What is a Sales Funnel? And How To Create One?

Today we will touch on a very important topic. The sales funnel. Known as conversion funnel, value ladder, sales funnel, sales pipeline etc ... Today we will talk about one of the fundamental concepts of Digital Marketing, it is an essential part of your strategy and is present in almost every business.

The sales funnel, it's not just for those of us in Digital Marketing... online or offline, an eCommerce or any business, if you have a business, and you have customers, then you have some kind of sales funnel.

Your sales funnel is not only for selling, it is a way to define the steps of your entire buying cycle... it is an important part of measuring, analyzing, predicting and improving your processes, so you can close more sales and get more customers.

If you have a business, you most likely have processes for:

+ Acquire new prospects or nurture your database (obtain registrations).

+ Convert these prospects into customers.

+ Make your customers buy more or buy frequently (or both).

+ Get them to recommend you.

Now, you may not yet have an automated process, but all businesses have some way of doing the actions we mentioned above.

So let's get started...

What is a sales funnel?

What is a sales funnel?

Here is a good definition of what a sales funnel is:

A sales funnel is a multiphase, multi-modality campaign that gently and subtly leads a prospect to a desired action.

Let's take a closer look at what we are referring to...

- Multiphase, Multi-modality: You don't convert cold traffic into leads, nor prospects into customers, all at the same time. A well-designed sales funnel anticipates every step necessary to lead the prospect to conversion.

- Campaign: Depending on the type of business and what you sell, a sales funnel may require different types of elements: sales appointments, consulting, landing pages, email follow-ups, phone follow-ups, visits to your store, etc. to achieve the end goal. The important thing to remember is that it is a whole process, not a single event.

- Friendly and Subtle: A well-thought-out sales funnel removes the friction that can exist between prospect and conversion.

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There are 3 types of general conversion categories that a business can implement:

-Acquisition - Discovery

-Activation - Consideration and Selection

-Monetization - Ascension and Loyalty

Each of these has a very specific role to play in your business.

An acquisition funnel should be designed to help the business acquire as many new prospects and customers as possible (or at least break even). In this phase, they discover you as a brand. Something very similar to meeting a person at the bar.

An activation funnel should be designed to help the business convert its prospects (or inactive customers) into qualified leads or recent buyers. In this phase, you are selected and considered. Using the same analogy as above, this would be the phase where you go on a first date.

... and a Monetization funnel should be designed to generate revenue from your active buyers and indoctrinated subscribers. In this phase, you promote and build loyalty with your current customers. This would be like starting a more formal relationship like dating or even marriage (we will see more about this now).

Every business should implement each one of these funnels, at different times, for different people.

So, now... Which funnel should we focus on first?

An Acquisition Funnel cannot do what a Monetization Funnel does, and a Monetization Funnel cannot do what an Activation Funnel does and an.... each focuses on a particular objective.

So you should have all 3 well-designed so that they all flow together... This is where the magic begins. (At least I think so)

Focus on building the funnel that would have the biggest impact on your business now. Once you've built that funnel, you can focus on the next one and then... the next one.

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The target (for now) is a funnel.

So, which of these options best describes your immediate business needs?

"I have to convert cold leads into qualified leads"... Build an Acquisition Funnel first.

"I need to convert my qualified prospects into customers"... Build an Activation Funnel first.

"I have to convert my buyers into repeat buyers"... then, build a Monetization Funnel first.

Let's look at each of these with some examples:

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1) Acquisition Funnel or Discovery Phase.

Objective: Acquire new prospects for the business.

Examples of Acquisition Funnels:

- Book/e-book/report/guide etc. Free

- Free trial period (Freemium)

- Offer value upfront (Free Webinar)

- "Chipping away" at your core product or offering.

The last 2 are our favorites and are super effective (have you signed up for our free webinar yet?)... let's talk about the last option.

What is this "chipping"?  The first thing to do is to identify that core product, service or offer (or a subscription/membership)... one that can be chipped or segmented so that a smaller offer can be provided to cold prospects.

Why make a lower offer?

Making a high-priced or high-commitment offer (so to speak) to a "cold" prospect would be somewhat similar to walking into a bar, introducing yourself to a girl and... out of the blue, asking her to marry you.

What we need to do is create an offer similar or equivalent to asking him to have a coffee with you, or buying him a drink... something low-risk, that doesn't make you look like a degenerate freak.

Even if your ultimate goal is to get married, there is a sequence to follow, the best you can do is to split, or as we have said on several occasions, chip away at your product and generate a low-risk offering.

For example:

• Do you sell Digital Marketing Services... You could offer a free fan page setup to cold prospects in exchange for their contact information.
• Do you sell Nutrition courses? How about offering a recipe book relevant to your cold prospects in exchange for their contact information.
• Do you sell online courses? "Chip" a guide relevant to your niche and offer it at no cost to cold prospects in exchange for their contact information.

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2) Activation or Consideration/Selection Funnel

Objective: Convert a considered number of registrations (leads) into buyers.

Unlike acquisition funnels, the Activation Funnel requires a little more explanation: Why are we interested in "activating" buyers?

-Once a successful purchase transaction has occurred, the likelihood of a second (and third, fourth, etc.) purchase is much higher.-

⚠ Important: The goal of the activation funnel is the QUANTITY of converted customers, NOT the profit. The profit comes later, when the "activated" customers enter the Monetization funnel.

Examples of Activation Funnels:

• A simple survey.
• Special offers (Flash sales).
• Exclusive offer for members

... one of the most effective is the Flash Sale.

To activate your buyers or members, you must answer this question in your prospect's mind: Why should I buy NOW?

Will the price increase soon, is there a quota, or limited stock, an offer that no one could refuse?

An activation funnel like this one has 2 proven triggers or boosters to activate users:

- A VERY good discount.

- It is for a limited time only.

You've probably heard of "Weekend" or "Black Friday" promotions... those I'm sure you remember. The goal in these examples is ACTIVATION, not profit. Offer as much value as you can at the lowest possible cost.

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3) Monetization or Ascension Funnel

Objective: To generate as much revenue as possible from your current customers and already indoctrinated prospects.

Examples of Monetization Funnels:

• Free Webinar (we love this one ?).
• Launch of a Mini class/course.
• Live event.

One of the most effective strategies is to simply ask a magical question:

"Need help with ______?"

This works in almost any niche market...

• Do you need us to help you with your retirement plan?
• Do you require us to help you with the creation of your digital strategies?
• Do you require help with your nutrition plans?
• Do you require help with the creation of your website?

For this, the ideal is to create a landing page, once they have registered with their data (remember that this is the only purpose of the landing page), then, on the thank-you page, you can show a video in which you explain the values and benefits of your product / service of high value, and now if....

• You can ask them to make payment, or make a deposit to secure their spot/offer.
• Take them to a form to get the information you need to qualify them, and close them on a call.

With all this in mind, we can see why this last question does not apply to a "cold prospect"....

... going back to the example at the beginning, it would have been crazy to ask that girl to marry you the moment you met her, don't you think?

Eventually, the 3 types of sales funnel: Acquisition, Activation and Monetization should be implemented in your business.

Finally, the 3 types of sales funnel: Acquisition, Activation and Monetization must be implemented in your business.

Once you are taking advantage of the qualities of the 3 types of sales funnels, you will be acquiring new prospects, activating buyers and at the same time they will become regular buyers.