What Is A Sales Funnel?

You’ve probably heard of a sales funnel before, right? But what is it and what does it do? A sales funnel—sometimes called a marketing funnel—is the journey you take a customer on that transforms them from a browser into a buyer.

Sales funnels are the new websites. That’s because websites are dead. They’re yesterday’s news for a very specific reason. Why? Think about it for a moment. Websites offer dozens of different paths forward. Sometimes hundreds. That’s not very efficient, is it?

With so many choices, websites lead to overwhelm. Think about it yourself. Ever looked for a product by a company and found their website only to be overwhelmed by all the options? Well, sales funnels are the direct opposite of that. They’re designed to have one distinct path.

Sales funnels are magic little money-making machines because they take someone completely unaware of who you are (aka cold traffic) and convert them into buyers and raving fans who purchase again and again (hot traffic).

Traffic Temperature

An important concept in the marketing world is something we call traffic temperature. The temperature of the traffic is so important that if you get this one concept wrong, your sales funnels will fall flat on its face.

Why? Because the temperature of the traffic reveals precisely how you should speak to someone. It’s like walking into a room and seeing a bunch of people you don’t know. Would you speak to them like they’re your close friends?

Nope. And if you did they might look at you funny. People in that room are cold traffic. They don’t know you. They might be aware of you simply because you walked into the room. But that’s about it.

But let’s just say you walk up to a group of 3 or 4 or more of these people you don’t know. You’re all chatting in the group, getting to know each other. Then you start talking about something you’re mutually passionate about.

And then let’s just say they get so interested in what you’re saying they decide to exchange contact details with you to keep in touch and learn more. When that happens, cold traffic becomes warm traffic. That’s because they’ve shown an interest.

The final stage is hot traffic. Hot traffic is simply someone aware of you, interested in what you’re selling, and has already bought whatever it is that you’re peddling. And they’re likely going to buy again and again in the future.

That’s kind of like a sales funnel in a nutshell. You’re taking cold traffic, converting it into warm traffic by getting their contact details and then converting it into hot traffic by selling them something.

What Is Traffic?

But let’s back up a little bit further just for a moment. And let’s look at the goal of any marketer. If you’re in business or are interested in selling anything at any point in time, the concept of traffic is important to understand.

First, what is traffic? Traffic is anyone aware that you exist. Walking into that room filled with a bunch of people you don’t know is one example.

On the internet, the concept is the same. You see ads from a bunch of people you don’t know. Not just ads. You also see social media posts, videos, posts in Facebook groups, and so on.

The goal of a sales funnel is always to take traffic that you either control or don’t control, and then convert it into traffic you own. When you run an ad, you control that traffic. When someone clicks a profile link on your social media page, you don’t control that traffic.

It doesn’t matter where the traffic comes from, you have to convert that traffic into traffic you own. You do this by getting them to join your email list. Plain and simple. Because once they’re on your list, you can wave a magic wand and command that traffic to do what you want.

Whether they comply is something entirely different. But you are free to message them at will without paying for an ad or waiting for them to randomly show up on your landing page.

How Do Sales Funnels Work?

Sales funnels work by driving people down one direct path. This eliminates all other options. Meaning that there are no forks in the road. It’s a straight, line. One path. That’s it. And it’s the reason why sales funnels deliver some of the highest conversions in sales.

Sales funnels drive more revenue by filtering people through a predefined customer journey. First, they need to show up as traffic. That can happen through multiple sources of traffic you control and traffic you don’t control. They can come from Google, YouTube, Facebook, Instagram, paid ads, and any number of sources.

When traffic arrives it needs to be captured. Capturing traffic just means you’re adding that person to your email list. Because the real magic in sales happens once you can communicate with a prospect. If you can’t communicate with a prospect that traffic will just leave and may never return again.

But to capture the traffic, you have to give them some value in exchange. This is what we call a lead magnet. Lead magnets are valuable pieces of content that help solve part of the problem the prospect is experiencing. The more value you deliver here, the more likely they’ll be to purchase from you later.

Sales Funnel Stages

There are four primary stages of a sales funnel at its core. This is based on the AIDA marketing model developed by advertising pioneer, Elias St. Elmo Lewis. The AIDA model breaks a sales funnel down based on Awareness (A), Interest (I), Desire (D), and Action (A).

Your first objective is to get traffic to become aware of you. That can happen in many ways. It can happen organically through social media posts, YouTube videos, blog articles, and so on. Once they’re aware of you they have to raise their hand and show interest. That’s where your lead magnet comes into play.

