In this badass episode inspired by a question asked by a podcast subscriber (Daniel), we cover a question that A LOT of people get hung up over. The question is “At what point do you recommend creating a secondary product/service to offer to customers on the back end as an up sell?”
This question leads me down a full-fledged path of strategizing and structuring your funnel based on which of the three phases you’re in. It’s one you don’t want to miss!
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Jeremy Reeves: Hey guys, welcome back to another episode of the Sales Funnel Mastery Podcast. Today, we are going to go over — it is actually kind of funny because this morning I just wrote an article about the ‘3 Phases of a Sales Funnel’, right. And then I got back from lunch and also in my list of things to do today was recording new podcast episode.
So I got back from lunch and I checked my email and there is a subscriber from let us see — Daniel. So hi Daniel, how are you?
So he wrote in basically asking — he essentially said there is (inaudible 00:00:55) but he essentially said, at what point do you recommend creating a secondary product of service to offer the customers on the backend as an upsell.
So it actually — he had really, really good timing of that question, so thanks Daniel. So I am going to answer that question. You know, not only when should you add an upsell because I know there is a lot of people that are listening to this already you know, have an upsell.
So what I am going to do is I am just going to kind of take you through the article that I wrote called ‘The 3 Phases of a Sales Funnel’ and it is going to help you — and I think it is going to help a lot of people on here because, a lot of people get struck in kind of like the structuring phase like what do I do next, what is the next step, what will I do after that, okay now that is done then what you know, that kind of thing.
So I think this is really going to help crystallizing, clarify a lot of the kind of mental blocks that you are having about this, alright.
So you know, throughout all of my you know, various years of doing this and helping people build sales funnels you know, I have helped all kinds of entrepreneurs to build sales funnels everywhere from you know, people with supplements to people with services, to e-commerce stores, to brick and mortar sales funnels and basically everything in between.
And I have kind of come up with 3 different phases that everybody goes to. Does not matter what type of business it is, does not matter what you sell if it is a product service B to B, B to C, online, offline it does not matter at all right.
Everybody goes through this — this phase, right.
So phase 1 is the foundational stage so this is kind of like the setup and test stage and this is where Daniel is right now. So you know, this is essentially when you are first getting off the ground, right. So in this stage, you are not really looking to you know, 10 extra business or anything like that. What are you looking to do is you know, reclaim some of the time that you are putting into the business by automating some of your key marketing processes and also increase revenues by having more marketing systems in place and have a little bit more consistency and reliability in your cash flow, right.
So the types of people that are going to be in this stage are — if you are just starting out, you are kind of boot strapping, you are in that you know, that guerilla marketing stage where you are just going out and hustling and trying to get sales, right.
You are probably in either below 6 figures or in the low 6 figures so you know, say somewhere between and you know this varies but roughly between 0 and I do not know, maybe $200,000 or so, okay, couple hundred thousand, right.
It is also for people who are doing well without a funnel but are kind of a little bit hesitant about marketing and that is really because a lot of these people are like even — like for example, I have a client that is doing about 3 million dollars right and that was basically without a sales funnel. You know, that was — I guess she was doing 3 million. So that was without a sales funnel. So then we went in and we helped her and she is still in the process of putting it all together and all that kind of stuff.
And she did a little bit different like nothing super crazy because she wanted to kind of see the results first and then you know, it was new to her. So she wanted to start a little smaller, okay.
So this stage is not — it is not there to maximize your profit. It is really to get a foundation in place that can be built upon as you increase results and then you get more cash to then reinvest back into your marketing campaigns, right.
So what are you going for in this stage, you are really trying to figure out exactly you know, who you market is, what your USP is, exactly how you can help people, what makes you standout that is different in the marketplace right. That is what that stage is about you know, figuring out you know, starting and get some systems in place, marketing and like operational systems all that kind of stuff you know, add a couple employees that kind of thing, just to get your legs going you know, just kind to kind of get a little momentum in the marketplace, right.
So what makes up you know, if you are going to think about a list of everything that makes up your kind of foundational marketing funnel, it is going to be your unique selling prepositions. So in this stage you are finding out you know, like I just said, you need to know exactly who it is that you help, what end result that you given them and how you do it in a way that is unique to you and your company, right.
