The Sales Funnel: How to Create Your Most Important System

by Annie

in systematic

For those of you who think commenting on other people’s blogs is a waste of time and no one really reads them, think again: this whole post was triggered by a comment to a guest post I wrote earlier this week about three common marketing systems every solo needs for Danny Iny’s Firepole Marketing blog.

The comment from Owen McGab Enaohwo of Hire Your Virtual Assistant read:

Annie, I enjoyed your content but thought it’s missing a very important system which is a sales funnel system that actually gets folks to buy the product or service. All the systems you mentioned in my view are need only after a sales funnel has been set up because they will not have as much impact without a sales mechanism in place. Please share your thoughts on this?

Owen’s exactly right in this respect: the sales funnel is the most important system for any solopreneur. Without it, marketing is pointless – unless you’re engaged in this gig strictly for attention. But most solos I know actually would like to get paid, and thus, a sales funnel is a must.

While sales funnel systems are not strictly marketing systems, and thus were outside the scope of the post I wrote for Danny, they do implicate marketing, as well as sales, finance, and workflow systems.

So, rather than just pop off a few comments to Owen in reply to his comment there on Danny’s blog, I figured it was time to take a look at this system in some depth here on the PJP blog.

What’s a Sales Funnel?

At its most basic level, the sales funnel is how you get paid.

Why “funnel”? Because that’s the single best paradigm to describe what happens when prospects become paying clients or customers — or, rather, it‘s been considered to be the best paradigm (more on that in a moment):

  1. Let’s say through whatever means (links from other blogs, search engine traffic, etc.), 1,000 people come to your website.
  2. Out of those 1,000 visitors, 100 read your article.
  3. Out of those 100 readers, 10 sign up for your email list.
  4. Out of those 10 subscribers, 1 becomes a client or purchases your product.

Funnels are wider at the top, much narrower at the bottom – and that’s pretty much what happens to your prospects.

If you want a few more paying clients at the bottom, you basically feed a bunch more casually interested prospects in at the top. (Er. So to speak.)

The Funnel Vs. The System

This is an important distinction: your sales funnel is comprised of systems. It is also, in one sense of the word, a system itself – a series of moving parts that feed into a specific purpose.

But don’t mistake the funnel for the system itself. The funnel is just the visual representation of a workflow. In order to activate the funnel and get the most out of it, you need to build the systems to support the funnel.

Here’s an example – going back to our overly simplified “1000/100/10/1” scenario above, you have at least five systems at play:

  1. Your traffic system(s): how you get casually interested prospects to actually visit your site
  2. Your content system(s): how you plan, draft, schedule, and publish the helpful articles and, also, how you use those articles to convert readers into subscribers to your list
  3. Your email list system(s): how you plan, create, and publish content to your list subscribers
  4. Your client sign-up system(s): how you internally manage the conversion to paying client (i.e., administrative files, contact information, CRM management, etc.)
  5. Your work delivery system(s): how you perform and deliver whatever the client/customer bought to the client/customer

Creating Your Sales Funnel

Ideally, we should have several funnels leading to paying clients.

As an example, a coach can work one-on-one with clients, write and sell a book, lead live workshops and seminars, manage a paid membership site … the options for creating several streams of income are potential funnels in their own right.

Additionally, there are many ways you can move prospects down the funnel and get them to know, like, and trust you—the essential emotional state that comes before the vast majority of purchasing decisions.

Making a visual representation of your sales funnels is crucial if you want to get a clear picture of all the ways people become your clients. It’s also essential to know what state of readiness each element or component of the funnel is in at any given point in time, as this helps you focus and prioritize your tasks.

That’s why I really love Nicole Fende’s sales funnel template, which you can download here (right-click or Cmd-click on Mac to save to your computer).

NB: This is a Word .DOCX  format file. If you’d like another format, let me know – or you can use one of the many freebie file conversion tools on the web. 

Nicole prepared her version of this document to share with the Blog Posse, the small mastermind group to which she and I both belong. It was so impressive that we all immediately began clamoring for a workable version for ourselves. (Seriously, if Nicole ever decides she’s had enough of being the brilliant Numbers Whisperer™ she’s totally got a career in graphics.)

As you’ll see in the template, the various elements are color-coded as to the status (“Major Gap,” “Needs Work,” “Setup Complete”). You can change the color of each element for your own funnel by going to Format/Shape.

The elements are also arranged in an hour-glass shape, instead of the more traditional funnel-shape. This is because Nicole used the principles behind John Jantsch’s Duct Tape Marketing in creating this template.

As John writes here, the familiar paradigm of “know-like-trust” is extended to “know-like-trust-try-buy-repeat-refer” which you’ll see down the right margin of the template.

I like this more than the funnel shape because I think it more accurately reflects the reality of a comprehensive digital marketing plan. So you can rearrange the box elements in the hourglass as you see fit, to most accurately reflect the reality of your business marketing plan.

