As a startup founder, you need to capitalize on every weapon at your disposal to optimize revenue. One of the essential weapons in your startup armory is the sales funnel, and if you dont have one, you probably should.
This blog post will explore sales funnels and how to deploy them effectively. The goal here is to have you create compelling, powerful systems which will magnetize conversions and boost your sales. By the end of it, you will be a funnel maestro, we promise.
What Is a Sales Funnel?
Dan Kennedy, a great marketing mind, once said, “Whoever can spend the most money to acquire a customer Wins”. The sales funnel is all about spending more systematically to acquire more customers and, thus, more profits.
A sales funnel, in its most basic definition, is a set of interconnected web pages designed to gradually transform casual site visitors into prospective leads and finally into paying customers. One of the main objectives of a sales funnel is to increase the average cart value (ACV) in order to maximize sales.
The goal of a sales funnel is to maximize the number of people who make a purchase. The approach is identical to a funnel since many prospective customers may begin the customer journey at the top as website visitors.
The first step in the sales funnel is identifying potential customers, also known as leads. This can be done through market research or lead generation campaigns. Once you have a list of leads, the next step is to qualify them. This is done by determining whether or not they are a good fit for your product or service.
The final step in the sales funnel is converting leads into paying customers. This is done through Sales and Marketing campaigns. Once a lead has been converted into a customer, they will be added to your customer database.
What is the difference between a Sales funnel and a Marketing funnel?
The majority of marketers use "marketing funnel" and "sales funnel" interchangeably. However, there is a significant difference between them.
Marketing is building awareness about your product and service to attract qualified leads; this can be done through PR, SEO, paid ads, etc. Sales responsibility is to convert these leads into paying clients.
In contrast, the sales funnel is one part of the marketing funnel. The objective of the sales funnel is to increase your average order value (AOV) from any paying client. The sales funnel is a sequence of pages that typically contain a sales page, order page, bump offer, upsell page, downsell page, and a "Thank You" page.
To assist you in differentiating between the sales funnel and the marketing funnel, we've outlined their respective starting points, strategies, and stages below.
How Sales Funnel Work: The Stages of the Sales Funnel
As discussed previously, the sales funnel is just a part of the marketing funnel. Thus, it consists of distinct stages in contrast to those of the marketing funnel. Therefore, the question is, what exactly are the stages of a sales funnel?
As it is a fact that Clickfunnels is considered one of the best, fastest-growing sales funnel software in the market, mentioned below are the stages of a sales funnel by clickfunnels.
1. Landing Page (Add To Email List)
A landing page is a web page developed with a specific conversion goal in mind in case of a sales funnel; that objective is to obtain the visitor's email address. In order to maximize the number of visitors who become leads, you should promote your lead magnet on a dedicated landing page rather than your main website.
You may begin with a basic squeeze page. A squeeze page is a straightforward yet successful online sales page for generating leads and growing an email list. These three things are essential for a basic landing page:
Here's a simple yet incredibly effective example of a clickfunnels squeeze page for their Funnel Hacker Cookbook.
The landing page displayed above is simple, and clicking "Yes! Download The Free Funnel Cookbook Now!" takes you to a simple form where you only enter your Email address.
Pro Tip: Keep your landing and squeeze pages devoid of distractions. Often, do not include a logo, complicated footers, or extra links on the page. The number one secret to achieving the maximum conversion rate on a squeeze page is to use a headline that elicits curiosity.
The headline will compel visitors to enter their email addresses and click "Submit" in order to get the answer to the query. The more the visitors' curiosity, the more likely they are to provide their email addresses.
2. Sales Page (Build Value)
Your front-end offer requires a sales page. Your front-end offer should be as short as possible. In this stage, you establish the value of your product or service and describe the benefits customers will receive after making a purchase.
If you want your sales page to convert successfully, the most critical copywriting aspect you must understand is the contrast between features and benefits:
Because people purchase based on benefits, you should emphasize them in your headline, sub-headline, and sales copy. How will your product improve the lives of your customers? Highlight that.
Here is an example of a headline and sub-headline that emphasize benefits:
Pro Tip: Add a bump offer below the credit card details to increase the cart value. In addition, add as much social evidence as possible to your sales page. Mention relevant achievements, certifications, customer testimonials, and stats. You may also display "As Seen On" media badges.