Because that, once you have that, that is going to be the cornerstone of all your marketing communication that you have throughout the funnel. So there is no point in going to phase number 2 or getting into like you know, crazy segmentation and all that stuff without knowing your USP because then you are just going to — you are going to have to go and redo everything, right.
I also recommend having basically a lead magnet, a prospect email sequence, at least 1 core offer and 1 upsell offer and a buyer sequence, okay. So you know, lead magnet as you know, I am sure everybody knows this is like something that you give away for free to get people to raise their hand to say, ‘Hey, I am interested in what you got’, you know, so it could be a free PDF, video, webinar you know, physical book that you give away free plus shipping, something like that.
So when they opt in to that you know, so it is like, ‘Hey you know, raise your hand if you are interested in whatever it is’, losing weight 7 days or less whatever. So they opt in, they go into your prospect email sequence.
These — the prospect email sequence this first one is basically designed to show people that you specifically are the person to best equip to help them solve their problem. So they should be written you know, in a way that is entertaining, engaging, valuable and offers a chance to click on you various links to go to your products and services, okay, pretty simple.
And for this phase, I usually start off with you know, 10 emails over 30 days is a good — actually 11 emails over 30 days alright, because you should also have an indoctrination email in there which I might do a separate — I am actually writing an article about that too. So I might do a separate podcast just about that.
So 11 emails over 30 days but the first 2 go out immediately you know, when they opt in. Then you should have — I usually recommend you know, some people just say, oh well you should just have 1 service or 1 more product or whatever, I usually like to do 1 you know, 1 core main offer and then 1 upsell offer of some sort, right.
So you really in this stage you do not want to go much higher than that because again, you are trying to find out exactly what your USP is, exactly what traffic source you know, what is working for you, what types of marketing works you know, what types of people are attracted to you — you are trying to like pull out your personality a little bit because it takes a while to get that. You know, you are trying to get all this foundational stuff in place, okay. So just 1 main offer and then 1 upsell offer, okay.
And then a buyer sequence, so people who buy your product, they should get a buyer sequence. If they buy your main offer, then you, you know, your first couple emails are essentially like, ‘hey, thanks’ you know, is to get them to actually use the information so they will get a good experience so that you can then get case studies and testimonials things like that, so you can start building your proof.
And then as it goes up to you know, after the first couple of emails, then you start getting into, ‘hey you know, maybe you have seen some results already you know, if you have not, here is a couple of ways to get better results’ and then once you have you know, ‘here is another thing that we offer that is going to get you even better results’, okay.
So that is basically the foundational funnel right.
Now in terms of you know, in terms of the next phase which I call the maximization stage okay. This is you know, I do not really like to say like, oh it’s you know, like he said, in a book that he was reading by Mark Ford, I forgot what the book is called, let me look real quick. It is called, and it is really good – ‘Ready, Fire, Aim’ which by the way, it is an awesome book, Mark Ford is brilliant.
So ‘Ready, Fire, Aim’, if you have not read that, go pick that up by Mark Ford it is awesome. It might be Michael Masterson I forgot which name he uses for that one. Michael Masterson is his — like pen name.
So he says that you really should move on to this next stage, you know, until like you should really only have like 1 core offer until you hit a million. I think it is a more like maybe the $500,000 mark, something like that, but you know again, it kind of varies, I do not really think that is — I do not really think that you can put you know, — I do not really know that you can a number on it because there is too many factors involved.
So you know, let us just say roughly you know, $250 to $750 okay, somewhere in that range just when you should start thinking about phase number 2.
Phase number 2 is the maximization stage okay and this is when basically you maximize the potential of your marketing funnel, okay. You are not maximizing your funnel. You are maximizing the potential of your marketing funnel, okay. It is kind of like putting a supercharger on a car but not having the other things that are going to maximize the supercharger like if the supercharger is capable of producing 800 horsepower but you also need you know, an upgraded exhaust, you need an upgraded headers like all that kind of stuff. By the way, I apologize for anybody who does not anything about cars but you know, supercharger makes the car go faster but you also need some other parts to really maximize the power of the supercharger, okay.
