In the final chapter of this series on the Sales Funnel we look at how you can begin the process of setting up your own sales funnel based business, in particular an Internet business. I will illustrate using an example of the sales funnel I am currently developing for my own blogging information business.

If you haven’t read the first three parts of this series please do so now.

• The Sales Funnel Explained
• The Sales Funnel Part 2: Generating Leads At The Front End
• The Sales Funnel Part 3: Back End Profits

Find A Profitable Niche

Once you realize the potential of a sales funnel, which I hope you do by now after reading this series of articles, you should consider the possibilities of creating one in your niche.

A sales funnel can only succeed in a market where there is a demand for what you offer and you are capable of delivering services or products to meet that demand. Assuming you are operating in a marketplace and meet those two criteria, then you have a business and can begin the process of planning your sales funnel.

If you are yet to find your market niche then your focus must remain on finding the right business opportunity for you. You can’t build a successful sales funnel if you don’t have a market for the products and services you sell, so make sure you tick that box first.

If you are not sure whether you have a good market for a sales funnel you can test by setting up initial lead capture mechanisms and attempt to make front end product sales. This can be as simple as an email newsletter combined with selling an ebook, or even before creating a product, by performing keyword research and setting up a survey site, just like you do with the ebook business model.

Until you have actually made money you can never be certain the potential for a sales funnel based business is there. I’d place more trust in your conversion rate for actual sales rather than opt-in rates to a free newsletter as indication of a business opportunity. Having a newsletter as a relationship builder is a great first step – just don’t assume people are willing to buy until you sell something.

Planning Your Sales Funnel

Once you are confident you have a profitable niche you can begin work planning your sales funnel.

Your main focus is always meeting the needs of your customer. Along the funnel you do this with ever more specifically tailored products. Your ability to charge high ticket prices and make the most profit rests on developing quality back end products.

I like to imagine I’m my ideal customer and consider what is the core problem or desire they have that compels them to buy what I offer. If I can help them meet that need then my business will be more successful and I will enjoy immense satisfaction helping others.

It’s not always easy to jump into the shoes of your ideal customer, hence the need to gather feedback and survey your prospects and customers. The more focused you can define the problems they face, the better you can tailor the solutions you create.

Initially a need might seem quite broad – say for example “I want to improve my golf game” – but when you dig deeper you might find that it’s actually a very specific aspect of the general problem that most people face that you need to focus on, for example “I need to improve my putting technique“. Having a “drilled down” understanding of the common problems your customers face when attempting to meet a general need, helps you to determine what products to create.

Different Communication Media

Once you have a list of the most common problems in your market you can begin to plan how best to solve them. Consider delivering solutions using different media, such as downloadable audio or video, text, over the phone or in person, conferences, workshops or private tuition.

It’s important to remember that different people prefer different methods of learning, and consequently if you can provide solutions using a range of communication methods you stand to help the most people and obtain a larger share of the market.

While it’s great to offer many solutions to the most pressing problems your customers face, you also need to consider your ability to deliver. Everyone may prefer private time with you in person, but obviously there is only so much of you to go around. If you are like most entrepreneurs, you are not in the business game to trade time for money, so you probably want to focus on creating methods that do not require your personal attention to deliver.

Digital Downloads

A common practice at the front end of a sales funnel for an online business is to focus on digital goods. Ebooks, reports, recorded audio, transcripts, Camtasia video presentations and other products that can be delivered via the web can satisfy many hundreds or even thousands or millions of customers without you having to work any harder with each new purchase. You create the product once and assuming it remains current, it is set-and-forget.

As you move down the funnel you can still use digital products to satisfy your hyper-responsive customers, perhaps with more highly tailored content (an even more refined problem), or by delivering your most advanced techniques or offering a larger package of content bundled together.

Generally as customers move towards the back end, especially if you operate an information publishing business based on your expertise, they expect to receive more personalized attention. The back end is often where private coaching or small workshops work well. You can gather a very small group of your overall customer base, who are prepared to pay a premium price and travel to come work with you in a more intimate format.

Perception and the Offer

It’s important to realize that although you might have assumptions of what people expect for their money and how much they are willing to pay, both in the front and back ends, the primary drivers are actually perceived value and the offer you present. What the actual product is and how you deliver it do not factor in as much as you might think.

Do you remember this from the notes I took from a Rich Schefren presentation?

Compelling Offer

It’s not the product that makes a business, it’s the offer presented to solve a very painful problem. Once you find the golden combination of a hungry market, a believable promise (offer) and proof that you can and have delivered on that offer, you have the foundation for a very successful business.

While there has to be some correlation between how much you charge and the type of product people receive for their money, it’s actually more important how you market your offer than anything else.

There’s a common perception of marketers that they cheat and lie in order to make sales – and some do – but I think it’s important to distinguish between a well crafted offer and misleading the market, before applying the label of “evil marketer”. The line between an emotionally compelling offer and misleading people with hype can be a fine one at times, and I’m not writing this article to debate the ethics of marketing, but it’s a point worth making.

A good offer is a preposition that a certain product or service will meet a specific need. What makes the offer compelling is how the marketing materials tap all the right triggers (social proof, empathy) in the people who possess the need and how well refined the problem is. With that level of clarity it is possible to create a perception that you offer the best solution and can charge a premium price. Whether you actually present the best solution is a moot point – there really is no such thing as a “best solution” – it’s all about how people feel and what they perceive as the best solution.

