An online sales funnel is one of the most important marketing tools any online business has, and yet many businesses have no real understanding of what an online sales funnel is or how it works. By failing to fully understand this important aspect of running an online business means fewer sales, lower profits and could ultimately mean instability and potential failure.

A Simple Sales Funnel

A basic funnel consists typically of free content which normally requires nothing of your readers. Funnels tend to begin with lots of freely accessible content, such as this whole website for example, blog posts, video, social media posts and other content that an audience can easily access and that engages them. This is the “top” of your sales funnel.

You would normally have some sort of attractive offer that requires a very small payment of sorts, this nowadays tends to mean that in exchange for something the readers perceives to have value they will enter an email address. You see this type of offer all over the internet, and chances are you’ve even signed up for some of them. Get this free eBook, report, video series or other valuable information in exchange for opting in to an email list. Just look at the offer following this blog post to see a typical example of this, in practice.

Once someone signs up to a mailing list, different list owners tend to work differently however the end game is always the same to generate sales. The idea is that once someone is on your list you have more time to turn these audience members into customers, this tends to mean readers are then presented with a series of low cost offers as well as additional valuable information.

As customers make purchases of your low priced items they move further down the funnel and are presented with more and higher priced products. As they continue to make purchases they move closer and closer to your top-end offers, which make up the bottom of your sales funnel.

How Your Sales 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, which engages the largest audience. Below this we have something of value to your audience (sold for an email address) which generates a smaller subset of freebie seekers. Next your lower priced special offer products bring in yet a smaller group of audience members. Finally, as you near the tip of the funnel, only the loyalest of fans and customers will purchase your highest priced offers.

As an online business owner it is your job to ensure that your funnel leads buyers naturally from of the top of funnel to the bottom. Its common sense that more buyers you can keep in your sales funnel the more money you will make, however this is only true if you can move your audience through the funnel and not simply stack it at the top.

You can easily envision this funnel, but 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.

What is a Sales Funnel?
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