How does a sales funnel work?

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A sales funnel is a carefully constructed path for a customer’s journey towards the purchase of goods or services, designed by the business for maximum revenue and brand loyalty. It is also commonly called a revenue funnel. In this process, a company identifies the buyers of its products, attracts them into making a sale, and then attempt to make more sales through upsells, downsells, and cross-sells, qualifying customers into different categories along the way. It consists of several steps, and there are several different working types of funnels.

Let’s break it down.

Sales funnel can exist for almost every kind of business, but it’s more easily seen and defined in eCommerce. Before proceeding further, let’s understand it by a simple example of a pain-relief vitamin website. Let’s say a customer seeking relief for foot pain finds an ad about a new finding on a certain vitamin, that the most common cause of foot pain can actually be a result of a deficiency in this vitamin. The business paid for this ad. This interests him, naturally, and it isn’t selling anything yet. However, the article is hosted on the store’s website or an affiliated site. Somewhere, there is a link to order a special discount on this vitamin.

Since it’s a physical product, the business gets not only a sale but also the customer’s information, namely their email address. From here, the business sends a series of autoresponder emails over the next few days, giving them tips on how to best use the vitamins with certain lifestyle choices. It’s all aimed at helping the customer get better. Along the way, these emails also sell a special joint pain relief video series. Someone who finds this relevant to their situation may then choose to buy that as well. Those who buy that are moved into a new sequence of emails to help them get the most out of that video program, and sell other items that are even higher value, like coaching on fitness for joint pain relief. And up and up it goes.

The reason it’s called a sales funnel is that it narrows the further it goes. You go as wide as you reasonably can, attracting cold traffic Maybe 10 percent of those people buy the product and end up on your list. Out of those, 10 percent buy the video series. Out of those, 10 percent buy the coaching, and on it goes. The end result is that you create a pathway that identifies the customers most willing to spend money on whatever you most want to sell (the really pricey stuff) in the process of also attracting a maximum number of lower-level leads. It’s a natural process that doesn’t feel incongruent to the buyers. If they only want to buy one or two things and go no higher, no problem. It’s expected that a smaller and smaller portion moves further down the funnel.

Well, the above is a general example of a basic, frontend funnel, meaning it takes brand new, unqualified traffic and turns as many of them into leads and repeat customers as possible while attempting to upsell top-quality customers. There are also backend funnels, made for people who are already familiar with the brand to get them to buy higher-value products or affiliated products.

To understand sales funnel and their inner-workings in a practical way, Russell Brunson, the author of the book DotCom Secrets, discusses them very well. I have recently read it and found it useful for anyone who wishes to get the best results from his/her online business, in terms of sales. I am implementing the points learned from the book now, especially the ones relating to sales funnel design.

Please feel free to leave me a reply if you need clarification.

Good Luck!



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