Sales Funnels: A Beginner’s Guide (Transcript)
You might be thinking: those are one of those complicated things everyone says you need in order to be successful, but really… they’re probably just a distraction from what you really need.
This is a transcript of Work Less, Earn More, Episode 46. Listen to the episode here.
We became entrepreneurs because more than anything, we want freedom. We want to be in control of our own schedule, income, and life. But unfortunately that isn’t always the reality of being a business owner. I’m Gillian Perkins, and I’m on a mission to take back entrepreneurship for what it’s supposed to be. In every episode, I’ll share with you how to get the most out of every hour you work so that you can work less and earn more. Let’s get to it.
A beginner’s guide to sales funnels. In this episode, I’ll be covering six important things that you need to know in order to build funnels that successfully convert your traffic and your visibility into paying customers so that you can increase your business’s revenue and increase your income.
The first thing that you need to know in order to be successful with sales funnels is that every business has one. Having a sales funnel is not optional. It’s not a fancy marketing tactic that you might want to consider using when you’re a few years into running your business and you have the time to devote to building a fancy funnel. It’s not something that if you’re not tech-savvy you shouldn’t do, or that is only for marketers. Every business has one, whether it’s the salon that you go to, or the donut shop down the street, or a business that you bought an online course from, or Amazon. Literally every business has one, because a sales funnel is simply the process that guides someone from the point when they first hear about your business to eventually making a purchase. There are many different ways that a customer could take this journey, and different businesses have very different types of sales funnels, but every business has one.
How to work in an Online Business
Let me walk you through two very different examples. The first example is for an online business that sells digital courses. This particular example business gets their traffic from Pinterest. That means that most of their customers originally find them on Pinterest. They’re scrolling on Pinterest one day and they see a pin that this business has shared. This pin links to an article on this business’s website. It’s a simple how-to article. So someone clicks that pin on Pinterest. They’re taken to the company’s website. They read the blog post and in the blog post, a free resource is offered. In order to get that resource, the visitor needs to input their name and email address and join the company’s email list. Then the company sends them that free resource.
Now the company is starting to warm up this new prospect. The company then sends them a series of emails then invites them to a free webinar. The prospect attends the webinar, learns even more about how to solve their problem and is persuaded that the company’s product, their course, can help them to get the result that they’re looking for. They pull out their credit card and purchase the course.
You’ve probably heard of a sales funnel that works like this before, because it’s a very popular type of sales funnel for a marketing company to use, and most people who teach sales funnels work in marketing. But now let me give you a very different example. What does the sales funnel of a local donut shop look like?
Well, first of all, people have to find out about them somehow. How would you probably find out about a local donut shop? Most likely you’d be driving down the street and you would see their sign. That is how they get their traffic. It’s literal traffic, cars driving down the street. Well, people driving in cars down the street, they see the sign and they think, “Ooh, I would like a donut sometime. I wonder if their donuts are any good.”
Then the next time you want a donut, you decide to check out that donut shop. You drive to the donut shop and you take a look at the different donuts that they have available and what their shop looks like. If their shop looks clean and inviting and their donuts look delicious, then you have been sufficiently developed to be ready to pull out your credit card and purchase that donut.
We still have those three main pieces. First you found out about them, then you were warmed up to buy, and then you had a way to make the purchase, just like the online business did. And this is just another version of a sales funnel. The first thing you need to understand is every business has a sales funnel if they’re making money at all. And if you are running a business, if you want to make money with your business, then having a sales funnel is non-negotiable.
The basic structure of a funnel
The second thing you should know about sales funnels is the basic structure of a funnel. Now, this won’t take but a moment to explain, because we’ve already talked about these different pieces in the two different examples. The first piece is traffic. Somehow people need to find out about you and get introduced to your brand. Second, you’ll turn that traffic into leads. This is where people decide to take the first step with your brand. It might be someone opting into your email list, or it might be someone walking into your local shop. Third, you need to develop those leads. You need to warm them up and get them ready to buy. We’ll talk more about that in just a minute. And then finally, you need to convert them into a paying customer. In the local donut shop, it could be someone behind the counter asking, “How can I help you?” and then processing the transaction. Online, it might be an email that you send with a link that says, “Click here to join now” that takes someone to a checkout page where someone can enter their credit card information.