Beginner Sales Funnel Building

I expect many of you reading this are like me, independent, small business owners, who produce products and services mostly by yourself. You might outsource certain tasks, but product and content creation is your responsibility. You have a topic area that you love and blog about, or run a business in an industry you know reasonably well. Your interest in creating a sales funnel is high because you can see the potential, but you have to realize certain resource limitations hold you back from creating a super-sized, uber-sales funnel quickly.

For many people who operate Internet businesses they never go past the front end. They might have an email newsletter, or a free e-course, or a website or blog as a lead generator and then sell entry level products like books, or software, or templates or videos, but that’s as far as they go down the rabbit hole. The same goes for affiliate marketers, or AdSense earners – you may make good money from it but it’s all about one-off front end sales or clicks.

The Big Picture Mindset

To start building your sales funnel you need to think beyond that first sale and see the big picture. Are the people who buy your ebook coming back with questions? Can you take those questions (problems) and make more products? Do they love what you do that they will lap up everything you produce? Are you building an email list and segmenting it into different customer groups so you can create different products? Do you have plans for up-sells and cross-sells? Can you see yourself creating a large, home-study package selling for $997 with a big product launch that makes six figures like the guru Internet marketers do?

All these elements can be part of your sales funnel but the most important concept to grasp is that your first product or your current email newsletter or blog are just front end components, and if you one day want a thriving business turning over six or seven figures, in most cases developing a back end is the way to go.

Not Set In Stone

One thing to accept is that the process of building a sales funnel is not set in stone. You do want to create a reasonably consistent back end, but the process of developing one takes testing and effort. You have to consider what products to offer, produce the products, what offers to present to the market and test all the metrics that make up the system. This is a significant job, something you can’t do over night and you will probably need to bring in specialized talent to handle some of the areas, especially if metrics and testing are not your strong point.

Start At The Beginning and Follow My Example

The first step is to start building a front end, and in my case I didn’t even realize I was doing so when I began blogging.

I started blogging back in November 2004. The launch of this blog was my very first step in creating a sales funnel for my blog training business. At the time I was just experimenting with blogging and didn’t realize I’d be doing it still nearly two and a half years later and make a full time income from it. Nor did I consider I would one day release products in the blogging niche, so that’s what I mean when I say things constantly change and are not set in stone. This blog was my first front end marketing and lead capture tool and still is my best front end resource.

Later I purchased SmallBusinessBranding.com and along with it came an established audience. That increased my exposure and ability to capture attention (leads) for whatever business I would end up creating. This was my second front end tool – another blog.

Once my vision for an information business became more concrete – in this case a blog traffic training course – I created an email newsletter for it, my Blog Traffic Tips Newsletter. This was my third front end marketing mechanism and the first to have some form of opt-in process. I used my existing tools, my two blogs, to feed sign-ups for the newsletter, creating the very first part of my sales funnel.

For an entire year I left my sales funnel pretty much like that and clearly not making any sales since I wasn’t selling anything. I used some pay per click marketing to drive more opt-ins to my newsletter, created a pre-launch blog for the course that drove more sign-ups (two more marketing tools for the front end), but that was pretty much it.

With my recent decision to actually release a product, a blog mentoring program, I began work on the launch of BlogMastermind.com, the first entry level product of my sales funnel. This will complete a basic front end process combining marketing tools, a lead capture opt-in process and an entry-level product.

Obviously I want to ensure the entry level product, BlogMastermind.com, is awesome before releasing anything else, but I certainly have plans for a more extensive catalogue of front end products and my first back end offerings. Some of these I already have almost finished, some will come together over time and others I expect haven’t even thought of yet. For the time being I aim to satisfy my first customers as best I can and come to understand what their unique blogging problems are.

Establishing Purpose and Credibility

I’ve spent the last year writing free blog traffic newsletters and more than two years publishing some of my best stuff about Internet business and blogging. This process has been rewarding both financially and intrinsically, however its also been a fantastic ongoing credibility and expertise building exercise, and most importantly from a business point of view – a lead generation tool as well. Since I’ve spent so long and worked hard pumping out free content in many different forms, I already have an audience from which to start a sales funnel business with.

From your point of view, building an audience (attention) and establishing credibility within your niche will always be one of the greatest challenges and it’s crucial if you want to start building a sales funnel. That’s why I recommend if you intend to have an information business based around your passion, experience or knowledge that you immediately start work on your email list or blog or both – at least some form of front end exposure tool.

In my case the process of blogging and building my email newsletter the past two years has helped me to do two very important things:

1. Learn and experience a lot about the topic I want to be an expert in (and establish enough proof elements to demonstrate that I actually do what I teach)
2. Form a vision for what my sales funnel might look like

Here’s What You Have To Do

 

Building a sales funnel can be a complex and time consuming process and is probably beyond most solo-entrepreneurs. The important concept to grasp, even if you do not intend to build a sales funnel, is to understand why they work. It’s about capturing attention, filtering and then isolating the customers who you should spend most of your time with.

Even at the entry level this principle applies. Right now in your blog or your email newsletter or your Internet business, you should be looking at ways to filter and find your ideal customers (or audience), determine their needs and work with them for mutual benefit. You will be a much happier and if applicable, more profitable, if you can stick to working with your main beneficiaries and give them more of what they love.

Yaro
Building A Funnel