email sequence of roughly 190 weeks? Yes, weeks! Could you imagine writing an email sequence for 190 days let alone 190 weeks? Now, that doesn’t mean you have to write a 190-week sequence. What that should tell you is that it all happens right there. That’s where the magic is born. Spend time on the email sequence to help move your prospects from interest to the next stage of decision.

Stage 3: Decision

The third stage of the funnel is the decision. This is where they become convinced to buy whatever it is that you’re peddling. Ways to help speed this along are things like offering up social proof. That certainly drives the decision. But also by creating a deep bond between yourself and the prospect. You have to become relatable to them. You have to be fallible. Expose your vulnerabilities. It might seem awkward, but that’s how you connect with others.

Once again, this is an art done through email sequences and other points of contact such as social media posts, blogs, podcasts, and so on. When a prospect is interested in you, they’ll devour all the content that you put out there. Because of that, they’ll learn about you and your life and your journey. The more relatable that is, the better you’ll connect with them. Don’t be afraid to expose those vulnerabilities.

This is also the stage where much of your persuasion and psychology of selling pays off. This is where it all pays off. Thus, the more you can interweave things like urgency and scarcity into your marketing message, while also leveraging the other strategies such as micro-commitments, the quicker that decision is going to happen. If you can’t, you’ll find that it takes far longer this to occur.

Stage 4: Action

While this might be the final stage of the sales funnel for most, it’s not for all. When you have a buyer, that’s not the end of the equation. The goal is to turn that buyer into a raving fan. You do that by overdelivering value. If you can do that in every stage of your sales funnel, you’ll ultimately win this game. So don’t skimp on the value. Go out of your way to help. Even if you have to help people in the very beginning more or less for free. Do it anyhow.

The more you have long-term strategic thinking as opposed to short-term desires for gains, the better you’ll fair in the long term. That’s just the way that it works. While getting to this stage is a win, actually helping the customer change their lives and achieve something that you teach is the real win. As Brunson calls it, impact and income. The goal is to make a considerable impact on the lives of your customers. Income should be secondary.

When you think in terms of the long-term implications of your actions, and think less in the ways of in the right-here-right-now, the more you’ll win in the end. All this takes is a shift in thinking. But to do that, you have to start somewhere. Add crazy value in every stage of the sales funnel and leverage all the strategies and techniques to get people to buy. But then, be sure your content adds immense amounts of value. That’s how you really win. That will never change no matter what century or age we’re in.

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2 thoughts on “Sales Funnels 101: The Mechanics Behind Selling Online

  1. Loved the content of this article and find the whole process fascinating. Looking forward to learning more and using these techniques and strategies with my fledgling website. You might want to double your grammar.