In addition, you should include a 30-day money-back guarantee, which should be prominently displayed beside the call-to-action button in to reassure customers who are ready to purchase the product.
The image shown below is an example of a bump offer by Russel Brunson.
3. 1-Click Upsell (Increase Cart Value)
The upsell is an offer that is an upgrade to the first offer that the buyer accepted. If prospective customers agree to purchase your front-end product, you should offer them an upsell.
Here is a recipe for irresistible upselling:
Pro Tip: Find a method to offer a ton of more value to your front-end product and charge a couple of extra dollars (i.e., Russell Brunson upsells are like $197) for it. Those few additional dollars may not seem like much, but they should add up to a significant amount of money over the life of your startup.
Another method could be adding additional upsell or a downsell page to maximize your average cart value.
4. Membership Area ( Deliver Your Product)
Typically, clickfunnels allows you to create your own membership funnel. Membership funnels were developed to enable you to offer your content in a safe, password-protected area.
A membership funnel includes the following:
You will be able to regulate the material your customers have access to based on their opt-in status or purchases. This stage includes delivering your products/services directly to the customer.
A ClickFunnels membership area is essentially an online area where customers can access the products they purchased from you.
Take a look at this screenshot of a clickfunnels membership area to help you understand it better.
Pro Tip: Making the login process simple and quick is essential, as this is where your members will access your services after registering. In addition, organize your products and services so that customers can quickly access what they need.
How the Marketing Funnel Works: The Stages of the Marketing Funnel
A marketing funnel relies mainly on the AIDA model. AIDA stands for Attention, Interest, Desire, and Action. The AIDA model illustrates the four stages a customer undergoes before deciding to buy something.
In a perfect world, your marketing strategy would do the following over the course of these four stages: raise awareness of your brand, create curiosity about your product or service, stimulate a desire for it, and motivate people to take action to test it out or make a purchase.
Along with each marketing funnel stage, we've outlined some highly useful tips to boost your sales process and maximize your startup revenue.
The very first stage of the marketing funnel is "awareness" since it's the point at which consumers just become familiar with your product or service. They might learn about your startup through advertising, social media, or word of mouth.
If your advertising content can capture and hold the interest of your target audience, they will naturally become intrigued with your product, offer, or business.
At this part of the funnel - the very top - you want the prospective customer to show interest and ask themselves, "what is it?"
ClickFunnels does a great job with content marketing in this regard, creating not only educational blog posts that gain attention but also entertaining or instructive videos like this video, Death of a website, which serves as both a comical and informative advertisement.
This content marketing strategy enables them to not only address the issues their prospects are experiencing but also to go above and beyond to make resolving those issues simpler.
Once you've piqued the curiosity of your targeted consumers, they'll want to know more about your company, the advantages of your service, and how well it may work for them.
At this stage, you want them to say, "I like it"
In order to reach this stage, your advertising content must be interesting and convincing. While stage one of AIDA focuses on getting consumers' attention, stage two is all about maintaining it. A hook will function nicely for this purpose.
t the "Interest" stage, the prospects actively seek solutions to their issues and methods to meet their goals.
Below the Fold is a service that provides pertinent news articles to its subscribers. It piques readers' curiosity with its catchy hooks like "Stories that don't make it to the main page."
The fascination in this statement creates a loop (What have I been missing without this service?) while emphasizing their value proposition of uncovering stories that aren't receiving coverage but are nonetheless significant.
One thing is clear; people usually buy from the brands they know, like, and trust. Familiarity and interest are established in the first two stages of the AIDA model.
The goal of the third stage is to transform "I like it" into "I want it."
This is accomplished by acquiring the final component of the picture: trust.
Nature Made is a world-famous vitamin and supplement brand. Instead of detailing the quality of their vitamins, Nature Made relies on the authoritative seal of the USP (U.S. Pharmacopeial Convention) to do the talking for them. The wording of their Facebook post is echoed visually by the stamp of approval.
After generating sufficient interest for your service or product, let your prospects take some action on it. Ultimately, if there is no obvious next step, all the content creation and prospect connection development are for nothing.
The goal of the action stage is to elicit the response, "I’m buying it."
It's essential to use a low-friction, high-incentive call to action to get people to take action. All of the previously stated funnel stages are geared toward bringing the prospects to this point.
