What is Sales Funnel?

If you consider the shape of a funnel, it allows you to
lead a wide volume into a narrow passage way. The
same for your "sales volume" you have leads from
many different places that enter the same place.

So you may have leads/traffic coming from facebook,
PPC, seminars, print ads, forum posting --all leading
to a sales page where you sell something.

Graphically it loos like a funnel.

-Ray Edwards

In short, it starts with a visitor that you turn into a lead via email list, then to you try to sell them your product, and "funnel" them along to your higher priced products (coaching for example)

Of course you will need to gain trust with your leads, but the goal is to take a visitor and turn them into a customer.

Yes you put lots of people in at the top, maybe with a free eBook. Some of those will then buy a low cost product, some of those will buy a higher priced product, and so on.

I will give you an example of a sales funnel so you'll understand it better than just theory.

Example:

Squeeze Page -> OTO -> Thank you page

And then you can add lots of variations into it. Like adding more oto's, adding affiliate links in your thank you page, adding exit pop ups, downsells etc...

Squeeze page-OTO-Thank you page.

Good start, but you can go way deeper and make way more with the right funnel set-up. Exit redirects and pop-ups and all the goodies.

The idea is that as a potential customer works their way through the funnel the closer they get to the small opening the more likely you can close the sale. So for example if you are using PPC ads to bring in people you get some that are not going to be interested, the ones that are, will move further into the funnel. Spending effort on customers who: have money, and have an interest has a higher ROI those are the ones in the funnel.

A sales funnel is a system you use to generate sales.

The first part of the sales funnel is your broad market approach to making potential customers aware of you, your site, your product, or your service.

The extreme front end of a sales funnel might include a YouTube channel wherein you have videos that explain something and direct people back to your website for further information on the subject. It might also include a Podcast you have on iTunes wherein you discuss your field and direct listeners back to your website for further information. It might also include a Twitter account wherein you Tweet about the subject and direct people back to your website for more information, and a Facebook page for similar purposes. The front end of your sales funnel might also include a mobile application you give away for free in the App store or Google Marketplace, ultimately directing people back to your website. The front end of your sales funnel could also include classified ads on craigslist or similar sites directing individuals back to your site for more information, and posts on forums with signatures directing people back to your website for more information. You might also draw customers into your site with blog comments wherein you become part of the discussion and direct people back to your own site for more information. Your front end of your sales funnel might also include public relations by becoming friendly with bloggers in your niche and getting articles written directing people back to your site for more information, and appearances on podcasts, radio, television, or newspapers directing people to your site for more information. Of course you might also write and post articles to article directories that draw people back to your website. In addition to these "free" methods of generating traffic, you might also buy paid traffic with pay per click ads, pay per view ads, cost per thousand ads, and other paid advertising methods.

That is the front end of your sales funnel.

So let's just examine how one of those methods of starting the ball rolling travels through a typical sales funnel. You might post a video on YouTube explaining a subject that you know A LOT of people are regularly searching for information about. At the conclusion of the video you encourage the people who have watched your video to get more information from you on your website via a "Free report" you are giving away on your website, and directing them to click a link in the video to your site.

They click the link, and travel to your site. At your site, you might use a viral traffic technique to INCREASE traffic to the original video that brought this user to your website by requiring them to "share" your previous video via Facebook or Twitter before they can access the "free" report on your site. They hit the share button and they get access to your free report which may be another video embedded in your webpage, possibly a private YouTube video, possibly a video you are paying the bandwidth costs for, who knows, or it could be an ebook in PDF format, or maybe even just a simple html webpage, it doesn't matter, but this is phase two of your sales funnel.

They view the new information, and the reason I suggest a video is because at the conclusion of that video, maybe you tell them, for a new "free report" please give me your email. They sign up for your email, and complete step three in your sales funnel, and get access to yet another free piece of information which you are using to market these folks yet another piece of information that you intend to sell them.

The key is to have a killer video on YouTube, killer free content for the retweet/share to unlock content, and killer free content for the email address. Give these people REAL value for nothing, and then say, at the end of the third free piece of information, which might come through the email list they joined, or at the end of the third piece of free information you have given them a way to buy your SUPER VALUABLE CONTENT. You have proven to them that you create real value for them with the free stuff, and maybe they buy at the end of phase three.

Of course, now that you have their email, continue to give them good free content, and eventually you might win them over LATER. To buy something CHEAP!

Once they have bought something CHEAP, then phase five of the REAL SALES FUNNEL BEGINS.

In phase five, the UPSELLS start. After you have converted a free user into a paying customer, then you must get them to BUY MORE! You had better have delivered UNBELIEVABLY valuable content with the cheap paid content. Give them $2K worth of materials for $20! Why? Because once you have done that, it is time to get them to join a super secret special membership club wherein they will pay you $240 a year to get your insider tips, and special access to seminars with you online.

Once you have gotten the first upsell into the $20 per month subscription service, then it's time for phase 6, the MEGA UPSELL, You are gonna need 200 people to pay you $2000 each to attend a 3 day event with you somewhere, maybe Vegas, they have convention space in Vegas right? For a mere $2K your biggest fans get to spend three days with you and your trusted advisors and Mastermind group learning all of your most guarded secrets and rubbing elbows with you directly. $400K for 3 days work ain't bad is it?

That is THE GOAL of the UPSELL, the $2k seminar, or the $20K one on one coaching package, the overpriced special services.

But in the interim, if you sell 20,000 ebooks at $5 a piece, well, that's only $100K, and if you get 5000 people to join your membership site for the year at $20 a month, that's only $1.2 million on the year, so you don't have to sell too many of the $2k seminars to have a comfortable living.

And that, is a sales funnel.

Basically when you obtain a lead with some sort of offer. Once you get that lead, you direct them to another offer. This normally goes for a handful of other offers.