6 Step Process To Create Your Online Sales Funnel

Ecommerce Stats

Are you struggling to convert your prospects?

Maybe you’ve ran a few Facebook and Google ads that failed, started a blog strategy that didn’t work, or worse yet… you haven’t even started because you’re so confused on where to begin.

If at times you feel like this cat….

cat meme

Then you’re in the right place.

In this article I will teach you how to create an online sales funnel for your business and reveal the template that every successful modern-day business is using.

Online sales funnel: This is the marketing term used to describe the path your customers take from being a website visitor to a lead to a customer.

There are typically six steps in a sales funnel and as a consumer you’ll certainly have been in all five.

The steps are:

  1. Traffic source
  2. Lead magnet
  3. Tripwire
  4. Core product
  5. Upsell
  6. Referral

Whether you’re a Realtor or selling a SaaS or physical products online, you’ll need to use the steps above to scale your business. A sales funnel allows you to navigate bottlenecks better and scale and optimize areas to streamline your business.

Here’s how you should approach each step. I’ve even provided real life examples from successful businesses.

1. Traffic source

To increase brand awareness, generate leads, or drive sales, you need to get your brand in front of your audience.

You do this through using traffic sources (social media, forums, search engines, etc.).

Test multiple channels. Go to where your target audience hangs out and add value. Help people. Click To Tweet
  • Facebook
  • Google (AdWords or SEO)
  • Instagram
  • Snapchat
  • LinkedIn
  • Twitter
  • Pinterest
  • Email marketing

Everyone in the world spends some part of their day on these platforms…okay, almost everyone.

As of 2014, Facebook had over 1.1 billion active users, with the average person spending 40 minutes per day on the platform.

facebook dau

(Source)

It reached 50 minutes in 2016 and I’ll bet it will hit over an hour in 2017 thanks to Facebook Live.

If you're using offline mediums to promote your business such as flyers, newspapers, or notice boards, your business will fall behind. Click To Tweet

When was the last time you saw someone besides a hipster reading a newspaper on the bus or train?

newspaper

(Source)

Most people have their heads down with their eyes fixed on their mobile device, and that’s where your business needs to place itself.

Depending on your audience and industry, only some platforms will be applicable to you.

Here’s where you should be focusing your efforts:

Facebook or Google (mandatory) – Every business should be positioning their brand on either Facebook or Google. It doesn’t matter what you sell, Facebook and Google have a combined user base of over 2.2 billion users. Your ideal customers ARE using Facebook and Google. Period.

Instagram, Snapchat, or YouTube – These platforms are the perfect places for your business if you create a lot of video content or manage an e-commerce store. Snapchat and YouTube is video only, and the bulk of content on Instagram is now video too.

These are great platforms to promote videos and create action shots of your products.

Here is the current Instagram wall for the Dollar Shave Club:

dsc ig

Each image receives thousands of interactions per day, for free, and they post daily pictures because so many users visit Instagram as a shopping mall to see what they will buy next.

Tip: If you run an e-commerce store but don’t have stunning visuals like the above, I strongly suggest hiring a photographer for a day to take a year’s worth of action shots of your products to use on Instagram.

LinkedIn is great for any business in the B2B industry. You get to target c-level executives and businesses directly.

Pinterest is perfect if you create a lot of image content, and is ideal for e-commerce businesses.

Twitter is good for building a community and brand. It is also a useful customer support channel used by big brands.

xbox twitter

Email marketing is a must for all businesses (you’ll find out why very soon).

You don’t need to be on all of these platforms as you may not have the time, staff, or budget to do so.

However, you must be active on at least three; don’t make the mistake of relying on a single source of traffic or business. If you focus only on Google and they change their algorithm, you’ll lose your traffic and destroy your business over night.

You spread your eggs by leveraging three traffic sources, and growing your business becomes easier as you’re now dipping into three massive ponds of customers instead of one.

  • Key takeaway: Pick at least three traffic sources to advertise your business that are most relevant to your product and industry.

2. Lead magnet

With your traffic sources set, the next step will be to send traffic to your website hoping they place an order, right?

Unless you’re Amazon, I would not do that.

Asking a website visitor to buy your product on their first visit is like going out with someone on a first date and asking them if they would like to marry you. Click To Tweet

They will say no (unless you’re Tom Cruise or Megan Fox, then they’ll most definitely say yes).

