In the most perfect world, you'd love for your customers to approach your business and buy the most expensive product or service you have... wouldn't you?
I know I wish that would be the case for my business as well. But we all know that it's impossible to do that and can even be destructive to a business that only sells high ticket products that aren't in desperate need (water & fire restoration for example).
That's why it's important to have a full range of products so you don't have to convince your customers to buy your most expensive one right away.
This is where a sales funnel comes into play. A sales funnel has will help you do two things:
- Provide products and services at different levels according to what your customer can afford
- To make immediate cashflow while identifying who your top paying customers are
Let me breakdown what the sales funnel above:
- The top of your funnel is your traffic (visitors, online or offline).
- The next phase is your lead magnet or "bait" piece. This is something you draw your potential customers into your funnel by offering something at an extremely low price point, although it works best if you offer something free. An example is a dentist who offers a free cleaning. Or a fitness trainer offering a free consultation and body assessment. Online this is usually a free report, video, white paper, etc.
- Next comes your Tripwire. This is a product or service you sell for less than $50. It gives your customer the value it needs at that time, but more importantly, you've generating a paying customer. This will have them going through the rest of your funnel much easier. A majority of people will buy this product and you'll use the revenue to liquidate your advertising costs.
- After the Tripwire you are now going to introduce your core product. This usually is priced somewhere in the middle of your Tripwire and your most expensive product. Not everyone will buy this, however, this revenue will pay your overhead and you should have at least 20% left for profit.
- Finally, you have your profit maximizer. This is you most expensive product and you'll probably be working with these customers on more of an intimate level. This product should give your customer more use value than the money they spent on this product. This money is straight cash in the bank... the money you dreamed of when you first started your business.
The Purpose of a Sales Funnel
This process is what descends your customers through the Value Ladder. This will help you find your "dream customer" who will purchase your profit maxmizer and will continue to buy from you again. All while providing value according to the unique needs of every customer that enters your funnel. It sifts and sorts your customers for you and it makes it easier to identify those who will buy your top product and stick around to keep buying more.
If you read my last post about the Value Ladder, you might be asking what's the difference between the Value Ladder and a sales funnel.
Your Value Ladder is just how you're pricing your products on different levels based on what you have to offer according to the unique needs of your customers.
Your sales funnel is the process to push your customers though the Value Ladder with specific marketing messages catering to the different levels of the ladder encouraging them to take the next step... make sense?
Having a highly optimized and finely tuned sales funnel will accelerate your profits... but only if you segment your list of customers and formulate marketing messages according to where they are in your sales funnel.
What has been your biggest struggle when descending your customers through your sales funnel? Leave a comment below and maybe I can help.