Every funnel has four main pieces: traffic, leads, development and convert. Let’s take a moment though, to talk about the development phase, because this is where there’s quite a bit of intricacy. In order for your prospect to be developed and to be ready to convert, they need to believe that there is first of all a problem that needs to be solved. They need to have a reason to change. With the donut shop, the reason to change is probably they’re hungry, or they want a treat. With your online business, if you’re selling a course online, there could be any number of problems that someone wants to learn how to do something so that they can solve.
Second, your prospect will need to believe that you have the solution, and they’ll need to trust that your solution will work for them. With the online donut shop, basically that means someone needs to trust that your donut is actually going to taste good and not give them a stomach ache. Online, if you’re selling a course, they need to trust that your course will teach them what they need to know, and that what they learned from the course is going to get them the result they desire.
But beyond trusting the product, they also need to trust you. They need to trust that you didn’t poison the donuts or that you are going to really give them what they need. And they also have to trust themselves. Now, in the example of the local donut shop, we don’t even need to think about this because everyone trusts themselves to be able to eat a donut. But when it comes to a product that requires a little bit more from your customers, like an online course where someone actually has to take the time to go through the course, needs to be intelligent enough to understand the course and needs to be diligent enough to apply what they learned, that can be one of the most important and most difficult pieces of your entire funnel.
The final belief that your customer needs to have in order to be fully developed and ready to convert is the belief that the results are going to be worth it. With the local donut shop, someone just needs to believe that that doughnut really is going to be yummy and satisfy their craving. And because most people have eaten donuts before, most people know that that will probably be true. With your online course, though, it’s a little bit more difficult. People are a lot more comfortable with where they are now than with the mysterious unknown. And so even if they have a significant pain-point right now and they think that your product could probably solve it, they might not be sure if the result will definitely be worth the money or the work that they need to put in in order to get that result.
To recap, every funnel needs to have traffic flowing into it, needs to convert that traffic into leads, then needs to develop those leads so that they’re ready to convert. And finally, it needs to convert those leads so that people actually purchase the product.
Automated or manual funnel
The third thing you should know about sales funnels is that every piece of your funnel can either be automated or be manual. For example, somehow you need to get traffic into your funnel. This is a really important step because if you don’t have any traffic flowing into your funnel, then you won’t have any output. So you could either manually get the traffic by going out and finding individual people yourself, or by cold-calling, or you can automate your traffic source. You can put up a sign where everyone can see it. You could run Facebook ads. You could write blog content or create videos that people can find on their own and be introduced to your brand in that way.
Your method of turning that traffic into leads can also be manual, or it can be automated. Now this is something that almost everyone automates. Sure, you could ask people if you could follow up with them, if you’re cold calling them. But most of the time you’re going to have some sort of opt-in form on your website or an application form, or you’re going to give out a free sample, or you’re going to have your door open so customers can walk in. Somehow you are going to let customers take that first step with your brand, raise their hand and say they are interested in learning more or maybe interested in buying.
Developing your leads can be very automatic or very manual. You could develop your leads by personally talking to them, sharing your marketing messages with them in that way, and guiding them to form the beliefs that they need to have in order to want to purchase your product. But you also could do this through articles on your website, through emails that you send, or on an automated webinar. And finally, you need to convert that lead into a paying customer, and this again, can be automated or can be manual. You can have it set up so that a customer can just go to your website and check themselves out. Or you could ring them up yourself with a cash register or over the phone.