That is what the maximization stage is. So essentially getting all of your stuff in place and then on the next phase which is like the testing and perfecting stage that is what you actually maximize everything.
So in this stage, you are going to be implementing all the various pieces that make up for the potential — they make up the potential for the perfect funnel, okay. So again, I typically you know, let us just say somewhere in like the $250,000 to $750,000 range, so let us just say roughly $500,000. Mostly because at that point, you already know who your market is, you already know you know, a lot of the factors that are working so then you can put things in place to then you know, kind of move up the ladder.
So a couple of things that I recommend for this stage right. Number 1 is segmentation. So this is when you are going to want to begin segmenting your funnel. So that means that you know, you can segment your prospect lists so you can speak to them in a very much more articulate way for you know, for example you can segment them by you know, men versus women or by age or by interest or whatever make sense for you.
It also means segmenting your buyer’s emails and putting them into unique categories based on what they have purchased in the past. So let us just say that you have 2 or 3 different you know, you have 2 or 3 products in your upsell chain right and I am just pretending I know some people might not have an upsell chain but you know, if 2 or 3 different products of services they are only going to get emails in the buyer sequences based on the things they have not bought, okay. Whereas in the beginning, maybe they already bought you know, essentially you are just doing 1 buyer sequence and that is for every, any buyer and then in this you are going to segment them based on exactly what they bought, okay, I hope that make sense.
And you are also going to want to make sure that you know, if they bought a $997 course, you want to make sure that you are not trying to sell them something for $97 because it does not really make funnel. It does not really make sense.
So you know, if they bought something for $997 then you want them to be going up the ladder not down the ladder, okay.
So you know, there are a whole bunch of places to do this by the way, you can do it on your landing page, you can do it based on the opt in so they could get different email sequences and you know, list or campaigns based on what type of opt in they have because you know, if you have 1 for your report that is like you know, how to lose weight by juicing you know, and then another for your report, how to lose weight by running. Well, obviously 1 person is more interested in the nutritional side and the other person is more interested in the exercise side, okay. You are going to talk to those people very, very, very differently, okay.
You can also do things like you know, for one example you know, you might send it like a pop-up quiz determining you know, which — if I was doing this for you right, I could say, I can have a pop-up quiz. I can send you guys 2 quiz that says, hey, you know, here are a couple of questions that you can answer about your business and I actually might do this, it is actually kind of good idea you know. I would ask you a couple questions and based on your questions it would tell me if you were in which of these 3 stages and then based on which of those 3 stages, I could then determine what — you know, I could then have an educated guess on what the solution would be.
So for example, if you are in phase 1, well then my products would be a really good solution for you because you probably do not have the budget to go out and hire somebody for a sales funnel, whereas if you are in phase 2, where you are at least you know, couple hundred thousand dollars in revenue then you know, most likely have the revenue to be able to hire somebody like us, right. So you could do things like that.
So there is a lot of different ways to segment your audience. I cannot really go into the whole thing here because that is — you know, that is like a whole book in itself, let alone you know, part of a podcast.
So the next part is filling in your product suite. So basically, you are just gonna want to look for any gaps in your suite of products and services, okay. So you are going to be wanting to look in 2 main areas, 1 is adding some type of continuity program so you can help generate a little bit more consistent cash flow and then the second part is coming out with a higher price products and services that give people you know, whatever results that you are giving in your first product come out with something that is higher-end or gives an even better, faster, easier results, okay.
You know kind of a general rule of thumb with that is that the more access they get, either to you or the more detailed information in the course, the better, faster, and easier results then the higher you can charge, okay.
And then the next thing is — the next thing that you going to want to focus on in phase number 2 is getting paid traffic to work, so scalability, right. You are going to want to make sure that your funnel is scalable.
So in phase 1, a lot of your traffic is going to be from things like SEO or joint ventures or you know, doing things you know, having like a platform you know, like this, this is a platform where I can kind of share my ideas and I get a lot of people who listen to this and become clients you know, some kind of platform like that.
