9 Simple steps to creating a profitable sales funnel

For the next few days I will be covering:

Introduction to Sales Funnels

An Overview of How the System Works

Tracking

Important Terms You Need To Know

Step 1 - Picking the Right Market

Step 2 - Creating Your Squeeze Page

Step 3 - Your Free Gift

Step 4 - Your Thank You Page

Step 5 - Split Test Everything

Step 6 - Choose the Right Products to Promote

Step 7 - Creating and Sourcing Content

Step 8 - Getting Traffic

Step 9 - Emailing Your List

Introduction to Sales Funnels

How would you like to set up a simple system that collects the email addresses of your prospects and then markets to them automatically? We are of course talking about a sales funnel, something you can set up in one day in almost any money-making niche. It doesn't take any great skill or talent. You don't need your own products. You don't even have to use your own content.

You simply need to set up the system and then put it to work for you, yet new marketers hesitate to do this. Is it because the system looks too easy to be effective? Or because new marketers are afraid they don't know all of the steps involved? With this primer it won't matter – you'll have everything you need to get started today.

The best sales funnels are tested and tweaked to maximize your profit. You might think it's not that important if you're earning $1.00 per prospect or $2.00 per prospect – after all, it's all profit, right? But the better your sales funnel is at making money, the more and better advertising you can afford. If your funnel is only making pennies, then you can only use free methods to generate traffic. But if your funnel is making real money, you can reinvest some of those profits into converting even more prospects into even more sales.

A good sales system will build solid relationships with your lists so they open and read your emails. And best of all, it will allow you to “print money” on demand, simply by sending out an email.

There are two types of sales systems you can build – lead driven and sales driven. A lead driven system puts prospects into your system when they enter their email address to receive your free offer. A sales driven system is made up of buyers only. For example, you place a product on the Warrior Forum, pay 100% commissions to maximize sales from affiliates, and then collect the email addresses of the buyers.

It's a good way to build a very solid list, but you need your own products to make it work.

That's why we're going to focus on the lead driven system, because you don't need to have your own products. Instead, you can promote affiliate products and let someone else worry about setting up sales pages, delivering products, sales support, customer service and all of that. Eventually you might want to add your own line of products, but for right now it's much faster and easier to let other people handle the product end while you focus your efforts on getting leads into your system.

Now you might wonder – why not simply send traffic to an affiliate offer? Why build a sales system? And the answer is of course that with your own sales system, you get to keep the leads and continue to market to them over and over again. If you're simply sending traffic to a sales page you don't own, then regardless of whether they buy or not, you never capture the email addresses and they're lost to you forever.

An Overview of How the System Works

You'll use various methods to send people to your website. These methods might be paid advertising, social media marketing, media buys, link swaps and so forth.

The visitor enters their email address in exchange for your free offer.

That new subscriber automatically receives the free offer, and this part is important: They are redirected to a special offer. This offer is usually something that is steeply discounted and extremely limited time-wise.

If the new subscriber purchases, they're placed on the customer list. Otherwise they stay on the lead list. Either way, they continue to receive content and promotions from you every day or two, automatically via the autoresponder.

Tracking

This could be one of the biggest reasons new marketers don't create affiliate funnels – they don't know how to fine tune those funnels to make the most money. But the money is in the tracking, because by tracking you know what's working, what's not and what needs improving.

You can track everything in your business, and by tracking, you turn your funnel from guesswork into a scientific process that tells you exactly what to do to maximize your profits.

Imagine you've got two different versions of your offer and you test both. Version A is making half the sales of version B, so what do you do? You eliminate Version A, send all your traffic to Version B and begin testing to improve Version B even further. Using this method your business is guaranteed to improve over time - It's that simple.

If you don't track and test, then every sale you get will be from sheer dumb luck. In addition, you will be leaving more money on the table than you can even guess. Not only do you lose all the profit you would have made from the increased conversions, but you also lose all the profit you could have made by reinvesting the extra profit into more traffic. Think about that.

Important Terms You Need To Know:

EPC – Earnings per Click. This is the money you make versus the number of people that clicked over to your page. So if you make $246 for every 100 people who visit your page, then you're making $2.46 per click. 10 clicks = $24.60 and 100 clicks = $246.

Why knowing your EPC is important: If you know that statistically speaking, every time someone lands on your page you're making $2.46, then you know exactly how much you can spend per click to drive prospects and stay profitable.

One note: Your EPC might only include the money you earn immediately from your sales funnel – generally from your one time offer. Or if you're able to track for a period of time, you'll know what your EPC is for the lifetime of your customers, also known as the...

LCV - Lifetime Customer Value. The average dollar amount that every lead is worth. This number will be significantly higher than the initial EPC you earn from your list building one time offer.

When you know how much money you're making, you know how much you can spend on advertising. So let's say, factoring all the purchases they make, that your average customer is worth $50. This means you can spend anything up to this amount on advertising to acquire your new customers and you will still make money.

CPL – Cost Per Lead. How much it costs to get a lead into your funnel. If you spend 10 cents to send a lead to your opt-in page, and 1 in 5 of those leads opts into your list, then you are spending 50 cents for each lead.

IMPORTANT: LCV – CPL = Your Profit. If your lifetime customer value is $50, and you're paying $5 per lead, then your profit is $45.

Break Even Point – This is the point in your sales funnel when you break even. You can calculate this by knowing what your CPL is and what the average conversion rate is on each offer you make in your sales funnel. Depending on the offers you're making, your conversion rate and your CPL, you might break even the same day you get a new lead by immediately selling them on a one time offer. Or the breakeven point might be when you make the second offer a couple of days later, or the third offer after that. By knowing your breakeven point, you know when you will recoup your money and when you will be in profit on the average lead.

The faster you can reach your breakeven point, the faster you can grow your business, because the faster you can reinvest your money into getting more leads. Thus you want to tweak your funnel to reach the breakeven point as fast as possible without alienating your new leads with offers.

The best way to reach your breakeven point in the least amount of time is to make an incredibly great one time offer the moment they join your list. This offer should be such a great deal that it's hard to resist, so you want to give far more value than the small amount of money you're asking for. And placing a countdown timer on the offer will further increase conversions.

These numbers are crucial to your success. Knowing them and improving them are the absolute key to building a long term thriving business, because you know exactly what you can spend to get leads while still making a good profit. On the flip side, guessing what your numbers are or simply not knowing is the fastest way to failure in building a sales funnel.