In part one of this series on the Sales Funnel, I related my story of becoming a customer of the Double Your Dating information product business, and how I experienced the sales funnel used by David DeAngelo, to sell his dating products.
The sales funnel is a systematic marketing process where you progressively filter your prospects into customers and further refine them into hyper-responsive customers. Your customer base becomes smaller and your profits increase as you sell higher priced items to your hyper-responsives in the back end of your sales funnel.
Before any of this can happen, at the top of the funnel you need to attract prospects, and it’s at this point where your marketing creativity can really shine.
The front-end is the most dynamic aspect of the sales funnel and the area that requires continuous experimentation. There are literally endless techniques available at the front-end, limited only by your resources and imagination.
As the Internet changes and evolves, new methods to market and capture leads surface thanks to advances in technology and ideas from Internet entrepreneurs. In the “old days” leads were generated via methods like banners and newsletter advertising, which are still common marketing tools today, but are now joined by more sophisticated options such as pay per click advertising, social media, blogging, podcasting and other Web 2.0 tools and toys.
The focus at the front-end is to attract and qualify people who may have an inclination to purchase your products further down the sales funnel. At this stage you begin the process of refining your target customer and educating them of the possibilities you and your products present.
In most cases the qualification occurs when a person opts-in to receive something from you. It’s this opting-in step that transforms your everyday web surfer into a prospect, since they have just taken an action that indicates they have at least some desire for what you offer.
The first step of building your sales funnel is to create front end mechanisms that capture the attention of people. You then give them the option to opt-in, which can occur in many ways.
Here are some examples of how marketers attract and draw people into their sales funnel. These are all front end marketing tools.
- Signing up for an email newsletter, for example my own Blog Traffic Tips email newsletter or the Double Your Dating newsletter.
- Subscribing to a blog via RSS or email notifications.
- Opting-in with your name and email to download a free report, white paper, ebook, audio download, video file or any media. A great example is Rich Schefren’s Profit Vault.
- Registering for a free online service, for example MySpace, Facebook, LinkedIn, Yahoo! Games, Flickr, Skype – pretty much anything where you have to register with some form of contact details.
- Ticking a box to receive further information about a topic/product when registering for something (co-registration).
Strictly speaking, for someone to have entered your funnel as a prospect, to stick their hand up and say “I’m a lead”, they must have agreed to receive some form of communication from you. This is permission marketing, where your prospects give you permission to contact them with further materials, all of which is part of your marketing and sales funnel.
In today’s online marketing world, I prefer a looser definition of a lead, where a user doesn’t necessarily have to opt-in to your marketing stream, they just need to pay attention to you.
Perhaps they are reading your content via RSS or directly from your blog, or are listening to your podcast or watching your video. The point is that you have their attention. You don’t necessarily have permission to continue to market to them, however because you are providing value you have their attention, so they choose to receive more from you. This is a subtle difference, but a key point for marketing online today. Your relationship with prospects counts more than whether they gave you their email address or not.
Of course there’s no reason why you can’t take the people currently paying attention to whatever you do and funnel them into an opt-in list of some kind, which essentially asks them to create a stronger relationship with you, since they now offer you both their attention and permission to contact them in the future. That is what the front end is all about.
The Price You Pay
Since email marketing is the most prevalent communication tool to do business online, often the process of handing over your email is the initial “price you pay” when you enter a sales funnel. From that point onwards you feed prospects value, disqualify those prospects who are not ideally suited for what you offer, and start to offer front end products.
Disqualifying leads is a very important process that must occur at all points of the sales funnel. If someone doesn’t receive value from what you offer, then they won’t continue to purchase more further down your sales funnel. Assuming of course that there IS a group of people that love what you provide, it’s your job to focus attention on them and filter away everyone else. If no one likes what you do or it’s a very small group, then perhaps you need to refine your target market or the offer you present.
Profits Are Not In The Front End
A common focus for many Internet business entrepreneurs – and I’ve made this mistake myself – is to think about launching your first product as the big ticket to wealth. You focus so much energy on releasing your ebook or program or course, thinking it will make you rich, that you don’t realize that the real profits are made at the back end.
Double Your Dating is a fantastic example of this principle. You may not realize this, but the Double Your Dating affiliate program pays out 200% to affiliates. Yes, that’s right – they pay out $40 to affiliates for every $20 sale of the front end ebook they refer. They can afford to lose $20 because they know how much they will make on the back end.
I’ll go into more detail about how they can do this in the next sales funnel article, so for now just remember that your front end products are lead generation tools – they are not necessarily your profit centers.
That’s not a hard and fast rule, there are companies that make their money strictly from front end sales, but in most cases by adding a back end, the profits of the business will explode.
The front end is all about capturing attention and drawing people into your sales funnel. Since there are many ways to capture traffic online you should never run out of options for generating leads.
The key is to know your numbers. Once you know how much a lead is worth to your business, and you can only really know this once your back end is refined, then you go to work building front end marketing tools. This is a process that literally should never stop. As long as there are methods to market you can be out there testing them, see which bring in the most qualified traffic and tweak the process until your conversation rates are sky high.
Obviously the size of your organization dictates how much you can do, since resources are limited. In most cases you will discover a “best” solution that works well for you, which might be writing and publishing free articles or ebooks, or using affiliates, or running teleseminars, or encouraging word of mouth referrals, or posting to a blog or any combination of these tools, or other methods, both online and offline.
Your front end helps to qualify prospects and convince them that your business is worth forming a relationship with. That relationship becomes stronger as customers consume more of your free marketing resources, purchase front end products and learn to trust and appreciate what you do. From there, they enter your back end and make big ticket purchases with high margins.
In the next article in this series on the Sales Funnel I will review the back end process and why it’s the most crucial element for long term business growth and beating the competition.
Part three is now available: The Sales Funnel Part 3: Back End Profits
Loving The Front End