With so much choice and competition online, less than 3% of visitors convert on their first visit to your website.

stats

(Source)

If you’ve ever ran an online advert and sent cold traffic to a product page, you may have experienced very high ad costs and low conversions.

That’s where the lead magnet comes in.

A lead magnet is something you give website traffic for FREE in exchange for their email address. In most cases, businesses offer the following:

  • Voucher
  • Report or white paper
  • Video course
  • Consultation
  • Physical item
  • Any type of content

The goal of a lead magnet is to obtain a prospect’s email address so you can contact them again later.

Since you know that first-time website visitors convert at less than 3% and Facebook/Google/Instagram just cost you $0.45 to bring this person to your website, you want to maximize that $0.45 by grabbing their details.

Once you have their email address you can contact them and send them back to your website for free.

Shopify is an online store-building site and offers its visitors free online training. To reserve their seat, users must provide their email address.

shopify

Another example is ClickFunnels, who offer their readers a free two-week trial:

click funnel

Both of these are lead magnets that are attached to a blog post. They serve an advert to their audience using any of the traffic sources above and then place opt-in forms within their blog to grab a user’s email address.

Anyone who opts-in has now become a lead. It’s much easier to turn a website visitor into a lead than a customer on their first visit.

  • Key takeaway: Come up with a relevant lead magnet for your customers. A good lead magnet is easy to consume (quick to finish) but of high value at the same time. A 500-page eBook will contain a lot of value, but chances are very few leads will finish it and go to the next step. The Shopify webinar, for example, is only 25 minutes long yet provides amazing value.

3. Tripwire (optional)

There has been a lot of debate recently about whether or not businesses need to add a tripwire into their online sales funnel.

Tripwire: This is a product or service that is priced much lower than it should be to convert website visitors or leads into customers. The goal of a tripwire is not to create a profit but to filter out weak leads.

When you’re spending thousands of dollars per month in ad spend and are gathering hundreds of leads each week, a tripwire is a great way to streamline your funnel to allow your sales team to focus only on the highest quality leads.

Often, businesses make a loss on their tripwire, but that is gained back ten-fold in Step 4 of their sales funnel.

What does a tripwire look like?

Here’s one from Dollar Shave Club. They offer you one razor, four cartridges, and free shipping for just $1:

DSC1

Here’s another from HostGator offering as much as 60% off their plans for new customers:

gator1

After visiting their website, they also show me the same offer on Facebook:

hostgator fb ad

Dollar Shave Club and HostGator are both making a loss on their offers above, but they expect customers to reuse their service over and over again.

They are willing to experience a short-term loss for a long-term gain.

Should your business set up a tripwire in your online sales funnel? Click To Tweet

If you’re spending a lot in ad spend and are generating hundreds of leads, a tripwire is ideal to filter out weak leads. You could serve the tripwire to your leads through website retargeting (see HostGator’s Facebook advert) or through email marketing as is done by DKNG to get people to sign up to their free account.

DKNG

If you have a limited budget and only drive dozens of leads per day, then you could choose to skip this step.

Key takeaway: Check your competitors and see whether they are offering a tripwire. I would recommend every business start out using a tripwire because it’s eight times easier to get a customer to reorder with your business than non-customers, and their repeat order spend is much higher too.

customer sepnding

(Source)

4. Core offer

In a perfect world, this is where you want all the people you drove from Step 1 to end up, taking your core offer and being your customer.

Whether you decided to use a tripwire or not, primarily through email marketing you’d nurture prospects before you ask them to marry you… I mean, buy your product or service.

To continue with the Shopify example earlier, once I opted into their free drop shipping webinar, I was first sent a link to their webinar.

webniar

They also sent me a light email pitch to sign up to their service bundling their service with tons of added value products such eBooks and even a Facebook mastermind group.

sign up

After I viewed their webinar, I was then sent another email with a pitch to sign up to their Saas:

2nd mailThis was all done through email automation. Once the emails are written and an auto responder is set up, each email is triggered without any manual input from Shopify.

All they need to do is drive traffic to their blog posts and once a visitor opts-in, the rest of their sales funnel is on auto pilot.

It just so happened that the next time I logged in to Facebook that they also served me an advert asking me to sign up to their service.

shopifyad

Yes, it’s true – I love knitting!

