Understanding Sales Funnels for Direct Sales

Sales Funnel for Direct Sales
Traffic enters your sales funnel and warms up to you through your customer education and relationship-building processes.

Direct sales consultants eventually run into a wall when they have exhausted their friends and family (F&F) and have no one new to promote their product to. Up until that point their revenue was growing and may have leveled off, but it has either started to decline or soon will. Going to their upline, consultants often hear do more IPAs (Income Producing Activities) or go out an meet some warm bodies.

The problem is that doing more IPAs doesn’t create more sales if the people in your network are not interested in more products or have already declined the ones you have. And pushing your product onto unwitting strangers is creepy for them and sucks for you.

What you really need to understand is that pushing products on F&F and assaulting strangers with your product is not a business. It is spam.

A true direct sales business is not dependent on your F&F or body-slamming passers-by to tell them about your opportunity. It is a machine that has 2 major parts: customer acquisition + sales. The problem is that many direct sales companies send you after your F&F, thinking they’ll score the easy sales before you lose interest and drop out and they never teach you the skills for customer acquisition. Compounding the problem is that many of the direct sales people who do have the skills for customer acquisition and sales are operating in the previous century as if the internet hasn’t been invented yet.

In the age of internet marketing, customer acquisition is a process of channeling “traffic” through your “sales funnel” to create a “conversion” leading to a sale. Before I break that down let’s just define these terms.

“Traffic” is what we call the people who are surfing the internet that arrive at any online destination through a link, a search, or a scroll. Someone can come to you via Instagram, Facebook, Twitter, Google, banner ads, Bing, Yahoo, Snapchat, email, Messenger, YouTube or essentially anywhere else on the web and that is your traffic.

A “sales funnel” is the process your traffic goes through to be transformed from someone who doesn’t know about you, your product or opportunity to someone who knows, likes & trusts you and who purchases your thing.

A “conversion” is when your traffic takes a step in the process that moves them to the next phase in your funnel.

The other part of the business is sales and it is equally important because sales are where your cash comes from. Without customer acquisition your business will shrivel up and die; without sales, your business will shrivel up and die. Your job as a business owner is to ensure that both the customer acquisition side of the business and the sales side of the business are functioning optimally.

Let’s look at traffic first. Traffic can be broken down into 2 types: organic & paid.

Organic traffic is when a prospect ends up on your website or social media profile naturally. They somehow found you through searching or scrolling or because someone linked to you or shared your post and they clicked it. The holy grail of online marketing is unlimited organic traffic. I call it the holy grail because it is mythical. Even if you could achieve unlimited organic traffic, the chances are it would be so random and generic that you couldn’t convert your visitors into customers. What is more likely is limited targeted organic traffic, but even that is very difficult to achieve and, more importantly, it is undependable.

Let’s say you were blogging every day for two years and you built a significant source of organic traffic through Google search results on the keywords you targeted in your blog posts. You could not guarantee that on any given day you would get the amount of traffic you need to reach your sales goals. Moreover, at any time Google can update its search algorithm and what was bringing you a thousand visitors daily last week could be bringing you zero today. While it is possible to achieve some success strictly through organic reach, it takes a lot of time and effort to build the asset (website, blog, profile, channel) that will generate that traffic and it is difficult to scale (there is no way to say “lets turn our 1,000 daily visitors into 10,000 daily visitors” and achieve it quickly and dependably).

Paid traffic is generated through some form of advertising, whether it be Facebook Ads, Google PPC, YouTube Ads, Solo Ads, Banner Ads, or a paid sponsorship to a blogger or social media influencer (like a paid IG shoutout or a YouTuber influencer unpacking your product on video with your link in the video description). Paid traffic is dependable because all you have to do to get the traffic you need is to pay for it.

In order to have control over your business you need a predictable amount of traffic, a predictable conversion ratio, and, therefore, a predictable revenue stream. So, while organic traffic is great, paid traffic is how you build and scale a business.

In order to make paid traffic work for you, you need to have 1) a dependable traffic source and 2) an offer that converts…you also need to know the value of obtaining a customer and the cost of acquiring a customer. (Hint: the value of the customer must be higher than the cost to acquire the customer or you will go broke)

A concept you need to understand when it comes to traffic is “traffic temperature” — we classify traffic as cold, warm & hot. Cold traffic are those people who are unaware of the problem or solution — they are the average people on the internet. Warm traffic are those people who are aware of the problem and a solution but are unaware of you and your product. Hot traffic are those people who not only are aware of the problem and solution but also who know, like & trust you and are interested in your product offering.

This brings us to the “Sales Funnel.” A sales funnel is the pathway you lead your traffic down to get them from a person unaware of the problem, the solution, or you to a becoming a person who recognizes the problem, is aware of the solution and wants to purchase the solution from you. Essentially, a sales funnel is an education process that indoctrinates a person to who you are and what you offer and ultimately gets them to purchase a product or series of products and offers from you. You can think of the sales funnel as a series of steps and each time they take a step down the path it is a conversion. Optimizing your sales funnel is a process of optimizing each step so that you have a higher conversion rate at that phase in the sales funnel.

The process can be broken down even more into “micro-conversions.” For instance, a micro-conversion may be something like getting someone to make a comment on a Facebook post. These are important actions because the more small steps a person takes in moving towards you and your solution, the more committed and invested in you they become and the more likely they are to ultimately purchase your offer.

Direct sellers aren’t taught where to get traffic, how to turn that traffic into buyers and how to create a tribe of people who what to purchase the products over and over. This is the biggest challenge when selling products for a direct sales company…the products are great and people love them but there is a gap in training consultants how to find, educate and develop relationships with those people.

