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One of the single most important concepts in business is the sales funnel. Sales funnels can increase your income online by automating your business. They offer a path of least resistance to growing and scaling your business on autopilot. But after spending time with some of the world’s best marketers, I can tell you with near certainty, not only how sales funnels will allow you to make more money online, but which specific funnels you should implement.
Now, if you’re anything like me, you might be averse to certain funnels. For example, I’m not at all an e-commerce guy, but I do know that free-plus-shipping funnels are absolutely crushing it. In fact, just this past week, while attending the Closing Table Mastermind with Perry Belcher and Roland Frasier, I gained more insight into the alluring “tripwire” funnel, purportedly coined by Perry Belcher.
However, Belcher didn’t invent the concept. He drew that from an old Columbia House ad that sold 13 CDs or tapes for the big price of $1.00. Remember it? But we all know that this irresistible offer (aka tripwire) had way more to it than just the $1.00 price tag. In the background, there was a continuity program at work. In Columbia House’s’ model, this was called negative option billing. That means, you automatically get regular monthly shipments (along with a bill) unless you expressly state otherwise.
So why is this so powerful and what does it have to do with sales funnels? In fact, what you’ll notice is that Columbia House’s sales funnel was quite simple. You just picked the CDs or tapes you wanted for a dollar, then received a regular monthly shipment every single month at a pre-defined rate. They would continuously bill you for those CDs or tapes every single month. There were variations of this offer as well where you could grab 11 CDs or tapes for one penny then get the 12th free.
Either way you look at it, these were all irresistible offers. This was too good to pass up. But what Columbia House and other companies realized was that, although they would lose money out of the gate, they would, on average, over time, make money hand over first. And that is the power of the sales funnel. Before automation, this is how sales funnels worked. And, if you called in, you would get a live person effectively walking you through the funnel.
The Columbia House example offers deep insight into the psychology of an offer that’s irresistible. By first determining the lifetime value of a customer and their retention rate, Columbia House determined that it could spend a certain amount of money acquiring customers and still be highly profitable. That’s essentially what’s done with sales funnels today. And what really makes those sales funnels so powerful are tripwires.
Today, it’s the tripwire that creates the irresistible offer. Although Columbia House didn’t quite have major up-sells or down-sells in their funnels, they created a simple two step funnel that worked. It worked because the tripwire was so alluring. It appealed deeply to the consumer. After all, how can you resist an offer like that for 12 or 13 CDs or tapes for $1 or 1 cent when they were retailing at around $10 each at the time.
Another powerful example of this was through Sports Illustrated. In fact, Sports Illustrated was effectively on the decline at the time it introduced its revolutionary tripwire. There’s something about tangible items that people just connect with. Even when you’re offering a digital information product on the back end, by sweetening the deal with a tangible good, you can quite literally send your conversions through the roof.
In the example of Sports Illustrated, take yourself back to 1990 when magazine subscription rates were starting to drop off. In that period, Sports Illustrated suffered a 7% decline in their circulation in the first half of the year. Now, no matter what they did, they were unable to get the subscription rates up. Even by offering deep discounts on subscriptions, consumers weren’t grabbing it. Plus, if they discounted too steeply, it would impact their ability to get advertisers paying premium rates without showing that consumers were paying close to the full cover price of the magazine.
Sports Illustrated, owned by Time, Inc., wasn’t the only magazine that was suffering under the company’s umbrella. People magazine had also experienced a severe decline of 5%. Time, Inc., knew that it needed to do something fast. So it started to offer a tripwire that included sports bloopers on VHS. However, the cost was exorbitant and there were only so many bloopers it could offer. So, they turned to the football phone as the new tripwire.
Why the football phone? First, it appealed to the target market. And, it was unique and exciting. Far more exciting than a boring magazine subscription. The football-shaped phone concept was conceived by Sports Illustrated’s director of circulation at the time, Michael Loeb. Back then, advertising on cable was also very inexpensive. Plus, the phone, which was sourced from China, only cost a few dollars “landed”. So it all made sense.
Loeb worked on the logistics of this offer for many months. However, that wasn’t the only offer. They also concocted an offer that consisted of a sneaker phone. If you’ll think back to 1990-1991, it was both offers that were running almost concurrently. Talk about an early-on split-test, right?
So, what were the results of all this? Over 1 million new subscribers. That’s right. And those offers only ran for a limited time. But it effectively saved the company. That’s the power of a tripwire offer. It’s a tangible product that gets people excited about whatever else the core offer is. In fact, some people will only buy what you’re selling solely for the novelty of the tangible tripwire offer.
Why Are Sales Funnels So Powerful?
Sales funnels are one of the single most powerful concepts in business today for a very particular reason. It’s not just the example of the tripwire that’s powerful. It’s the entire kitten caboodle, so to speak. There are so many parts and components to what make a sales funnel work so well that I wanted to break it down and give some more examples to provide a deeper understanding to how you can use them to increase your income online.