I’ve left a few elements in the various text boxes just as examples. What you’d do is save the template as a separate file, then select the text in each box and change it to your elements – the things you’re working on, such as your next product, your ebook, your whitepaper, your guest posts, etc.

One final note: this is a big-picture tool. It’s designed to give you the bird’s eye overview of the whole shebang at one glimpse. To actually implement your plan, you need to take the next step of expanding each of these elements into their own systems.

Funnel On, My Friends

I’d like to thank Nicole for the amazing template and for giving me permission to share it here, and also Owen for the insight and motivation for this post!

Any questions? Not sure how this would work for your own business? Hit me up in the comments!

Photo credit: El Bibliomata via photopin cc

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{ 8 comments… read them below or add one }

Owen McGab Enaohwo October 25, 2012 at 3:29 pm

I enjoyed your response to my comment on Fire Pole Marketing’s blog in form of a blog post on your site. Thanks for making me feel special.

The reason I asked the question is because I came to the realization that until I have
a sales funnel whose entire goal and purpose is to convert leads into clients, I should hold
off on all the other stuff. So I have buckled down and have been working on my Webinar which will serve as an education based marketing filled with actionable content that folks can implement on their one but by the way for folks who need more support, there will be the “done for you” offer (<<<— hence the sale).

In terms of the customer lifecycle mean currently is;

1) Know
2) Like
3) Trust
4) Try (<<<— try FREE 7-Day Trial)
5) Buy (<<<— convert into paying client at the end of the FREE 7-Day Trial)
6) upgrade (<<<— get to take over more recurring tasks from client and get them to upgrade plan)
7) Repeat (<<<— automatic subscription renewal via Recurly by billing tool)
8) testimonial (<<<— get video testimonials from clients who want to give one)
9) refer (<<<— once the webinar is ready will be having clients refer their friend to attend the webinar, I might even make use of contests for this too)
Owen McGab Enaohwo recently posted..5 Ways To Use Your Blog To Quickly Build A Waiting List of New Coaching Clients – with Steve Martile

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Annie October 25, 2012 at 6:33 pm

Owen, I think you’re well on your way, there. I’d only mention while video testimonials obviously are far preferable to the written kind, you’ll undoubtedly run into some clients who aren’t crazy about being on video but would sing your praises in writing – have a place for them to speak for you, too.

Also: You’re the second person to mention Recurly.com to me this week, by the way – am gonna have to look into that some more.

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Clare Price October 25, 2012 at 4:07 pm

Great insight on how the sales funnel is composed of systems! Never heard it put that way before. Great Graphic Nicole – color coding makes it so easy to see what needs to be done!
Clare Price recently posted..Would You Skydive Without a Parachute?

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Annie October 25, 2012 at 6:33 pm

Isn’t that graphic and color-coding awesome?! I literally squee’d when I saw it the first time.

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Carol Lynn October 25, 2012 at 4:30 pm

The word system always scares me but boiled down to the important essence like this its always so much more doable! Awesome template, too. Everyone should be documenting everything! Plan first, do second.
Carol Lynn recently posted..The Beauty Of Education And Safety: 5 Questions With Dr. Rudolf Thompson, Founder Of The Thompson Center For Plastic Surgery

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Annie October 25, 2012 at 6:34 pm

Systems have been made into this ethereal, intangible, undefinable “thing” – I’m on a mini-mission to demystify the word. There’s nothing scary about ’em – the only thing that’s scary about systems is what happens when you DON’T have ’em! Rock on, CL!

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Shayna October 26, 2012 at 12:39 pm

Love the clear portrayal about how each “system” relates to a step in the sales funnel!

Quick question – is the 1000 – 100 – 10 – 1 about average for numbers at each step? Or did you just pick them for ease of illustrating the point?

When I first got started, I was discouraged by how wide the top really needs to be in order to get a decent customer flow… “How is it possible that 25,000 people are coming to my site, and a measly 35 are buying my product???” – but I’m starting to understand that that’s pretty much the way it is in all industries.
Shayna recently posted..Lesson 25: Art, Fashion, and Design

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Annie October 26, 2012 at 1:19 pm

Hey Shayna! Yes, the 10% is a commonly tossed about figure, which I used strictly for ease of following – but honestly, in the digital space, 10% is amazing. Right now you’re averaging .14% (if those figures are accurate), which is low. 25,000 in at the top is highly respectable, though – so I’d conclude from this your problem isn’t your funnel, per se, but rather conversion. There are all kinds of possibilities as to what specifically is going on there — you could be asking for the sale too soon, your actual point of sale may not perfectly fit the prospect’s perceived needs (remember, it isn’t what they actually need but what they think they need), you may need to work more on the “know/like/trust” end of the cycle with, for example, case studies or testimonials or other forms of social proof, or it could be you need to look more at the “try/buy” middle of the cycle. Hope that helps!

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