Why The Concept of a Sales Funnel is so Important for Internet Marketers


Once you have targeted visitors entering your sales funnel, a percentage will make some kind of commitment to your business and a percentage will simply leave.

Consequently, your job in this situation is twofold.

Firstly, you should be applying every tool and resource available in an attempt to minimize the people who jump straight back out of your sales funnel after first entering.

Secondly, you should also be doing everything within your power to ‘push’ people to the next lower level of your sales funnel as quickly and efficiently as you can. With every level that they descend further through the funnel, the more they are increasing their level of commitment and therefore their value to your business.

For example, if someone chooses to subscribe to your mailing list, you are in a position to send them a continual stream of promotional e-mails pushing your primary products.

At some point, it is likely that a percentage of prospects that you are e-mailing in this way will buy the products that you are promoting because it is widely accepted in online marketing that most prospects have to see an offer anywhere between seven and twenty times before they finally decide to buy (or not).

Of course, successfully selling a product in this way is exciting and rewarding because it puts money in your bank account, but it is not the end of the story. Indeed, it is really only the beginning.

It should be obvious that the likelihood of a prospect turning themselves into a customer by buying the product that you recommend will to an extent depend upon the price of that product.

If for example the product only costs $7, it is pretty much a no-brainer for anyone who has even the remotest interest in it to buy. Thus, if you were selling a $7 product you could probably anticipate big sales numbers whilst understanding that the income is going to be relatively low.

Logically speaking, it is going to be more difficult to sell a $27 product, and harder still to move one that is priced at $47. Nevertheless, as long as the product offers clearly outstanding value, even at these levels, you could expect to see reasonable sales figures.

So, let’s say that you sell a $7 or $27 product to your customer as the first piece of business that you have ever done with them. What do you do next? Is that it or are you going to push for something more?

What you now know is that if you present a suitably well targeted offer to each individual customer (as they now are), they will buy at this price level.

What you don’t know is the depth of their interest in the subject on which they have just spent money. Nor do you know how far they are willing or able to go on spending money or where their price ceiling is.

So, if you have just generated a $27 sale, the next step is to offer that new customer a $47 or even a $67 product.

As you’ll discover, you should do this as soon after they have completed their initial purchase as possible because at that very moment, they are in full-on ‘buying mode’ and this is always the best time to ask for more business.

It is a fact of doing business online that the hardest thing in the world is to convince a new customer to get their credit card out of their wallet. Thus, once they have done so, you should maximize your returns by presenting them with an immediate upsell offer of some type.

Some of your new customers will buy, whilst others will decline the offer.

If they buy, that’s great, you have even more cash in the bank, but this is still not the end of the story. Now you need to know whether they have the wherewithal and/or the inclination to spend even more money on targeted products in your market.

The customer who buys your upsell offer could well be in the mood to keep buying, so you should keep offering them the opportunity to do so. And even for those customers who do not buy your upsell or anything else that you offer them, you should definitely start offering more higher-priced products in your promotional e-mail messages to them.

After the initial flurry of sales activity, at every step of the way, you must progressively narrow down and focus your business by establishing how far each individual customer who is on your mailing lists is willing to go. This concept is based upon the somewhat clichéd but nevertheless remarkably accurate notion called the Pareto principle or 80/20 rule.

When applied to sales, this principle dictates that 80% of your business will eventually come from 20% of your customers. To a large extent, my own experience indicates that this principle generally holds reasonably true.

What it means for your business is therefore relatively straightforward.

By continually qualifying your customers, thereby narrowing the number of people still in your funnel, you will gradually whittle it down to the situation where you have isolated the 20% of customers who are willing to spend the most money with you.

These are the people who will not bat an eyelid if you propose a $2000 or $5000 training course to them. They are therefore the customers who you should be focusing almost all of your attention on.

By isolating the individual customers who are going to make the most money for your business in this way, you ultimately ensure that your business is as profitable as it could be.

At the same time, you are not wasting your own time trying to work with customers who are never going to make a great deal of money for your business, so this ‘narrowing down’ process also makes your life easier and far less complicated as well.

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