Nerdwallet, a website dedicated to helping its users with matters ranging from credit to mortgages, features one such CTA. Offering a comparison tool is meant to pique interest and motivate the target audience to take some sort of action.
A large, bold button and attention-grabbing headline on the homepage draw attention to this tool and its benefits. The arrangement is simple and frictionless. Nerdwallet, through this strategy, is able to simultaneously generate leads and empower and engage those leads with high-quality content.
What Is the Difference Between a Website and a Sales Funnel?
A website is a collection of web pages that often includes a list of products and services, about us, contact details, and occasionally a blog page. It is your startup's digital footprint on the internet, and its primary purpose is to attract visitors.
Whereas a sales funnel is a collection of interconnected pages designed such that the online traffic flows linearly from a single entrance point, through some steps, to a particular target. A "landing page" is typically the starting point of a sales funnel.
In contrast to your website, sales funnels are set up to lead visitors through the customer's journey in a single path. Sales funnels limit distractions such as outbound links, concentrate on an offer, and encourage visitors to take action.
Websites and funnels are ideal partners in the new digital environment. While websites may offer a range of content tailored to various target categories, sales funnels tend to be more narrow and focused. Multiple funnels are present on a number of popular modern websites.
For instance, you may utilize your blog or web pages to drive visitors to multiple sales funnels tailored to your users' interests.
Why Sales Funnels Are Important for Startups
Sales funnel played a key role in Russell Brunson's ability to take his SaaS company from 0 to $100M in sales in just three years without taking investors’ money. He bootstrapped his software company with the help of a sales funnel.
Most software companies try to sell their product upfront, with extremely high, margin-busting customer acquisition costs. Russell was able to generate profitable sales funnels (of books and other info products he marketed) that gave him the opportunity to acquire leads for free.
He created a situation where he didn’t have any marketing budget constraints, a dream for every marketer and entrepreneur. By marketing low-entry products first, he was able to lower his CPA and profit from every sale he generated.
Curious to learn more about Russel Brunson's success story? We have created a comprehensive case study of his life. Here is the link.
Below are some of the primary reasons why sales funnels are important for startups:
It Helps You Have a Focused Sales and Marketing Strategy
Do you frequently lose money on traditional marketing methods that produce minimal to no results? If so, it's time you considered a proper sales funnel as an enhancement to your marketing efforts. It allows you to choose which marketing techniques and corporate models you need to thrive as an entrepreneur.
You no longer rely on a scattershot strategy to offer your products by implementing a specialized sales funnel. You have instead outlined the actions and steps required at each level of the sales process. The first step is to define your strategy, and then all the other benefits will follow.
It Helps You to Generate More Sales
As you understand which actions result in prospects purchasing your products and which discourage them, you may concentrate your efforts on things that lead to sales. Making fewer errors can result in higher sales from the same amount of leads and more leads entering your sales funnel.
A successful sales funnel helps you increase your income per sale. For instance, your company may increase its per-customer revenue by integrating a stage to your own sales funnel that enables customers to select related add-ons to their original purchase.
A Well Defined Sales Funnel Helps You Attract New Leads
The funnel aims to familiarize individuals with your company's product or service, engage their interest, and make the proper offer at the right moment. In addition, a funnel may motivate customers by offering discounts and bonuses, capturing their contact details, and maximizing their lifetime value.
A well-defined funnel tool like Google Analytics helps you visualize traffic on your website and detect pages with high drop-off rates. Effective sales funnels help you retain potential customers by indicating the number of visitors who exit at each level.
Sales Funnels Increase Forecast Accuracy
By monitoring the progression of leads through the sales funnel, a business will more accurately anticipate future purchases. This might assist you in making decisions related to cash flow, budgeting, and demand.
If you recognize that 10% of prospects who sign up for your mailing list eventually make a purchase, you may predict the number of sales you will make based on the daily number of prospective subscribers.
It Helps You Get High-Profit Margins
A detailed understanding of your sales funnel enables you to estimate client acquisition costs more accurately. This might provide the most profitable client acquisition strategies.
Imagine you are investing in Google and Instagram advertisements. If it takes $10 to get a prospect on Google but just $9 to accomplish this on Instagram, you should prioritize Instagram and increase your profitability.
