Your Online Marketing Funnel
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Below I will describe your online marketing funnel.
Please take good notice, as this is one of the most important things you will learn in Internet marketing.
You will soon see, that this system serves as an online marketing umbrella an why it’s a great alternative to the Ready? FIRE! Aim marketing system.
And now that we know all about Pareto’s Principle, this will make more sense.
You use your “online marketing funnel” model in a targeted market where you want your visitors to make a small purchase (yes, providing an email -or, for offline marketing, a physical mailing- address is a kind of payment), and eventually you “funnel” your buyers step by step towards increasingly high-end products and services by selling them to the next level.
So by “funneling” (also called “up-selling” or “backending” -Dan Kennedy calls it “gathering the herd”-) your prospects into leads and paying customers, you set the stage to offer fantastic value to them.
You even want to deliver so much value that your clients eagerly start to look forward to getting content from you. And by delivering that value comes the chance to take your client to the next level, where you can offer and sell higher-end goods to her.
This is a two-edged sword as both you and your client benefit by this relationship.
Your client benefits when she gets more and more value…something she genuinely desires. You’re aiding her in that respect.
Needless to say you profit likewise by slowly fine-tuning your client to your “A” list, where you can supply even more value.
The figure below shows the typical online marketing funnel. Note that for offline marketing the only differences are at the top of the funnel, concerning the way in which you get your leads.
Online they are your website visitor and provide you with their email address (and maybe name) to become a lead.
Offline, they would get your offer in some other way.
Observe how the funnel width gets smaller towards the bottom! It symbolizes the client numbers at that stage of the funnel.
Realize however that the smaller the width, the more cash they are spending with you.
In other words, the sum of money they spend with you is (more or less) inversely in proportion to the width of the funnel.
Where did we hear that before? Yes, Pareto’s Principle!
Now you can see that the 20 percent of your clients, generating 80 percent of your revenues, are at the funnel’s bottom. The other 80 percent that brings in the remainding 20 percent are towards the top.
This is not a mathematical absolute, but more a general observation. As stated earlier, these figures might be 70/30 or 90/10 or somewhere in between.
This is no coincidence. Your biggest advocates, your “A” customers, are in the smallest section of your client base…the bottom of your online marketing funnel (but the top in terms of the value you deliver to them).
To gain an excellent understanding of how the funnel works, let’s walk through each step.
- Your prospect enters the funnel by replying to your “ethical bribe” or incentive by handing out their contact information. Now she’s a lead on your mailing list.
- You start to supply more value to her, as you wish to turn her from a non-paying lead into a paying client.
That’s why you present her your front-end, or entry-level, offer on a product or service directly related to the incentive she received when joining your list.
You may decide to offer your front-end at a break even or even an initial loss and make up for it on back-end sales, but you must be quite sure of your conversion rates to calculate your chances. - If she doesn’t buy your front-end product immediately, you proceed to sell her on the same or similar front-end offers -ideally both-, since at this moment she just may not be ready for your initial offer, but may be later.
- As soon as she buys your front-end product, she has now become a client. You are now “warming her up” to doing additional business with your company. If she experience that you over deliver on your value promises, she’ll feels comfier purchasing from you over again.
- Since you would like to graduate her to your next price level, you offer her a higher-end product or service related to the front-end one she already bought. You follow a similar approach as step 3 above if she doesn’t purchase. That is, you continue to make her offers, only this time on the mid-level product range.
- When she buys your mid-level product, you move onto the high-end ones. She is now conditioned to purchase from you with confidence and without concern, because she’s already familiar with the outstanding value you provided her.
She’s experienced the solutions of your products first hand, so her buyer’s resistance is brought down. She is now rapidly approaching the “A” clients status. The 20 percent bringing in 80 percent of your revenues. - You keep going to sell her higher ticket items and supply your absolute best value to her.
These steps represent a very simplified approach. If you really desire to be successful in the end you’ll soon discover that there is much more to it , but it’s not rocket science by a long shot.
Here’s an example.
Every time your client buys from you, you’ll want to offer up-sells and cross-sells.
Up-sells are more high-priced styles, grades, finishes, distribution rights, options, or a bigger version of the product (“Do you want to super-size that?”). Very often up-sells are presented as One Time Offers (OTO’s).
Cross-sells are complementary items that go along with the product. Extra paper, ink, blank media, private label articles, or even a carrying case, whatever (“Do you want fries with that?”).
After the sale, you’ll want to do everything in your power to make sure she is satisfied.
Of course because you want her to buy again from you, but also to ask for a nice testimonial.
Plus you also want to reduce your refund rate and gain her endorsement. You wish her to tell all her friends and colleagues about her positive experience with your company.
And that’s because people are more likely to tell others about a bad experience with a company than when they have a nice experience. You want to have them tell others about their nice experience.
The next step is to build up some kind of recurring income, where merchants pay you so much a month or year forever until the clients you referred to them cancel.
Of course not every of your clients will do that, but your best chance is with your “A” customers.
If possible, you should create different residual levels at different price points, just like you offer different product levels.
Well, there you have your online marketing funnel system.
Make sense?
Post your comments below!