Facebook allows you to upload your customer lists and serve them targeted content, and it’s exactly what Shopify are doing to anyone who watches their webinar.

Depending on your product or service, you may need to send five emails before you pitch your core offer, or maybe just one. As a rule of thumb, high-ticket items typically require more emails to nurture the prospect than low-ticket items.

I mean, if you’re selling a $20 t-shirt, then nobody needs to read five emails before they make their choice – they’ll likely make an impulse buy if they like it.

However, if you’re selling super high-ticket items such as cars, homes, or high-end training courses, you may want to get a prospect’s telephone number at this stage and then have a sales rep call them up to seal the deal.

If you’ve used a tripwire, fewer emails will be needed as the customer has already spent money with your business. If not, you may need more.

I always find that tying in an offer works amazingly well as it makes the decision easier for leads. Dollar Shave Club give customers a 100% refund if they are not happy with their product.

dsc2

Key takeaway: Create a small series of emails that are sent to your leads with the last email being a sales pitch. Consider uploading your email list to Facebook and serving the exact same offer on their newsfeed.

dollar shave ad

5. Upsell

Upsell: This is when you get your customer to upgrade their product or buy additional extras.

For example, when McDonald’s employees ask whether you’d like to supersize your meal, a Best Buy sales rep asks if you want to purchase anti-virus software with your new laptop, or when a car salesman asks if you’d like Bluetooth in your new car, they are all upselling.

Sticking with the Dollar Shave Club, they upsell via email asking if customers would like to take advantage of their new service Ship it Now which allows you to buy their items and receive them in a few days instead of waiting until the end of the month.

emaildsc

If your core product has no upgrades, the next logical step is to show leads new products, ranges, or services you offer.

Retailer Target send their customer list newsletters weekly about new products and sales.

The upsell is where you increase your customer lifetime value and drastically grow your revenue.

Customer lifetime value: This is the amount a customer spends with your business during their lifetime as a customer.

The reason Dollar Shave Club and HostGator offer such cheap tripwires is because they will make that money back and more during their upsells.

A Cnet report revealed that the average Apple iPhone customer replaces their handset every two years, with 90% of iPhone users intending to upgrade their phone to the latest iPhone. So this means that over a 10-year period, the average iPhone customer has a lifetime value of around $4,000.

Once you know the lifetime value of your customer, you’ll know how much a lead is worth to your business, how to price your tripwire, and how much to spend in advertising.

Key takeaway: Put yourself in your customers’ shoes and ask yourself what the next logical purchase would be in their journey. Use email marketing and paid media to serve them product items and services they will be interested in.

6. Referral

Do you remember the first time you used eBay, Google search, Airbnb, Uber, or Amazon? I bet after your first experience you told at least one person how awesome and smooth the entire journey was (well, maybe if you used Uber).

The final part of a successful sales funnel is getting your customers to find you more customers!

A Nielsen report found that word of mouth referrals from friends is the most credible form of advertising in B2C, with 92% of consumers interviewed saying they trusted their friends’ recommendations over consumer opinions and editorials.

referral

(Source)

Getting customers to refer other customers to your business grows your customer base without you having to increase ad spend.

Tilt use Facebook ads to inform their customers that they and their friends will receive $20 each for each friend they give $20 on Crowdtilt.

Bombas focus on email marketing to send customers emails letting them know they will receive free socks if they refer a friend who places an order.

socks email

Key takeaway: Provide customers an incentive and a really easy way to refer their friends. Customers are much more likely to tell their friends about your business if they will receive something in return.

It’s really as simple as that

You can create your own online sales funnel by using the exact steps above. I highly recommend you grab a pen and paper first to draw your own sales funnel.

Before you even spend a penny on ads or decide how to set up your business’s online presence, you need to draw out your sales funnel so you can understand:

  • which traffic sources you will use
  • which lead magnets to create
  • how you will set up your email auto responder
  • whether or not you’ll use a tripwire
  • what upsells you will include
  • how you will set up your referral program

Growing your business online can be a scary process when you don’t have a roadmap to follow as you’ll often go down roads that come up short. Visit any successful online business, sign up to their email list, or take their tripwire to experience first-hand how they use the exact process above.

What does your current online sales funnel look like?

Do you need help setting up a profitable online sales funnel to grow your business? Contact me for a consultation.

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