You might also boost your profit margins by evaluating each stage of your sales pipeline. If you compare two landing pages and determine that one has a greater conversion rate, you should improve revenues without increasing customer acquisition costs.
Important Sales Funnel Terminologies You Need to Know
Pleasing tricky customers, worrying about meeting targets, and understanding your startup's sales process will overwhelm anyone. On top of everything else, there is a great deal of sales lingo that you must understand.
Feeling overwhelmed by the tough lingo around sales funnels? Fear not! We've defined some of the most common sales funnel terminology so that you can comprehend the difficult sales lingo.
A sales funnel order bump is an additional offer you may present to prospects on the landing page. Typically, this offer is complementary to the product or service in which the customer has previously expressed interest.
For instance, if you are selling a course on successful social media marketing, your website may offer a complimentary e-book on the same subject as an order bump. This is a productive method for increasing the average cart value.
An upsell is an element of the sales pipeline in which you give a customer an additional service or product to add to their purchase or an expensive version of a service they're already purchasing. Upselling happens when a seller offers existing customers a more expensive product or service.
For instance, after purchasing a month-to-month subscription to a software application, the sales representative may try to upsell you by giving you a tour of the more costly, feature-rich premium edition the following month.
After a customer rejects your first offer or your upsell offer, you provide them with a down-sell. The down-sell product is usually priced lower or packaged in an appealing way (like a payment plan) to get the customer to think again about buying it.
Usually, at this moment, you figuratively say, "Okay, hold on. I am prepared to make an even greater offer."
Cross-selling is a sales and marketing technique in which the seller offers an extra product to the customer, hence boosting the purchase value. Cross-selling involves persuading a customer to purchase a product that is complementary to the one they have already purchased.
Cross-selling may seem similar to upselling, yet there is a significant distinction between the two. Cross-selling seeks to persuade the consumer to acquire an extra (related, complementary) product, whereas upselling often entails getting the customer to buy a more expensive model (or upgrade).
Let's take an example of Amazon cross-selling to better understand the sales technique. If you've ever come across a series of products labeled "Customers Who Bought This Product Also Bought" or "Frequently Bought Together," Amazon is trying to cross-sell you something.
Purchased a camera? Amazon provides you with a memory card.
Want a cheap laptop? Amazon will recommend a mouse and portable keyboard to complement the purchase.
Average Cart Value (ACV)
funnel designs. The average cart value is calculated and shown in the statistics section of your sales funnel. This calculation displays the average amount collected per customer over your whole sales funnel. Therefore, this would include both the order form page and any upsell or downsell pages.
The average cart value is calculated by dividing your gross sales (total income, including upsells and downsells) by the number of sales on the order page.
For example, if the overall income of your sales funnel was $150 USD and there were 12 sales on your order page, the average cart value would be $12.50 USD.
Average Cart Value: $150 / 12 = $12.50
Self Liquidating Offer (SLO)
Simply put, a self-liquidating offer is one that is designed to cover its own costs. In other words, it is an offer where the cost of obtaining a potential customer is equal to or less than the revenue they generate.
For instance, suppose you offer a $97 e-book and can gain each new customer for $95 in advertising expenditures. That would be self-liquidation. These campaigns are an excellent approach to cutting customer acquisition costs (CAC) and improving profitability.
An Example of a Successful Sales Funnel
The example explained below comes directly from the author of Dotcom Secrets, Russell Brunson.
DotCom Secrets is an amazing book for entrepreneurs by the author. Russell effectively describes the sales funnel and especially the value ladder theory in this book.
If you wish to obtain this book for free, I've included a link here (just cover the S&H).
Now let's talk about the practical example Russel used in his book to explain the concept of a sales funnel.
Once Russel went to the dentist for a checkup. The dentist questioned him whether or not he smokes cigarettes or consumes a lot of coffee.
Russell felt a little off after hearing those questions, and there was a good reason for that. This was because he had never smoked and didn't drink coffee at all. Therefore, the dentist offered Russell if he desired special teeth-whitening trays.
Russell undoubtedly desired this, but let's rewind for a moment. Russell, at that time, was in a struggling phase of his career and couldn't afford the expensive procedure.
Sooner or later, he was able to secure dental insurance, and guess what came with that? A free dental cleaning treatment!
