What is a Marketing Funnel or a Sales Funnel?
Why it’s Important to Learn the Value of a Marketing Funnel
It’s vital to learn the value of a Marketing Funnel or most commonly referred to as a “Sales Funnel”.
The biggest mistake many online marketers make is selling a customer a single product one time and then moving on to the next customer.
This approach ignores the important concept of Lifetime Value (LTV) of a customer, and increasing the average LTV of your customers should be your primary objective, because it’s the best way to increase your long-term profits and grow your online business.For example, let’s say you are working in the health and fitness niche and you use a squeeze page to attract new prospective customers.
A squeeze page is a web page on which you offer something with a high perceived value for free in exchange for the contact information of the people who land there, such as their email address or phone number.
Point of Entry: Squeeze Page to Marketing Funnel
In this example, on your squeeze page your giveaway could be something like an exercise video or an eBook on healthy eating – both of which are something people interested in getting fit would likely be willing to trade in exchange for their email address.
An exchange is made, the prospect gets your giveaway, and you get their contact information. This is the beginning of the marketing funnel or sales funnel.
You have successfully attracted a prospect into your marketing funnel. Your next goal needs to be converting this person from a prospect into a paying customer. You do this by immediately offering them your Lead Product or your first offer.
Marketing Funnel Must Offer Irresistible Lead Products
Your Lead Product needs to be something irresistible to your prospect. It should have higher perceived value than your giveaway and be offered at a price point that your customer can’t refuse.
In our example, this could be a series of DVDs or downloadable videos that show how to do 200 fat-burning exercises that you are offering for $9.99. In the fitness niche, and at that price point, the conversion rate for this type of product likely will be very high.
Now here’s the tricky part. You’ve successfully converted a prospect into a customer and have earned $9.99, which is the current LTV of that customer.
Rather than being satisfied with that and allowing them to walk away, your next goal should be to start pushing them further and further along your marketing funnel by offering them a series of increasingly more costly products within the same niche.
Using the Marketing Funnel to Exploit a ‘Buying Mood’
After your customer buys your $9.99 workout videos, you can immediately offer them an upsell opportunity, such as a monthly subscription service that delivers 200 additional videos from a professional personal trainer for $19.99/month.
Frequently, when a customer already has made a purchase, they are in a “buying mood” and are more open to buying additional products. If they buy your upsell, their LTV has risen to $30.
Conversely, if your prospect declines your Lead Offer, you can try to recapture them with a downsell, which is usually a modified version of your Lead Offer at a discounted price. In our example, this might be the Top 10 Exercises for Fat Loss for only $4.99. Are you beginning to see how the Marketing Funnel/Sales Funnel works?
Recapturing Lost Customers Using the Marketing Funnel
Downsells are designed to convert your prospect so that they stay in your marketing funnel, even if you don’t earn as much from them on the initial sale.
Now that you have converted the prospects who landed on your squeeze page into customers and have gotten them to buy either your Lead Offer, your Lead Offer plus your upsell (or at the very least your downsell) you can continue to use their contact information to promote a series of increasingly more costly products over the next several days, weeks, or months.
To learn more about how an effective maraketing funnel can maximize your average LTV, check out our lead generation system by clicking here now.