Now, if you’re not using a sales funnel right now, or if you’re just discovering what a sales funnel is, then there are a few ways you can quickly leverage this powerful concept in your business to create explosive results. First and foremost, if you don’t have a ClickFunnels account, go here and sign up for the 14-day free trial. Once you’ve setup your account, grab a custom domain name and start building your funnel. If you need help, watch some of the on-boarding videos included with ClickFunnels.
It doesn’t matter if you have an existing business or you’re working to setup a new business, funnels are the key to growing and scaling no matter where you’re starting from. However, there are 5 particular ways you can use sales funnels to increase your income right now. It doesn’t matter what business you’re in or what you’re selling, you can leverage these today, right now, to create explosive results.
At the Inner Circle mastermind this week, Russell Brunson dissected the hook-story-offer technique that precedes building the funnel. Can you build a sales funnel before you have a hook and a story? Yes. But you might have trouble gaining traction, especially if you’re competing in a red ocean. Red oceans are entrepreneur-infested waters competing for the same pool of customers, whereas blue oceans are a place where few entrepreneurs are swimming in.
However, the important thing to understand about the hook-story-offer is that you could have a terrible offer with a great hook and a story, and you’d crush it. Inversely, however, if you have a terrible hook and story but a great offer, you’ll falter and likely fail. Jason Fladlien says something similar about webinars and funnels. He says that “An exceptional webinar in an average funnel will always outperform an exceptional funnel with just an average webinar.”
What does that tell you? Spend the time on the hook and the story. Yes, the offer is also important. But it’s the hook and the story that’s going to reel prospects in. For example, Brunson used the narrative of fit-to-fat-to-fat founder, Drew Manning. Manning, who was in great shape, went out there and gained a bunch of weight over a 6 month period to better understand what it feels like to be fat. But then he went out there and lost all the weight.
That right there is an incredible hook and story. It’s unique. And, because of that, Manning has experienced a meteoric rise, even though his offer isn’t that good. But when the hook and the story is just so good, the offer is almost unimportant. Effectively, you can sell just about anything when the hook and the story just crush it. Another example is the story of Robert Allen who would always say he could be dropped in any city in the country and buy a home no money down within 60 days. And that’s exactly what he did. His brand has done over a billion dollars in sales because of it.
Those are all great hooks and stories. Without that, your offer will struggle. If you can come up with a unique way to create your hook and story, the rest will fall into place. Since there is so much red ocean out there, this is probably one of the most important points to make before you launch any sales funnel.
Tripwires are great low-barrier-of-entry products that make prospects whip out their credit cards. Often, these are too-good-to-pass-up products that are offered at an unbelievable price. Just think about the tripwire offered by Columbia House or Sports Illustrated, for example. Tripwires help make it easier to acquire new customers, and then to ascend them up your value ladder.
Anything that makes customer acquisition more difficult, such as a high-priced product or service out of the gate, is going to make growing and scaling your business more difficult. The truth is that it costs 5 times as much to attract a new customer as it does to retain an existing one. That’s why tripwires are so powerful. They lower the barrier-of-entry into your business. And anything that can lower the barrier of entry is always ideal.
Another great way to launch a sales funnel and easily increase your income no matter what business you’re in is through a lead magnet. The lead magnet needs to add real value. But it can be in various formats such as a PDF ebook, checklist, cheat sheet and so on. After the download, you can offer a one-time offer. This means a three-step funnel. You could also create an up-sell if they take the one-time offer or even a payment-plan down-sell if they reject it.
Why do a lead magnet with loads of value? First, you’re setting yourself up as an expert. If that content is truly actionable, and it adds an enormous amount of value to the prospect’s life, then they’re going to perceive you as the authority. But it does something far more than that. It’s a matter of micro-commitments. The theory? Get someone to agree to do three small things for you and the fourth one is instantly a yes.
One of the most powerful sales funnels you can build is based around the webinar. In fact, it was the webinar that saved Brunson’s business from bankruptcy a couple of times. It was a combination and culmination of knowledge that lead to the perfect webinar script, which creates the basis for the ultimate sales funnel. Some of it came from Jason Fladlien, while other pieces came from elsewhere in Brunson’s journey.
However, all that information combined into the format of a perfect webinar and funnel, has literally transformed the businesses of countless entrepreneurs who’ve taken their knowledge and monetized it through the exponential force of webinars. Building a webinar is one of the surest paths to success with a sales funnel. In fact, the webinar funnel is quite possibly the most transformative funnel you could launch for any business, new or old.
Another way to increase your income with a sales funnel is to build a high-ticket coaching funnel that goes from application to phone call to close. The application allows you to weed out those who aren’t serious. And, on the phone call, you can close the deal. Now, this type of sales funnel works if you’ve already had results with clients. If not, work for free until you get results for people. Then, collect testimonials and use those as part of the pitch for the coaching.
Probably one of the biggest and most popular sales funnels these days is the free-plus-shipping offer funnel. It makes a great entry point into any funnel by creating a one-time offer or up-sell after the offer, similar to a tripwire funnel. However, the difference here is the power of the word free. Yes, tripwires, which are very low-cost products or services, work well. But there is real power in the word free.
In fact, people will jump up and down for a free offer, even if they have to cover the shipping and handling, as opposed to taking an offer that they even have to pay a small amount of money for.
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