As a new contributor to YoungEntrepreneur.com I want to talk about a topic that is probably at the most forefront of doing business online, and that is the online marketing sales funnel. Obviously the nature of the internet is that it is fast-moving, and there seems to always be a site, or a way of doing things that is the best or the newest or the most lucrative.
However one thing always remains the same, and the principles and concepts should be applied to whatever medium you are looking to use to market your business online: It’s your online marketing sales funnel. So what is a sales funnel? Essentially this is the process your leads, prospects, and customers move through online in order to reach their ultimate destination, i.e. buying something from you.
In fact as a business owner who has had experience with both online and offline businesses, I have found that once you learn to structure your business around a sales funnel and view your business this way, you can increase your revenue dramatically. So how does it work?
Ok, you’ve probably heard the statement, “The money is in the list.” This is true – no matter what your business; no matter what stage of development it is in, you should ALWAYS be looking to increase the number of people in your list. I’m sure many of you do coaching or have service-based businesses that require a small number of customers to keep your business alive; however due to the volatility of this arrangement, you have good times and bad times. If you lose a few clients in a couple of months, you have to start growing until you have a full client load again.
The sales funnel process is there to ensure that this never happens. In other words, you want to create a predictable, scalable business model that will produce a more predicable cash flow, and new clients when you need them. Sound easier said than done?
Let me explain how the sales funnel works…
Essentially, most marketing is focused on getting people in the door or to a website – creating traffic. This is generally the most expensive or labor-intensive aspect of marketing. The problem is, most people don’t look to capitalize on the traffic they do get in. In other words, when people come to your business or website, they either buy or they leave.
However we all know that not everyone is ready to buy now, or may not necessarily find the solution to their problem from you straight away. Therefore instead of losing these people forever you need to focus on capturing that information in a database so you can market to them on an ongoing basis. From an online perspective, the best way to do this is giving them something great for free – free reports, trainings, or samples are great for this.
So they are in your database. The next step must be to get them to buy something. Because you can market to them over and over again, you don’t necessarily have to rush the sales process, however you do want to give them an option or reward them for buying early. The key thing here is you don’t throw at them a $10,000 coaching program; instead you want to introduce them to a low-cost information product, low cost package, training, or something along those lines that they can buy from you for $10 to $30. Adding a low-cost product like this can effectively enable you to offset all of your marketing expenses.
After you have introduced them to this, you can then introduce your higher priced products and services. So you should have multiple levels of products and services. For example, have a product or service that costs $200 to $500, then a high-end product that costs $2000+.
The entire process means that people not only buy more from you but also you continue to establish a strong relationship with them, and increase the number of customers that you do have. This should be a long-term strategy for your business that you focus on continually. Grow your database, make lower end sales, and feed into your higher end services and products. In other words, you are increasing your revenue but at the same time creating a business that is less volatile.
With the tools that are available online, you can pretty much automate most steps in the sales process, so that all you need to focus on is increasing traffic to your website. And of course increased traffic means increased database size and increased sales.
Mark Blomeley is the founder of Social Media Branding Australia, a company that specialises in training business owners and managing social media campaigns for small, medium and large businesses. Read more about Mark here.