That's what convinced Russel to schedule another visit to the dentist.
When Russel visited the dentist's office for the next checkup, the dentist began to ask several other important questions.
Doctor: So, did you wear oral braces as a child?
Russell: Yes, how do you know that?
Doctor: Your two bottom teeth are moving, which is typical for those who wear braces.
Consequently, now there was a new issue in the limelight.
And when the dentist asked Russel if he desired a retainer to maintain his teeth in their place, he said yes.
Main Takeaways from the story
Following are the main points of this significant story of Russell's visit to the dentist:
- Russell initially entered the clinic to receive free teeth cleaning.
- When he exited in less than an hour, he had paid more than a thousand dollars.
This story is an ideal example of a sales funnel and especially a perfect example to explain the value ladder concept by Russel Brunson.
So, let’s figure out what a value ladder concept is, and we will try to understand the concept with the help of this above-mentioned example.
The Value Ladder Concept
If you're an entrepreneur looking to create a sales funnel for your startup, you might have heard of the value ladder. The value ladder concept is greatly explained by Russell Brunson, a co-founder of ClickFunnels, in his famous book DotCom Secrets.
A value ladder is a combination of multiple Sales Funnels with different products that ascend in pricing and value. The value ladder is a systematic sequence of steps that prospects may ascend in order to acquire additional products. It is a structured outline of a company's products, offerings, and services, increasing in value and cost as they ascend the ladder.
A sequence of products and services can range in price from cheap to expensive. The low-priced (or free) products are intended to generate leads and build trust, whereas the high-priced ones will provide more value in exchange for a higher pricing
Stages of the Value Ladder …
Every value ladder is unique depending upon the seller's needs and company structure. However, typical value ladders have a relatively similar structure, consisting of a bait, front-end, middle, and back-end.
As its name indicates, bait is the strategy utilized to attract individuals to your business's ecosystem. It's free or close to free, valuable product or service that allows you to establish instant trust with new leads.
If we refer to the example of the dentist mentioned earlier, “Free Dental Cleaning” is the bait by the dentist to the patient.
2. Front End
At the front end, you present qualified leads with a low-cost, low-risk offer that enables them to tackle surface-level problems with minimum commitment. Overall, this should be a really attractive and greatly discounted offer.
Free book with delivery, or a buy-one-get-one-free deal, are both effective marketing strategies. Once your potential consumers have accepted your bait offer, you should lead them immediately to a landing page or squeeze page that features your "tiered" premium offer.
If we take the story of the dentist as an example here, “Custom teeth whitening trays” is the front-end offer by him.
At the middle of the ladder, you offer the customer a more valuable and expensive product or service. The products and services at the middle of the ladder are designed to provide comprehensive solutions to prospects’ deep-rooted problems.
To move prospects up to the next tier of the value ladder, you must first present them with an irresistible offer, like a membership, a product, or a high-end service. The middle-end offer must be your primary selling point.
If we refer to the example of the dentist mentioned earlier, “Customized retainer for aligning teeth” is the middle-end offer by the dentist.
4. Back End
The back end is the stage of the value ladder that only a subset of your prospects will reach. At the backend of the ladder, you'll find your most useful, intense, and expensive offering—something that clients may use over and over to address a persistent issue.
Essentially, this is doing all possible to continue delivering value to customers after they've acquired a certain product or service.
However, there is no guarantee that clients will effortlessly upgrade to the next tier of value after they have fully experienced the benefits of your present offering. It is up to you to persuade them that upgrading to the next tier of value adds substantial benefit.
In the dentist’s example, “A recurrence program with visits every six months” is a backend offer made by the dentist.
The Peak of the Value Ladder
Peak is the top step of the ladder where (if feasible) you want to bring all of your prospects, where you can give the greatest value for the highest possible price. This is your most valuable offer.
For dentists, this is probably “cosmetic surgery.” For ClickFunnels, it is entering inside your company to create your sales funnels, set up your backend systems, and produce leads.
Benefits of Having a Value Ladder for Your Startup
There are multiple reasons and advantages for startups to have a value ladder. Some of the most significant advantages of the value ladder are discussed below.
Sell More to New and Existing Customers
A steady customer flow is essential for the success of any startup. Most startups invest a lot of money in acquiring new customers and boosting sales. A value ladder can help increase revenue without utilizing any marketing budget.