Automate your funnel for passive income
The fourth thing that you should know about sales funnels is that if you want your sales funnel to produce truly passive income, then you will need to have every part of your sales funnel automated. You will need to have a source that is automatically generating traffic. You’ll need to have a way that people can automatically become your leads, some sort of system that automatically develops your leads, such as an email series, and finally, a way that customers can automatically convert on their own without you having to involve yourself.
Now, I just want to be clear here and say that I’m not saying that this is the ideal situation, that everyone should automate every piece of their funnel. I’m just saying that if you want your funnel to create completely passive income, that’s what you would need to do. And here, I just want to add that when you’re first starting out, I really wouldn’t recommend trying to set up a completely automated funnel, because the truth is that in order to scale your company and have the biggest impact you can and increase your revenue as much as you can, you will need to really develop as a company. You will need to develop as a leader. You will need to develop your marketing messages. And if everything is completely automated from day one, then you’re not going to get nearly as much feedback as you would get if you were interacting with customers.
When you interact with the customers, when you work on manually converting them into leads or manually developing them, then you get to hear all of their concerns. You get to hear what’s holding them back from buying. You get to hear what they really want out of buying your product. You might learn that they want a flavor of donut that you don’t offer, or you might learn that they really want to buy your product but they’re not sure if they’re going to have the time. Once you get that information, then you can work on solving those problems. You could create that new flavor of donut, or you could share with them that your course only takes two hours to consume and implement. But if you don’t even know the problems exist, then you can’t solve them, and you’ll be missing out on a whole lot of sales.
The fifth thing I’m going to share with you is going to get really nerdy really fast, but I just want to share with you a few specific different funnels that we’ve found have been converting really well for us recently, just to get you headed in the right direction. So the first one is content marketing for automated traffic and lead-gen. In short, if you want to automate the traffic, the two parts I would recommend automating as soon as possible are traffic and then that conversion, and the parts that I think you should wait to automate are leads and development and especially development.
How to automate using content marketing
In the interest of automating your traffic and your lead-generation, use content marketing. This is going to be the most affordable way to automate because you’re not going to have to pay for ads, and it is also going to give you the most feedback, because you’ll be able to see which types of content, which pieces of content your customers love. Whether you’re writing articles on your website or videos for YouTube or some other type of content marketing, you’ll be able to see which piece of content gets consumed the most, gets the most likes or the most comments.
And that will tell you not only which piece of content you should work on marketing the most and really getting out there the most, but also what types of content you should create more of in the future. And it can even tell you things that it will be important to emphasize in other parts of your funnel.
For example, if you have a how-to article that is getting a lot of views and a lot of engagement, then you know that people are really interested in solving whatever problem that how-to article helps them achieve. And so when you go to write your marketing messages for your sales page or for the script that you are using, when you are talking to a prospective customer or you’re writing your emails, you need to make sure that that pain-point is really addressed and addressed very thoroughly, and that it’s emphasized that your product helps them solve that pain-point.
Promote a wait-list
Another thing that I’ve found works really well for sales funnels is promoting a wait-list prior to a launch. You’re getting ready to launch a product and you want to get traffic. You want to get the leads so that during your launch, you can develop those leads and convert them into buyers. But a lot of people get that traffic and convert it into leads by just sharing free opt-in offers. And while this certainly can work and there’s nothing wrong with it, something that works even better is promoting a wait-list for your product.
When you promote a list and you’re setting the right expectation, you’re telling people that this product is coming and that they should get excited about it. You’ll start to create momentum and people will know that they’re signing up to buy something. So you’ll be able to convert a much higher percentage of those leads into buyers than if you have a lead list that is full of freebie-seekers, people who just signed up because they wanted the free thing, but had no intention of ever buying.
Instant value opt-in’s
Here’s one more thing that’s working really well in our funnels right now, and that is instant value opt-in offers. If you are sharing an opt-in offer to get people to sign up for your email list, then there are many different things you could share. You could be offering an ebook. You could offer a video workshop. You could offer a quiz. You could offer a checklist. But there are some opt-in offers that are much more likely to give real value to your customer immediately.