The lead magnet allows you to grab their contact information. Once you secure their email, you move that prospect into your email sequences and follow-up campaigns. This is where you share stories, social proof and other valuable information to get the prospect to know, like, and trust you.

This creates desire. Once you have their desire, you can begin sending the prospect high-value offers. This is where you make the sale by getting them to take action. Once a prospect becomes a customer, you can move them into other funnels that are designed to ascend them up into higher-priced offerings.

The Value Ladder

The Value Ladder is a concept created by Russell Brunson that flips the sales funnel sideways to offer another perspective. Each step up the value ladder offers more value and is higher-priced.

At the bottom, you have your bait or lead magnet. That leads people to the next step, and the next, and so on. You can think of each step up the ladder as its own funnel. Because these don’t usually happen within the same funnel.

When you conceptualize this, you have to imagine moving people from one sales funnel to another. It can seem complex but it’s not. Once you understand how to ascend customers from one sales funnel to another, you’ll unlock the secrets of explosive business growth.

You’ll also notice a continuity program in the image pictured above. That’s a subscription-type service you create to ensure your company doesn’t have to keep acquiring new customers just to keep the lights on. It’s an ongoing way to deliver value on a monthly or periodic basis.

Take a step back for a moment and look at the value ladder pictured above with an overlay of traffic temperature. This gives you an idea of where the temperature plays a role in the sales funnel. At the bottom, your cold traffic arrives aware of their problem but unaware of you. That’s why you address the problem when speaking to cold traffic and not the solution you provide just yet.

This filters down to everything. Your lead magnet should address the problem and speak to cold traffic about how to solve the problem (or part of it) in a way that delivers real value. For example, Alex Hormozi’s GymLaunch features a multi-part video series that provides Facebook ad templates and walks them through precisely how to run a local Facebook ad for a gym offer.

I’ve gone through the video series and it’s very detailed with a lot of explanation. You might be thinking, okay now I have the solution. What do I need Gym Launch for? Well, the exact opposite happens. Once you deliver value like that, and someone gets results based on the free thing you’re giving away, what do you think happens next?

In the eyes of the prospect you just became their Savior. You delivered real value and helped them solve part of the problem. Showing people how to set up their first ad is not the same thing as launching and managing ads. People might receive the information for free. What they’ll pay you for is implementation.

Your Messaging

Most sales funnels fail for a very important reason—messaging. The way you speak to a prospect throughout each stage of the sales funnel is more important than you can imagine. That’s why I gave the analogy of walking into a room full of strangers to paint a very vivid picture.

The truth is that the way you talk to traffic at each stage can change the outcome of your sales funnel in an instant. If you send the wrong message at the wrong stage, your funnel will fail. Period. Send the right messaging at the right stage and your funnel has the chance to succeed at the highest levels.

When someone first becomes aware of you they are more fixated on the problem than they are on you. That’s because they don’t know you. They’re cold traffic after all. Your job is to lead them away from the painful problem they’re experiencing.

What’s the painful problem they’re experiencing? Can you lead them away from that problem and actually solve it? When you can at least solve part of a very painful problem with your free lead magnet, it creates authority. And the messaging you insert both in the lead magnet and in the follow-up emails after the lead magnet is received is vital.

If you’re not a writer or have no experience writing effective stories, then hire a good copywriter. This one component can make the difference between a failing funnel and a multi-million-dollar funnel. But it’s not just your messaging that’s important. Your offer is extremely important as well.

Your Offers

Offers are the key to your success with sales funnels. Because, without great offers your sales funnels will fail. Make your offers so good that people feel crazy saying no to them. I’m not just talking about your paid offers here. I’m also talking about your free offers.

Start with your lead magnet and make it so good that people would happily pay for it. But you’re giving it away for free. And as you ascend up and charge people more money, make the offers incredibly valuable. Keep in mind that this is about perceived value. Not always actual value.

For example, let’s say you had an event last year that people paid $5,000 to attend. And you take the recordings from that event and give it to people as just one of the bonuses included in an offer that you charge $197 for. There is a very high perceived value in that offer. Make sense?

Always think about making your offers incredibly valuable. We call these irresistible offers. These are offers people just can’t say no to. When combined with psychological levers like urgency and scarcity, you can get people to move through your sales funnels rather quickly.

7 Steps To A Successful Sales Funnel

Now that you have a lay of the land, how do you build a successful sales funnel? You need to approach this from a value perspective. Ask yourself this question. Am I delivering a ridiculous level of value or am I just trying to make a quick buck? Prospects know the difference. So don’t skimp on the value.

