An online sales funnel is a multi-step system designed to bring people through the process of becoming a buyer. Most people won’t just pull out their credit cards or decide to walk into your business the first time they hear about you. There’s a level of familiarity, value and trust that needs to be built before a buyer is psychologically in the right mindset to make a purchase.
In digital marketing, traffic is categorized into 3 “temperatures” based on where they are at in the sales process:
1. Cold traffic refers to people that have never been exposed to your brand and have no idea what you have to offer.
2. Warm traffic refers to people that are aware of the “solution” that your business offers, and may have even heard of your brand, but don’t necessarily trust you and are not ready to make a purchase yet.
3. Hot traffic refers to people that already know who you are, like your brand and what you have to offer, and are ready to become a buyer.
A good sales funnel uses buyer psychology to ascends people through these temperature levels, exposing them to your brand and warming them up for a sale.
Stages of a Funnel
There are four main stages in a typical sales funnel that your traffic must go through to become buyers.
1. Awareness – The first stage of a funnel is where prospects find out that you even exist. They click your ad to enter your funnel and become aware of the product, service or solution your selling. Catching the attention of cold traffic and getting them into your funnel can be tricky. Making them curious or offering something for free are two effective ways to get them in.
2. Interest – Once prospects have established awareness and landed on the first page of your funnel, you need to build their interest for whatever it is you’re selling. The content on this page has to continue to warm them up by convincing them that what you’re offering is a valid solution to their problem. It is at this stage that you should capture their email address.
3. Decision – After a prospect is interested, the next stage is getting them to make the big decision to purchase. This stage of the funnel typically involves a sales page with a call to action. Getting prospects to actually make that decision is not easy. Often times they won’t make the decision the first time they land on your sales page. This is where having a strategic retargeting campaign and email sequence along with customer reviews and testimonials are crucial for fully converting warm prospects into hot buyers.
4. Action – At the last stage of the funnel, your prospect has finally taken action and become a customer. If you are tracking your funnel properly, you’ll be able to see exactly how much it cost to make this sale and what your return on your advertising investment is. But the process doesn’t stop there. Now that you have established a relationship and are dealing with hot traffic, you can follow up with them in the future through email.
Front End
The front end of a sales funnel is the initial process of converting prospects into buyers. The difference between your sales and ad costs determines how much you make or lose on the front end of your funnel. It is a game of data analysis and optimization to get prospects through your funnel to generate a sale at the lowest cost possible.
Micro Commitments and Pre-Frames
In order to maximize your front end success, each step of your funnel should have one, singular goal: move traffic to the next step. You shouldn’t be trying to make the sale at every step. Getting prospects to make small commitments at each stage, like giving you their email or simply clicking to go to the next page, make it far more likely that they will purchase from you at the end of the funnel. Think carefully about each step of your funnel and what mindset you want your traffic to be in for that step. Each page of your funnel should be pre-framing your brand and your solution in a positive light so that they’re sold on it before they even get to the sales page.
Break Even
As crazy as it may sound, you shouldn’t worry too much about making money on the front end of your funnel. If you can, that’s awesome, but your main goal should simply be to break even. If you can make enough front end sales to cover the advertising costs for your traffic, you’re golden. In fact, you can even take a small loss on the front end and still have an incredibly profitable funnel. That’s because in the world of digital marketing, the real money is made on the back end of a funnel.
Back End
Getting a prospect to make the first initial purchase is extremely difficult and requires building trust by providing value. But after they take that credit card out once and become a customer, something switches psychologically in the buyer’s mind that makes it infinitely easier to get them to buy again. This is where the back end of your funnel comes in.
The back end of a sales funnel consists of email marketing. Remember, after a prospect becomes a customer, they are owned traffic and you no longer have to pay to market to them. Your back end email sequence should grow your relationship with your customer. Now that they are sold on your brand and the solution you’re offering, you can offer them products or services that complement their original purchase and add more value at a higher price.
With a quality, strategic back end in place, you will exponentially increase the lifetime value of your customers, multiplying your revenue. That’s why the initial funnel that you take prospects through doesn’t have to be profitable up front. You can spend $30 on advertising to make a $20 sale, because that customer will end up generating hundreds or even thousands over time.
This is the “holy grail” secret of marketing. A sales funnel that breaks even will allow you to acquire customers at no cost so that you can make long term sales from them on the back end.
It can be a little bit difficult to wrap your head around these concepts, but once you truly understand digital marketing and sales funnels, your ability to grow and scale your business becomes limitless.
Building and optimizing an effective sales funnel is no easy task. It takes advanced knowledge of web development, copywriting, data analysis and buyer psychology. Scroll Online Strategies has the skills and expertise to develop a strategic, data-tested sales funnel that will acquire customers for your business on autopilot. You can get a hold of us here to discuss our services.
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