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While I understand that your model is simplistic I think it oversimplifies the engagement to sales path. Depending upon the product or service provided there are many prospects who would never need or want to progress to the high end product. Recognising the specific needs and desires of prospects is what brings value to a relationship that is in development
Case, I’m curious what your thoughts are when you only have one product to sell how the above advice works. Especially when the product isn’t informational. Instead of upselling another product after the initial sale would you then offer the same product in multiples at a discount price?
Yes, that’s one option. Or offer different options for that one product.
But…
You never just have ONE product!
Go to Google and type in +”sleep remedies” +affiliate (just copy and paste) and see what comes up.
LOTS of products.
Also, people who can’t sleep well are often tired and depressed. Offer solutions for that too.
Then turn the more positive way: be fit, more stamina, feel healthy, etc. and the world is yours.
By the way, the very best method of finding out what your customers really want is ask them.
Build a list of visitors giving away good info and then ask the question. Simple as that!
WOW… What a great post. I just wanted to add one more thing and that is: if you want to retain the customer then give them some thing of value. Like if you a website related to books then give them useful information about books and try to cover all the aspects.
Your article is amazing. Keep on doing a great job
As somebody with a marketing degree who is always writing articles on the net and attempting to create value, I can tell you that it is not easy. Thanks Bill
I have been an internet marketer for over 5 years and I definitely agree that this is the way to go about it. IM success is all about funnelling your visitors to your desired action for them and then creating relationships to keep customers for life. Your advice certainly does make sense. Great post!
~Trent Brownrigg
Hi
This idea of gradual level customer is very understandable. and i have a feeling that this is the natural approch many a times the customers do jump between these levels depending upon their spending decisions. so its not a one way thing but i feel that for a unerstanding of the whole its a nice approch
thanks and keep up the good work
@Stevens
Yes. One product is never enough to convert visitors into potential customers. You need a range of products for them to choose from. My advice is to pro-active and engage your leads steadily.
Rif Chia
I started a terrible website not long ago and quickly learned that to succeed on line, one needs to treat their website or blog as business and develop a well thought business plan.
I have been following your articles – Case, So far this too is as informative with concrete information like the rest of your articles
Whew… after reading this I really realize how much I have to learn about marketing. I always kind of knew a little about the 80/20 rule… though never in this kind of depth. Alright, one down, onto the next article. Thanks for the info!
What I would say is that it helps to have more than one front-end product. Customers have slightly different preferences so catering to these at an early stage will help to move people down the funnel quicker. The recurring income part is good advice though – the internet offers the prospect of automation so as many businesses as possible should look to build a recurring element into their online business.
Hi
i tried to follow the method today and am still in the way to update the recod but the success of the system is evident and one can safely say that it works more then seventy five percent of time.
Regards.
This was a fanstasic post on how the funnel process should actually work. The only thing I think that is valid to add in this is that its the type and quality of your follow ups during this process which helps to build that relationship.
Some people simply interpret this funnel idea as a means of throw more people into funnel = more money, but rather if you provide solid valuable content as opposed to sales pitch after sales pitch the people inside the funnel will be more responsive to your proposals.
It’s not the size of the list that counts but the quality. That quality is built only by building solid relationships with those people inside your funnel a list of 200 quality people can easily out perform a list of much greater size.
Repeat customers are obviously the goal as that builds residual income and that is the ultimate goal. The picture above does describe a excellent principle.
These are some helpful tips. Whilst I am new to this sort of thing, I think you managed to simplify the process well.
I am aware that it is not easy, not even for the experts out there.
This is a great post!
I don’t think that one product is never enough to turn visitors into potential customers.
Your advise makes a lot of sense. Thanks for all the info!
Hi Case, had been lurking around for a while and finally coming out from the dark to comment.
You’re right on spot when you recommend cross selling – especially for Internet business. And one of my favorite websites who do cross selling – THE best cross selling move online, is Amazon. Remember the magic link: “people who bought this also bought this”?
~ Best Regards, Jerry
Reach your potential customers early in their buying cycle: when they visit your website.
However qualify these visitors by examining the pages visited, the number of returning visits and the number of unique visitors from a single company.
Then add them to your funnel by cold calling on warm companies.
During their ‘stay’ in the funnel you can examine their further visits by their reactions upon your communications.
Thanks very much for the post and putting into words what I’ve been trying to do – I just didn’t know it! Like other have said, I am looking for repeat business and opportunities to cross sell, but it’s easier said than done when you are starting out!
Thanks
Mark
Thank you for the informative post on funneling clients. I’m new to the industry (as you can see by my very green learn the stock market site. I really enjoyed your Paetro Principle artice – as a process engineer I’ve been touting the principle for years – mostly with blank stares. Then I go and try to build a site with the concept of just add more pages and get more traffic. That’s a recipe for diminishing returns with equal effort.
Thank you for sharing your knowledge I look forward to digging into your archives,
Bill
For me, the search content networks are one of the biggest secrets in online marketing with search engines such as Google generating over a third of their revenue from the network, but some advertisers not realising their ads are being displayed beyond search engines and so not served for this purpose.
Google is the innovator and offers options for different formats of ad units including text ads, display ads, streamed videos and now even cost per action as part of its pay per action scheme.