I also write a bunch of guest articles, I am on other people’s podcast that kind of thing. So that is all traffic in like stage 1, right. And then you can also — and keep doing that, by the way as you move down on stage 2 and 3 that is totally fine because those — you know, the stage 1 traffic sources are generally a lot more profitable right, like per, you know, per visitor like your ROI is a lot higher but they are more time consuming.
So as you go in phase 2 into paid traffic well paid traffic you are not going to have the same ROI but it is a lot less time-consuming because you should have somebody you know, managing your traffic for you and you have a lot more reach, you know, whereas if you go on a podcast you know, maybe you are in front of I do not know, couple hundred people, and you might get like you know, 10 to 50 opt-ins something like that versus you know, you spend like an hour or 2 hours of your time versus you know, doing paid traffic and you could get you know, a thousand opt ins every single day with 0 work, right.
But the thing with paid traffic is it takes time you know, a lot of people are like, ‘oh you know, the first time we do anything with the funnel is going to be instantly profitable’, well you know, sometimes it works like that and that is awesome. Other times it does not, it kind of depends on your industry. If you do that in a health niche, for example, then it is probably going to take you a little bit of time, a little bit of testing and tweaking to really get that to work, so that when you put in $1 you are going to get $1.50 or whatever it is, right.
So paid traffic is really like the big thing in phase number 2, okay. Because honestly, like when you get to the point where you can spend $1 and make $2 I mean the game is over, because if you can outspend you competitors that is when you win every single time because you know, you essentially just outbid them in everything that you do, so that is kind of like the you know, the holy grail here.
And a lot of these other things help make that happen so by doing segmentation, by filling in your product suite that is what is going to allow you scale because you are going to have a better backend to make your profits because if you want to scale, you are probably not going to make a ton of money upfront you know. You might make maybe like a 10% to 50% return like you know, if you spend $1 you are going to make $1.10 to $1.50 back in most cases on the frontend, okay or even break even, it is fine.
Where you make the money in phase number 2 is in the backend. So phase number 1, you are making all your money in the frontend. You move to phase number 2 that switches to the backend, okay.
The next thing — and the last thing for phase 2 is hybrid marketing. So a lot of people, if they — you know, they call themselves “online marketers” which is the biggest bullshit in the history of the freaking world. Please if you call yourself an online marketer just take you know, take your — grab your right wrist with your left hand and smack yourself across the face with it because if I was there with you, I would do that for you.
This is a huge, huge, huge mistake and also, I mean you know, I am kind of saying that well, semi-sarcastically, I probably would not smack you in the face but it’d be kind of fun but anyway, if you are only doing online marketing right, it is okay, in phase 1 it is okay, because you are essentially focusing just on, like, being profitable actually getting money, coming in the door so you can reinvest it.
In phase 2 you really, really, really want to start switching to hybrid marketing because — I mean this is like — I mean this is the topic for an entire book but you know, just the kind of like sum this up, I mean there is just so many different ways to generate business in both areas that it is just stupid not to, you know. A lot of times your lead acquisition costs are cheaper on the internet but if you are not doing things offline you are missing an entire segment of the market, you know. You cannot do things like postcards or have salesmen to call customers after ordering which by the way is one of the fastest way that you can scale paid traffic, just a little hint there. You know, doing trade shows, doing events, doing speaking, doing direct mail letters, joint ventures. I mean there are so many different things that you can do offline.
For example, I am gonna be coming out with something called funnel weekend, right. That is going to be an offline event that I am doing and it is going to grow, you know, it is going to be one of our new things that we are doing this year to grow the business, right, and I will do an announcement when that gets a little bit closer but it is going to be pretty awesome.
So basically, you know, do hybrid marketing. If you are in phase 2, start thinking about hybrid marketing and how you can start moving offline right, not only offline but both online and offline, okay.
Phase number 3 is the perfection stage. So in this — if you have ever heard the song, this is the song that, I forgot was it doesn’t end or never ends. This is a song that doesn’t end or never ends, I do not know what it is, doesn’t end, I do not know I think it doesn’t end. It is kind of like this you know, this is the phase that never ends, okay.