Direct sales consultants eventually run into a wall when they have exhausted their friends and family (F&F) and have no one new to promote their product to. Up until that point their revenue was growing and may have leveled off, but it has either started to decline or soon will. Going to their upline, consultants often hear do more IPAs (Income Producing Activities) or go out an meet some warm bodies.

The problem is that doing more IPAs doesn’t create more sales if the people in your network are not interested in more products or have already declined the ones you have. And pushing your product onto unwitting strangers is creepy for them and sucks for you.

What you really need to understand is that pushing products on F&F and assaulting strangers with your product is not a business. It is spam.

A true direct sales business is not dependent on your F&F or body-slamming passers-by to tell them about your opportunity. It is a machine that has 2 major parts: customer acquisition + sales. The problem is that many direct sales companies send you after your F&F, thinking they’ll score the easy sales before you lose interest and drop out and they never teach you the skills for customer acquisition. Compounding the problem is that many of the direct sales people who do have the skills for customer acquisition and sales are operating in the previous century as if the internet hasn’t been invented yet.

In the age of internet marketing, customer acquisition is a process of channeling “traffic” through your “sales funnel” to create a “conversion” leading to a sale. Before I break that down let’s just define these terms.

“Traffic” is what we call the people who are surfing the internet that arrive at any online destination through a link, a search, or a scroll. Someone can come to you via Instagram, Facebook, Twitter, Google, banner ads, Bing, Yahoo, Snapchat, email, Messenger, YouTube or essentially anywhere else on the web and that is your traffic.

A “sales funnel” is the process your traffic goes through to be transformed from someone who doesn’t know about you, your product or opportunity to someone who knows, likes & trusts you and who purchases your thing.

A “conversion” is when your traffic takes a step in the process that moves them to the next phase in your funnel.

The other part of the business is sales and it is equally important because sales are where your cash comes from. Without customer acquisition your business will shrivel up and die; without sales, your business will shrivel up and die. Your job as a business owner is to ensure that both the customer acquisition side of the business and the sales side of the business are functioning optimally.

Let’s look at traffic first. Traffic can be broken down into 2 types: organic & paid.

Organic traffic is when a prospect ends up on your website or social media profile naturally. They somehow found you through searching or scrolling or because someone linked to you or shared your post and they clicked it. The holy grail of online marketing is unlimited organic traffic. I call it the holy grail because it is mythical. Even if you could achieve unlimited organic traffic, the chances are it would be so random and generic that you couldn’t convert your visitors into customers. What is more likely is limited targeted organic traffic, but even that is very difficult to achieve and, more importantly, it is undependable.

Let’s say you were blogging every day for two years and you built a significant source of organic traffic through Google search results on the keywords you targeted in your blog posts. You could not guarantee that on any given day you would get the amount of traffic you need to reach your sales goals. Moreover, at any time Google can update its search algorithm and what was bringing you a thousand visitors daily last week could be bringing you zero today. While it is possible to achieve some success strictly through organic reach, it takes a lot of time and effort to build the asset (website, blog, profile, channel) that will generate that traffic and it is difficult to scale (there is no way to say “lets turn our 1,000 daily visitors into 10,000 daily visitors” and achieve it quickly and dependably).

Paid traffic is generated through some form of advertising, whether it be Facebook Ads, Google PPC, YouTube Ads, Solo Ads, Banner Ads, or a paid sponsorship to a blogger or social media influencer (like a paid IG shoutout or a YouTuber influencer unpacking your product on video with your link in the video description). Paid traffic is dependable because all you have to do to get the traffic you need is to pay for it.

In order to have control over your business you need a predictable amount of traffic, a predictable conversion ratio, and, therefore, a predictable revenue stream. So, while organic traffic is great, paid traffic is how you build and scale a business.

In order to make paid traffic work for you, you need to have 1) a dependable traffic source and 2) an offer that converts…you also need to know the value of obtaining a customer and the cost of acquiring a customer. (Hint: the value of the customer must be higher than the cost to acquire the customer or you will go broke)

A concept you need to understand when it comes to traffic is “traffic temperature” — we classify traffic as cold, warm & hot. Cold traffic are those people who are unaware of the problem or solution — they are the average people on the internet. Warm traffic are those people who are aware of the problem and a solution but are unaware of you and your product. Hot traffic are those people who not only are aware of the problem and solution but also who know, like & trust you and are interested in your product offering.

This brings us to the “Sales Funnel.” A sales funnel is the pathway you lead your traffic down to get them from a person unaware of the problem, the solution, or you to a becoming a person who recognizes the problem, is aware of the solution and wants to purchase the solution from you. Essentially, a sales funnel is an education process that indoctrinates a person to who you are and what you offer and ultimately gets them to purchase a product or series of products and offers from you. You can think of the sales funnel as a series of steps and each time they take a step down the path it is a conversion. Optimizing you sales funnel is a process of optimizing each step so that you have a higher conversion rate at that phase in the sales funnel.

The process can be broken down even more into “micro-conversions.” For instance, a micro-conversion may be something like getting someone to make a comment on a Facebook post. These are important actions because the more small steps a person takes in moving towards you and your solution, the more committed and invested in you they become and the more likely they are to ultimately purchase your offer.

Direct sellers aren’t taught where to get traffic, how to turn that traffic into buyers and how to create a tribe of people who what to purchase the products over and over. This is the biggest challenge when selling products for a direct sales company…the products are great and people love them but there is a gap in training consultants how to find, educate and develop relationships with those people.

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