Funnel Strategy

5 Stages In A Sales Funnel

Funnels

Sounds scary right?

Well it may have a big name, but it is a simple concept.

The sales funnel is older than you would think. The history of the sales funnel dates back to 1898, when E. St. Elmo Lewis described a customer’s experience from awareness of the business to the point of purchase. Today, the  funnels continue to describe the customer journey, but it has evolved greatly to become the modern marketer’s most powerful tool – especially when applied to website design.

Popularized by Russell Brunson and his Funnel Hacker movement, the Sales Funnel has revolutionized how many businesses sell online.

But what exactly is a Funnel and how does it work?

A Sales Funnel describes a customer’s journey from first learning about your business to the point of purchase (and often after the purchase). When translating this concept into an actual website, a Funnel is a series of web pages that direct customers towards a purchase. Every page has a simple design, with videos, testimonials and information. However, every button on the page links to only the next page in the series.

Let’s run through a typical funnel you would come across

  • You see a pop-up box asking for your email address before you can access a free marketing checklist.
  • After submitting your email address, you see a sales page with a video at the top. The video starts playing and there’s a guy introducing you to his new e-book. It’s a pretty cool video so you decide to read more.
  • You scroll down and you learn more about the marketer himself, a sneak peek into what’s in the e-book, and even some testimonials on how helpful it is. You click “Buy Now” and the page scrolls to a checkout form.
  • You add in your card details and pay for the book.
  • After purchase, you see a few more pages that sell other courses and learning materials. Some are interesting so you add them to your purchase.
  • You finally reach a Thank You page with the must-have checklist promised on the first page (the one asking for your email address).

In fact, you can take a look at the funnel for Traffic Secrets, written by Russell Brunson, founder of ClickFunnels and the godfather of the entire Funnel Hacker movement. Take notes!

Congratulations. You just went down a funnel.

But how does this help to increase sales?

Let’s get to business.

Funnels

The attention span of the average human has dropped considerably – from 12 seconds in 2000 to just this – 

8 seconds

That’s it.

While this may just be a fun fact to the rest of the world, this means a lot to us marketers. We will have to adapt our strategies to bridge businesses to this new generation of consumers. And one of the biggest assets affected is our landing pages.

The traditional approach is to drive traffic to a website where people can browse and buy. We see this commonly in e-commerce online stores with Shopify etc. When you build a brand, an online store is useful. It gives customers the freedom to explore your catalog and choose from the whole collection of your products.

Shopify Store
Example Shopify E-commerce Store

Funnels, on the other hand, are engineered to direct people to one action you want them to take. In marketing terms, you optimize for conversions. There is usually a simple page with a box asking visitors for their email address in order to access some free content that would help them greatly (we call this a lead magnet). After exchanging their email address for access to the lead magnet, they hit a sales page.

Everything happens on this page. There is no home menu, no “about us”, no external “contact us” link. You will take the visitors through a scroll down page with introduction videos, pricing details, testimonials and other elements. Everything on this page should build towards making the sale. Cut everything in traditional websites that do not help in closing the sale. When people don’t stay on websites for long, and when everything is being viewed on mobile, we simply cannot afford to leave any distractions on screen.

If we think of a Shopify store as a built-out shop, then a funnel resembles more of a booth.

Funnel Stages

According to the AIDA model, the customer’s journey through a sales funnel can be described in 5 main stages – Awareness, Interest, Desire, Action, Retention. Each stage is classified by how attracted the potential customer is to what you are selling, and how close you are to making the sale.

A – Awareness

Someone sees your ad, searches a relevant keyword on Google, or finds your website on social media. They click on the ad and land on your website. This first page they see is called your landing page.

I – Interest

Interest is when you have captured their attention and they are now interested in learning more. They have started to look for solutions to their pain points, and are considering you as an answer to their questions. 

Now, on your landing page, the visitor is first greeted with an amazing offer – some free information (the lead magnet) in exchange for their email address. Most people are completely fine with giving their email address if your lead magnet is something that your visitor wants, and would benefit greatly from. This is a golden opportunity to win them over if you provide valuable and relevant content.

Now that they have subscribed, you send them over to your sales page.

D – Desire

Desire is when they are now on your sales page and are going through your content. They were keen enough to reach your offer and are giving you a chance to convince them. They are now gathering information on your business, browsing through your different packages and offers to make a decision. But remember, all the copywriting, sales videos and image creatives here are meant to lead them naturally to the purchase. Every main Call-to-Action button here should link to the checkout form.

A – Action

Action is where the purchase is made. The customer has gone through your sales pages, tuned in to your webinar, or looked through your online store and is now committed to buying from you. 

Because everything in your funnel leads towards this point, you are going to see higher conversions and more sales. People won’t click away, read other parts of the website and decide not to buy. A funnel is focused and delivers on exactly one thing – to get visitors to buy

R – Retention: Action 2.0, 3.0, 4.0

Oh but it does not end there. Often, just selling one product, you would not be able to recover the advertising cost of bringing that one visitor to your website. So what can you do?

You sell again. 

This is exactly what you experience at McDonalds. 

“Would you like to make it a meal for just $1.50?”

“Would you like an upsize for just $1.00?”

“We have a promotion now where you can get 2 apple pies for just $1!”

And you end up spending twice as much as you wanted to spend when you first walked into McDonalds. 

This is called Upselling (or Cross Selling).

Post-purchase Funnels and Upsells

This is the secret to making advertising profitable from the start.

Like McDonalds, we will promote related products and order upgrades to customers after they have purchased our first product. When we bundle these products and provide these amazing one-time-offers (OTOs), that’s where people are open to buying more. 