So phase 3 is basically split testing. It is basically taking what you already have and getting it perfect because no matter who you hire right, I am saying this as somebody who builds sales funnels and one of the best out there, by the way. No matter who you hire to build your sales funnel it will never ever, ever, ever, ever — it is impossible to be perfect the first time that it is done because nobody is psychic, you know. Trust me, if I was psychic, I would be the first trillionaire in the world because I would be able to say, ‘hey, this is going to — you know, we are going to do this and because we already know that you know, we have done our little psychic shift in our mind and you know, we found out we have kind of tapped in to the ethers and they told us that this is the best possible combination of all these hundreds of variables, okay’. And if I have that ability, I would be trillionaire probably tomorrow.
Unfortunately, you know, we do not have that ability. So that is why split-testing was invested.
So you know, in stage number 3, you should have your metrics. All your metrics should be you know, you should have them laid out, you should be you know, counting them or whatever, not counting them but keeping track of them on a monthly basis or weekly basis and a couple that you should do you know, cost per lead definitely, also do that per channel. So cost per lead and cost per customer. Do those per channel. At least do, like, cold traffic versus warm traffic if you do not want to get like super segmented with it.
You know, in phase number 3 like you are definitely in the 7-figure range. A lot of them are in 8-figure range you know, that kind of thing. So you can afford to start segmenting a lot of stuff, right, and it is worth it because you will find that you know, some traffic sources are worth like 10 times more for you and some sub traffic sources like for example, if you are using AdWords, you will find that, you know, AdWords might be — you might get a cost per you know, cost per customer of, you know, whatever $10 on AdWords where maybe it is $100 on twitter something like that you know, I mean obviously that is just an example but — And then you are also, if your average cost per customer is $10 on AdWords you are going to find that you have some keywords, this goes back to the 80/20 rule, you are going to find that you have some keywords that you are getting cost per customer probably $2. So guess what you do. I can let you figure this one out. You do more of that. So, again, very easy.
Another thing is lifetime customer value and then also value per visitor, right. That is a good place to start there is more but that is a good place to start for most people.
So what are you going to be doing in this stage is basically looking, breaking down your funnel step-by-step you know, the opt-in process, the — you know, how many the percent of open rate percent click rate and your emails, your conversion rate on your sales page, your conversion rate on your order form, your conversion rate on each of your upsells and all that kind of thing.
And you are going to test every single, little, tiny step for that funnel and you are going to keep getting each step better and better and better, okay and that is the last stage and really that process never ends, right. That is — you know, because by the time you find the what are you going to get you know, the maximum conversion well you are going to have a new product so then you will have to test that or you are going to have a new marketing channel you know, traffic channel, you are going to have to test that, you know.
So things change. This process just never stops. So once you hit phase 3 it just keeps going and going and going and going and then you know, eventually you outsource that part and then you sell the business and then you know, you make a big you know, bundle of cash and then you go and sit on the beach and get fat for about a year and then you come back and you do the whole process all over again.
So couple of really quick things before we wrap this up because this actually went a lot longer than I thought but I was on a roll there.
So couple quick things with split-testing, okay. Do not test small, right. So do not test things like button color or different fonts or the color of your background, right. That is just — I cannot stand when people talk about stuff like that because it is ridiculous, it is absolutely freaking just insane. I spent a lot of time in the conversion optimization world, I am not like I do not really you know, I am not you know, a CRO conversion rate optimization specialist, but it’s, I mean it is absolutely part of the process. You know, I have gotten offered jobs by some of the best companies in the world to do this stuff and you know, that kind of thing but you know, it is — you know, everything that I read about it is just, oh, it makes me cringe.
So anyway, those little things, do not test stuff like that. Don’t, you know, it is not worth it, right. If you have been split testing for 5 years and you cannot find wins anymore then you can start testing things like that were you are going to get you know, maybe 3% to 5% increases or whatever, right, but in the beginning you want to test things that are going to make a profound difference like your offer which could be you know, your guarantee, your price-point, your terms, what is included, the bonuses, how it structured you know, like the media format, like PDF versus video that kind of thing, your positioning, your target market, your media format so for example text versus video, preselling strategies so what they see before the sales letter and you know, a million other things.
