Why Use a Sales Funnel For Marketing – What is a Sales Funnel Anyway?

I tend to picture all digital marketing as part of a sales funnel.

During a recent email exchange with a friend I wound up explaining why I look at it this way.

I’m sharing what I wrote with you, in the hope that it will increase your understanding of what it takes for your business to do sales and earn revenue online.

A brief sidenote: there are many people who teach optimal ways of doing sales and digital marketing, and one of my favorites is Perry Marshall, who you’ll see me refer to below. Not only is Perry unusually perceptive and ingenious, he’s considered by many to be one of the most ethical marketers in this field which is especially rife with charlatans. Dan Kennedy says “If you don’t know who Perry Marshall is — Unforgivable”

 

It is assumed (by me) that we all want sales …

… at least all of us who are in business and engaging in web & marketing activities

To get a sale, a “customer” has to

1) Find you
2) Buy

That’s the simplest depiction of funnel in the world:  Click, Buy

Don’t you wish it was actually that simple? 🙂

We all know that when you try do this “Click, Buy” thing online there is far, far more to it than that.

So the art and science of “Click, Buy” is what we as marketers spend all this time and energy to accomplish.

The trouble comes that when we start breaking “Click, Buy” into practical steps, it can get really complicated, and really confusing.

The easiest way to begin picturing how “Click, Buy” actually happens online is to think of it like this instead:

Traffic > Convert

Also, what’s a Conversion, is it a purchase? Is it something else like subscribing to an email list or downloading a coupon?

Traffic > Convert > Buy

Try to picture in your mind that the funnel is actually the series of steps in a journey, the sequence of actions someone takes to become a customer and buy. (It might be more accurate to call it a collection of events, since the “sequence of actions “quite often occurs in many different orders)

And as professional marketers we know there are so many layers of Position, Persuade and Educate that go in the middle of the “funnel”.

Traffic > (Position, Persuade and Educate) > Convert > Buy

There are so many schools of thought on how to do this. All the professional marketing trainers (the “gurus” at they are often called within Internet Marketing circles) have lots of different ways of accomplishing this.

The way Perry Marshall depicts the “Position, Persuade and Educate” part is:

TRAFFIC: The PPC Ad attracts eyeballs and gets the viewer’s (searcher’s) attention.
POSITION: They click on YOUR ad, not a competitors
PERSUADE: They like your page, it’s speaking to them, the content on your pages is entering the conversation in their head, they decide they actually LIKE you or your brand, they DON’T bounce away and leave.
CONVERT: They opt-in to your email list. WHY? Generally because of a lead magnet, such as a free email course, free PDF download, free video, etc.
PERSUADE AGAIN: They like that thing they got for free in the previous step. They like YOU, or your brand, even more. They want to know or get more of what you have to offer.
CONVERT AGAIN: They consume more. They either opt into more and more things for free, or read more or more emails, or …
BUY: … or they buy something

One of the oldest and most trusted ways to handle the “Position, Persuade and Educate” aspect is to use an email list, the best marketers use a carefully crafted email auto-responder sequence. Others run an email newsletter, or send out content, or “specials”. In case you ever wondered why so many companies are so eager to get you to subscribe to your email list …. now you know why!

In the world of marketing, its generally taken for granted that the worst possible combination is:

Cold Traffic > High-Priced front-end Sale

(cold traffic is fresh visitors or prospects who’s never heard of you or your brand before).

Cold traffic to a big expensive purchase is very hard to do.

Mechanisms and tactics like Sales Letters and VSLs were invented to try to make that combination viable.

In general:

… the lower the front-end price,
… and the longer the Position / Persuade / Educate process
… the easier it is to get the sale.

Once you’ve sold someone one thing, it’s much easier to sell a second thing to them, and then to create loyal customers or clients who will buy again and again. (So says all the gurus, including Perry. As an example, see Perry’s book 80/20 Sales and Marketing, in particular the chapter called RFM: 80/20 in 3D.)

So one tactic to get this ball rolling is to use a “tripwire”.

A tripwire is a tiny purchase that is the first and easiest sale.

$7 of course.

Or anything less than $47

Tripwires are a what we call a front-end sale, but they are very rarely profitable on their own. Really they are not so much the start of the sales process as they are a bridge right at the end of the initial advertising & marketing process.

Once someone has bought your trip wire, to be profitable sell to them again.

About Maze 1.0 vs Maze 2.0

Perry described the basic system of using digital marketing to build a sales funnel in his Ultimate Guide to AdWords:

Traffic > Page/Website > “Benevolent Chinese Water Torture *”  via Email Auto-responder > Convert

Last year while talking about his ingenious new Maze 2.0 system and “the Death of the Web”, Perry dubbed that as “Maze 1.0”

“Maze 1.0 was Linear. Maze 2.0 is Spacial”

Maze 2.0 picks up where 1.0 left off and is oh so much more sophisticated.
Its based on advanced retargeting strategies,
… on your brand, your ads, your content, being seen everywhere
… on hitting people up in as many different ways, through ad many different channels, with as many different offers, modalities and angles as possible.

In other words it replaces the simple liner auto-responder-after-opt-in with a very advanced system of “Position, Persuade and Educate”

* the phrase “Benevolent Chinese Water Torture” was coined by Perry, it refers to the process of (benevolently) accomplishing “Position, Persuade and Educate” with a slow but steady trickle of emails. Drip, Drip, Drip …

How to structure a digital marketing funnel for optimal sales

In the framework of a funnel,
Free lead magnets go very early on, either immediately after traffic or after some free content has been consumed
The purpose of the lead magnet is to either get opt-ins or build a retargeting audience (or both)
Typically email auto-responders and retargeting come next,
and then low-priced entry level trip wires go somewhere in the middle
followed up by additional sales mechanisms to increase the secondary, “back-end” sales: which raises cLTV (customer lifetime value: the amount a customer spends in the long run) and ultimately brings in more revenue.

Profit, as distinct from Revenue, is a topic for another blog post.

Just keep in mind that you can earn a million dollars in revenue and still only have a small net profit.

If you’d like us to help you design and build your digital marketing sales funnel, or even just have a question about it, feel free to contact us any time.

About the author

Digital Marketing Consultant, AdWords PPC Traffic Specialist and certified ASK Method Associate. My goal is to deliver the best start-to-finish high-performance digital marketing my clients could ever hope for.