Using a value ladder, a startup can begin with entry-level products and scale over time with high-priced products or features.
Helps You in Understanding the Customer Journey
A value ladder enables you to easily understand the complex process of mapping a customer journey. It allows you to comprehensively map the consumers’ journey, including the products they've bought, the products they haven't bought, and also the products they might acquire next.
Additionally, value ladders help you cultivate relationships with your current consumers. You lead them from one service to the next, establishing a relationship at every stage of the ladder. This enhances their faith in you and simplifies spending on your upcoming products and services.
Allows You to Sell in Multiple Income Brackets
There is always an early adopter group and a late adopter group inside every target market. It's possible that some folks at the beginning of their customer journey can only purchase your front-end deal. Others may have greater financial resources and may buy your most expensive products and services.
A value ladder expands your potential customer base by making your products or services accessible to buyers in a wider variety of income brackets.
How to Build an Effective Sales Funnel for Your Startup?
Having a sales funnel is crucial for streamlining the sales process and increasing revenues. You can track how a prospect acts and how involved they are at each stage to see where they are in the sales funnel and how effectively it is working.
The steps below demonstrate how you can build an effective sales funnel for your startup. You should start with:
Mapping Your Value Ladder
To build an effective sales funnel, you must map your value ladder first. The best way to see how visitors find your site, how they interact with it, and which of your links ultimately result in sales is to employ a combined strategy and data visualization.
By using funnel mapping tools like Funnelytics, Geru, and FunnelFlows, you can easily identify and understand:
Funnel mapping tools can also help you map landing pages, sales pages, upsells, emails, ads, and other aspects.
Building a Sales Funnel
While mapping out your sales funnel, you must also decide what your funnel's landing page will look like and which products or services will serve as upsells and downsells.
After you have finished the process of mapping the elements, you can go on to construct the actual sales funnel for your startup. For this purpose, you may utilize funnel-building tools such as ClickFunnels to create a sales funnel that meets your business's needs.
By using funnel buidling tools, start creating the following step by step:
Stay in Touch to Maintain Your Relation
Once you have finished building your sales funnel and begun closing sales, you must not forget about your consumers and regular customers. Keep delivering them potentially beneficial educational content.
The email nurture series is a wonderful strategy to stay in touch with your potential customers. Email marketing allows you to promote your business to potential customers by sending them valuable information.
Dont slam them with too many emails, though - there is a fine line between baiting and what might be perceived as spamming. Once weekly is a good ballpark figure in this case.
Educate your audience before attempting to sell to them. What do they wish to acquire? What barriers and concerns you need to address to persuade them to purchase?
Send “thank you” Emails to your customers for their purchases and provide them with frequent details on upcoming sales and promotions. Develop brand trust and loyalty by including your customers in your social media campaigns and fostering a community among them.
Best Platforms to Create a Sales Funnel for Your Startup
You may keep your initial investment low by making use of sales funnel tools, which could be a good choice if you're just getting started. You won't have to hire a website developer or subscribe to a dozen different tools, but you will have to ensure that the program you choose offers all you want.
For instance, some sales funnel tools provide web hosting while others do not. If webinar hosting is essential to your firm, you will need to discover a sales funnel builder that meets your specific requirements.
An effective Sales funnel tool provides a clean and simple interface for constructing complicated sales funnels. It helps accelerate the lead nurturing process, simplifies integration, and, most significantly, increases sales.
There are plenty of useful tools that you can use to build a sales funnel. Some of the most prominent tools are ClickFunnels, LeadPages, Kartra, GetResponse, Keap, etc.
Interested in learning more about funnel builders? We have an entire article about the best small business website builders, including the best platforms to build sales funnels.
Sales funnels are often neglected, and underserved, and that seems strange to us. Many startups who are dependent on online sales are simly unaware of the strategy, but thats changing. Savvy business owners are begining to deploy funnels as a tactic, and with good reason: if created properly, they can deliver a dizzying number of sales and make a huge difference to profits.
It takes time to construct and optimize a sales funnel. A good funnel will help address the minor issues often overlooked. For example, something as trivial as font selection and color will make a big difference to sales.
Take your time with funnel building, do your research or use a third-party funnel builder, and you will identify these issues, which, when combined, will almost certainly lead to more sales.