For a business owner, a sales funnel is probably the most important marketing tool you have. And yet many entrepreneurs – both new and established – have no clear understanding of what a funnel is or how it works.

As you can imagine, failing to fully understand this critical part of your business means fewer sales, lower profits, and ultimately, an unstable business.

There is a misunderstanding that a funnel is just for online business owners, but actually, the fundamental principles apply to all business owners.

A Simple Sales Funnel

At its most basic, a sales funnel consists of free content, which typically requires nothing of the visitors to your website (or Facebook page if you don’t have a website). Many sales funnels begin with blog posts, YouTube videos, Facebook content, and other information readers can access at no cost. This is the ‘top’ of your funnel – the widest bit.

Next, you’ll have an attractive offer that requires a very small ‘payment’ of sorts – typically an email address. You’ve seen this type of offer on websites all over the internet, and probably even signed up for some. This is the free ebook or guide, video series, checklist, workbook, or other valuable content that is available in exchange for choosing to join an email list.

Once on your mailing list, you’ll then present your readers with information and perhaps offers at regular intervals. Typically, this would be your newsletter (rather like my Monday Morning Motivator. You don’t receive it? Click here to sign up and get yourself an Instagram Marketing Planner to boot!)

Customers who respond to your offers move further down the funnel, and are presented with more, higher priced products. As they continue to buy, they move closer and closer to your top-end offers, which make up the bottom of your funnel.

How Your Funnel Works

If you imagine your funnel as looking like, well, a funnel. It’s easy to see that your free content—at the top—is consumed by the largest number of readers. Therefore, your extreme low-cost item (available only for the cost of an email address) attracts a smaller subset of the true freebie seekers. Finally, your low-priced products bring in yet a smaller group.

Finally, as you near the tip of the funnel, only your best/long-term customers will purchase your highest priced offers.

Your job, as the business owner, is to ensure that your funnel leads customers naturally from the top, free offers all the way to the bottom. The more buyers you can keep in your funnel, the more money you will make.

Most new—and even established—business owners can easily envision the top of the funnel, However if you truly want your business to grow, you must master the entire process, and that starts with understanding what a funnel really is and how it works.

Let Me Give You An Example

You have a direct-sale business selling makeup and skincare.

Your website (which may be something you get as part of your contract with the direct sales company or may be your own website) has lots of valuable content for your prospects to see. Maybe how-to videos, or this season’s colours etc.

You offer a 1:1 appointment (or group class) to local prospects to demonstrate your products – they fill in your contact form to book an appointment. That’s the top of your funnel; it’s easy for people to say yes to this offer, it costs them only their email address.

You now have their email address and they are on your list. They’re at the top of your funnel.

You then send a monthly/fortnightly/weekly newsletter containing small amounts of information about your products, including special offers. Some will buy your offers from a clickable link in your newsletter.

They are now in the narrowing bit of the funnel.

They ultimately become regular customers and buy your products routinely. They are the customers that make up the tip of your funnel; the bottom end.

That’s it – simple huh?

If you need some help figuring out your own sales funnel, you might want to consider my Laser-Focused Clarity programme. I understand that there’s a HUGE difference between reading about something and actually implementing it! The Laser-Focused Clarity programme gives you 1:1 time with me as well as ongoing support.