To explain what I mean here, let me give you an example of something that doesn’t. If you give an opt-in offer that is a long ebook, then in order to get the value out of that, someone is going to have to take a fair amount of time to read the entire ebook. And we all know how much spare time most of us have on our hands: not very much. Already there is going to be this barrier that someone might not even have the time or remember to read your ebook. Then they’re going to have to do the work of reading the ebook. And then finally, even if they read the entire thing, if you are sharing something with them that takes an entire ebook to explain, most likely it’s not going to be something that they can instantly implement to get a result.
Alternatively, we want to give them something that they can very quickly and easily consume and instantly get a result from. Now, one of my favorite examples of this and favorite ways to do it is with a quiz. People love quizzes because they’re fun. They can click through them in a matter of just a couple of minutes. And the result that they get is the result of the quiz, and that is actually a satisfying result. They really feel like they got something out of the quiz because you’ve just told them something about themselves or about their situation that they didn’t previously know. Basically, the quiz is diagnosing their problem, or it’s giving them some insight about themselves.
Can you see how different this is from sharing an ebook where someone has to do all the work and spend all the time reading and then do a bunch more work to maybe someday get a result? Instead, it’s better to give someone a much smaller result but much more quickly. That’s a lot more satisfying.
It’s all about traffic
Tto wrap this all up, the sixth and final thing I want to share with you about sales funnels in order to ensure you can be as successful as possible is that a funnel can only work if it has those main components I covered earlier. You have to have traffic. If there isn’t traffic flowing into your funnel, people aren’t somehow finding out about your brand and your products, then they can never buy them. You have to somehow convert that traffic into leads. You have to get people to take that first step, because if they don’t take that first step, then you can never follow up with them. You don’t have their contact information.
Then you have to somehow develop them, because the truth is if they were already fully developed and fully ready to buy, they would just instantly buy. But there’s something holding them back. They’re not quite certain if this product is for them, if it’s going to get them the result that they want, if the result will be worth it. You need to take that time to develop them, and you need to have some sort of mechanism in your funnel that develops them.
Have a checkout process
And finally, there has to be some way for them to convert. You have to have some sort of checkout process. I’m sure you’ve been in the situation before where you visited a website and you were interested in hiring someone or purchasing something, but there was no way to do so on the website. And so you sadly had to just leave the website and not get the product that you wanted to buy. I know I’ve certainly been in that situation. And how sad for that company that they missed out on an eager buyer. So don’t let that be you.
Can you see why each of these four components are so completely essential, and that truly you can’t make a sale at all unless you have all of them? As I mentioned earlier on, there are many different options for each of these four pieces. You certainly don’t have to have a webinar or an automated email series, or even a PDF download that people can opt in for on your website. None of those things are necessary at all. They’re just different options you can use if you want to. But you do have to have those four components, whether you are an online course business or a local donut shop. They don’t have to be fancy, but they have to be there or else your funnel isn’t going to work.
This brings us to the end of this beginner’s guide to sales funnels. I hope that at this point you understand exactly how a sales funnel works, why it is very important for your business to have one, dare I say absolutely essential for your business to have one, and some tactics that you can use to build a really successful and high-converting funnel for yourself.
One last thing…
But the last thing I want to mention before we wrap this up is something I said earlier on, and that’s just that I don’t recommend that you try to automate this entire sales funnel process from day one. That really is going to do your business a disservice, and it will be a lot of work that you have to do before you can start making money. And it’s work that’s simply not necessary. Of course, yes, you have to have a funnel in order to make even your first sale, but I recommend keeping the process very manual at the beginning and going out and actually talking to people and developing them manually and even converting them manually, just so that you can get the really important information from your prospects that you need in order to create really compelling marketing messages and to eventually build a very high-converting automated funnel.
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