By delivering real value at every stage, prospects will get to know, like and trust you. When they know like and trust you, they’re far more likely to buy whatever it is that you’re selling at whatever price point you’re selling it at. And that’s the key to success with any sales funnel.

#1 — Your Lead Magnet

Lead magnets can come in different forms. You can create videos, audio files, written documents, and so on. Here are some examples of the types of lead magnets you can create:

• Cheat sheet
• Checklist
• Video tutorial
• Email course
• Software trial
• Web class
• Report
• And so on…

It doesn’t matter what type of lead magnet you create. What matters is the following:

• The lead magnet should match the traffic source—meaning that if you intend to market your lead magnet on YouTube, your lead magnet should be a video or a series of videos. If you intend to market your lead magnet on a blog, your lead magnet should be an ebook, a checklist, a guide, and so on.
• The lead magnet should be so valuable that people would happily pay for it—if you don’t do this then your sales funnel will fail. It all starts with the lead magnet. This is your high-value bait. You might catch a fish with poor bait but it won’t be the right type of fish. Go all out on your lead magnet. High value indicates that it solves part of the problem for the prospect, which gets them to know, like and trust you.
• The lead magnet should lead them away from pain—the lead magnet you create should lead the prospect away from pain rather than toward pleasure. They’re far more likely to trust you to lead them away from pain. Meaning, don’t say “6 Steps to 6-Pack Abs” because it sounds scammy. Instead say, “6 Major Eating Mistakes People Make When Trying To Lose Weight.” Can you see how the second one leads away from pain?

#2 — Your Lead Magnet Opt-In Page

Next, you need an opt-in page for the lead magnet. This is a simple page that creates curiosity. It has a headline, an opt-in form and a call-to-action button. That’s it. Keep it very simple. There’s no need to overcomplicate this. You’ve likely seen hundreds of these before.

Lots of people try to overcomplicate their opt-in page for their lead magnet. You shouldn’t do that. One simple curiosity-inducing headline, an image that stirs a bit more curiosity, and a call-to-action button to get them to opt in and grab your lead magnet. That’s it.

#3 — Your Messaging

Once someone joins your list, use that opportunity to build rapport. Share stories and experiences that help build a bond with the prospect. Explain the events that created pain and problems that led you to develop the solution you’re now offering to them.

These emails should go out once every day for the first week. Take that time to introduce yourself, talk about how you got started in this business and the events that led you here. Share the expertise you developed along the way in solving the problems you’re now offering to solve for them.

How you communicate this is really crucial. Although they’re not your friend just yet, you should communicate with them in a friendly way. Say things like “Hi friend…” and add a “P.S.” or two at the end. If you struggle with copy, find a great copywriter who can help you.

#4— Your Frontend Offer

What’s your frontend offer? It’s not designed to make you a profit. Nope. This is a low-ticket, low-risk offer that converts leads into customers. But low ticket does not mean low value. Nope. This should still be a high-value offer. But it should be offered at a low price.

Often, this is not connected to the main lead magnet. Yes, you can do it that way. Sure. But if you ask for a sale right after you give something away for free you might not gain their trust. In fact, you might lose it. It’s better to deliver value in the messaging (step #5 below) and then ask for a low-ticket sale.

That means you’re creating more than one sales funnel. You have your primary lead-generating funnel. That’s where your lead magnet is. But the frontend offer will be something you push them to from within your messaging after they grab the free thing.

#5 — Your Frontend Offer’s Sales Page

Next, build a sales page for that frontend offer. This has to be on its own page. Take the time to build this out using the Pain-Agitation-Solution (PAS) framework. Talk about the pain they’re experiencing, agitate that pain, and then hand them the solution on a silver platter.

• Don’t use the page to talk about features.
• Talk about the benefits that the product provides.
• Incorporate stories into your sales page
• Use social proof by providing testimonials
• Reduce their risk by providing ironclad satisfaction guarantees
• Use urgency and scarcity to help drive the sale home

#6—Add An Upsell

Create an upsell for your frontend product. This should be an additional piece that solves another problem. If you’re selling a product to drive more traffic on YouTube, maybe you add an upsell for leveraging social media to get more clients.

Upsells will help you squeeze a little bit more juice out of the lemon. This helps to generate more revenue in your sales funnels.

#7—Add A Downsell

If they don’t take your upsell, you can add a downsell. But don’t discount the thing you were selling. Simply sell a small part of it. Donwsells are typically less money and are easier for prospects to rationalize when purchasing products or services from you.