Everyone loves a good deal, and these customers were already interested enough to buy your first product. When you present this amazing deal to them, they are already a lot more likely to upgrade their orders.

However, just like in a normal funnel, not everyone may take up this offer. Still, by showing these offers and making those extra sales, this could be the difference between making a loss and earning a profit. 

Simply put – if you don’t have upsells, you may be leaving money on the table.

Funnel Example

Let’s look at an example of how having an upsell funnel dramatically improves the outcomes of an online business. By simply asking interested customers if they would like to add more to their order, we can turn an initially unprofitable offer into a workable one. 

No Funnel

Say we were selling a bottle of supplements at $30 and the manufacturing and shipping cost of the supplements averages at about $10 per bottle. Now, suppose we need to spend $250 in Facebook ads to bring in 500 visitors to our website, but only 10 visitors buy. This means that we would actually be making a loss of $5 per bottle. We would literally be losing money to sell our products. 

10 Initial Sales = $300

Manufacturing and Shipping Cost for 10 Bottles = $100

Advertising Cost = $250

Loss = $50

And the surprising fact is that this is what many online businesses do – take a loss on the first purchase, and hope that the customer returns in the future so that they can recover that loss and start making profits. This may work for a few customers, but it is hard in the long run to keep making profits this way. 

With Funnel

Now let’s implement a funnel. We spend the same $250 to get the 500 visitors. They reach the first page and provide their email addresses. Then out of the 500 of them, only 10 buy the supplement. At this point, we are still making a loss of $5 a bottle. But after the purchase, you offer them a one-time discount to upgrade their offer and buy 3 more bottles. Maybe only 3 customers take the upgrade. Then you upsell another type of Supplement B that has similar manufacturing and shipping costs. Even if only 1 customer buys, you now have made:

10 Initial Sales = $300

3 Bottle Upsell = 3 x 3 x $30 = $270

1 Supplement B Sale = $30

Manufacturing and Shipping Cost for 20 Bottles = $200

Advertising Cost = $250

Profit = $150

Great! You are now profitable. This means that you can re-invest these profits and keep scaling your ads and campaigns.

Also, remember the email addresses that you collected at the start? You can now send promotional emails to your visitors regardless of whether they bought your supplements or not. Every sale you make from here is pure profit. Which brings me to my next point – customer retention.

Retention

Retention is an often under-looked part of the sales funnel that many businesses do not prioritize. This is where email marketing and customer support come in. We want to create an amazing customer experience that keeps bringing people back.

Why?

Because happy customers are a source of long-term revenue, and some may even become advocates for you. Especially when social proof is one of the most crucial aspects to closing a sale, having your customers do your outreach for you is, needless to say, very powerful.

So keep your customers engaged and respond to their feedback and requests. There are a variety of channels you can reach out to your customers and I’ll be listing some examples below. By having touch points on various platforms, you can create an omni-channel experience. This builds your brand and keeps you at arms reach from your ideal audience.

Emails

Email marketing is one of the oldest tricks in the book, and for good reason. It works. With a variety of autoresponders out there, you can definitely schedule and automate your email marketing efforts.

Messenger Marketing

Chatbots are rather new in the world of digital marketing, but with mobile usage on the rise, Messenger Marketing is a powerful channel to send live updates. While email marketing efforts usually see low open and Click-Through-Rates, messages see exceptionally high proportions of opens and clicks. Messenger Marketing may very well be the next frontier for retention strategies.

Community Events

Community Events like challenges, webinars and watch parties on Facebook are great at retaining your audience while driving sales. For someone to take up your challenge or tune in to your webinar, they are already pretty engaged. These are warm leads that just need more convincing and persuasion before they start purchasing. That’s why it is recommended to use smaller events to build up hype and have a clear Call-To-Action at the end of your major events.

Having community events also builds rapport and helps your customers find a common identity with your business at its core. Build your tribe, and the results will come in.

Polls, Quizzes and Surveys

Quizzes and surveys are often used for a few purposes. One would be to learn more about the customer. But looking deeper, these questionnaires can also qualify your leads. In other words, it engages the visitors who are more likely to buy, while filtering out those who aren’t.

Blogs

Running an active blog is a great content marketing strategy. It helps you build your authority, while generating interest. Besides, it could even drive organic search traffic to your website by adding to your SEO (Search Engine Optimization) efforts. Sharing regular blog posts are also a good way to engage your email subscribers with lengthier content that wouldn’t work in an email.

The Long Run

A stagnant funnel produces stagnant results.

That’s why you should always be refining your sales process and optimizing your funnels. Some recommend focusing on running split tests and relying on the results to make changes to your funnels. However, we advocate a more balanced strategy. You should definitely continue to run split tests and optimizing that way. But we do also recommend being direct and asking your audience a few questions to guide your future content generation efforts. This could even be part of a larger engagement strategy to create awareness of your business (top of funnel)!

  • When it comes to xxx, what is your one greatest challenge?
  • What are the tools that you use for xxx? We’re interested to learn about your experiences!
  • What are your xxx goals for this month? For us/me its xxx!

Every improvement matters.

Because every change you make will impact the sales you see now, and every sale after that. If just a 1% improvement can drastically shape the future of your business, the best thing you can do is keep talking to your customers and keep optimizing.

It’s a lot of work in a concentrated period of time.

But it’s worth it.

Because you are just one funnel away.

Join the One Funnel Away Challenge where Russel Brunson, founder of ClickFunnels introduces a checklist for entrepreneurs to work on to build their dream businesses. You will get a new task every day for 30 days straight. Every task is specially crafted and scheduled to accelerate your journey in funnel building. Finally there are 3 live training sessions a week with elite coaches and consultants so you get customized help with your funnels.

1 thought on “5 Stages In A Sales Funnel”

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