The next thing is, segment your traffic. So I already talked about this you know, make sure that you are segmenting your traffic and a good place to start again is cold versus warm. So test your cold traffic which would be like you know, most paid me there you know, if you are doing Facebook ads, you are doing you know, Google ads, you are doing Twitter or Instagram whatever, post cards, anything like that, that is your cold. And then split test that, have a different funnel essentially like you have — you already have your funnel, so you basically duplicate it and then you keep the one you have as your — as your warm funnel essentially and keep that like for things you know, on your website and when you are doing joint venture traffic and things like that.
And then you have your cold sales funnel and that is specifically for paid traffic, okay. So that is a good place to start and then you can also do, you can also breakdown even more by like you know, AdWords funnel versus the Facebook funnel or you know, you can get crazy like that but that is kind of like the more advanced version of all this. Most people are not gonna have do that — so do that.
The next thing is discover why it works. So when you are split testing, do not look for wins, right, you have to look for learnings you know, hopefully they correlate you know, you get a win and you learned something, but a lot of times, you learned more when you lose tests, so keep that in mind. That is why not every test is a bad test.
So for example, if you test the exact same sales copy in you know, in video format versus text, will you find out what your audience prefers and believe it or not, regardless of what the gurus say, not everybody likes video, trust me on that. And another thing, if you test payment plans, right, and an overwhelming majority of your audience chooses the payment plan over the one-time option. Well, you just learned something pretty valuable that you could use you know, for future use, okay. And very similar to this is look for business wide applications, right.
What I mean by that, is you know — if you test headline right, that headline is kind of specific to that whatever it is that you are selling versus if you test something like video or text like if you have the exact same text, you have a text and you have video and you find out that your conversion rate is 30% higher with text or video or whatever it is, then you know that you should use text in the future or you should use the video in the future, right. That is going to depend on your market and other factors to but you know, things like a headline is going to be very specific to that product so that is not a business-wide application, that is a product specific application versus something like you know, again, you know, video or text or payment options or something like that.
You can apply that in every single product throughout your funnel, right. It is not going to be a 100% but it is going to be you know, in most cases like you have 10 products and you do you know, a video versus text and the video wins, well, then you can do essentially like a second test to like a confirmation test, do it on another product and if that one wins by similar amount well then you know that you can probably count on putting that you know, that find into the other A products and it is also going to give you a similar increase, okay.
So that is about it, it has been over a half hour now. So I hope you enjoyed that. If you know, as usual, if you enjoyed this please leave us your review just go on iTunes and click the little review button and then shoot us an email [email protected] and we will send you our ‘101 Conversion Tips’ which is a PDF that I used to sell for $77 and I will give you that for free for leaving us a review just you know, obviously tells which one that you left and then also if you know anybody who is looking to get a sales funnel created just let me know.
Again, [email protected] just let me know that you are interested and you know, and my team will forward it to me and we can kind of discuss the details.
Also, while I am here I am going to be out in San Diego at the traffic and conversion summit from the 8th until whatever that is, the 12th I am checking my calendar now, 8th until the 12th, yeah, so I will be in that Monday on the 8th and I am leaving Friday morning the 12th, so basically the 8th to 11th.
If you would like to meet up, if you are kind of interested in you know, talking to you know, to me a little bit more about having us build your funnel and you want to meet up I will happily buy you a dinner or something like that. I know that my schedule is really, really booked already so I cannot promise anything but just shoot me an email you know, maybe we can make it happen, maybe not, but you know, it does not hurt to ask you know, I already know that I have a dinner basically right after I land in you know, in San Diego and then I am going to a yacht party on one of the days I am not sure yet and then I am doing another funnel day while I am out there actually kind of a double funnel day and then possibly another one.
So anyway, just shoot me an email. If you are interested in meeting up out there and you are you know, you are considering working with us, you want to kind of meet in person whatever, then hey — you know, even if you just kind of see me walking around make sure you say hi but that would be cool to meet up.
So shoot me an email, [email protected] let me know you are going to be out there and we can see if we can make something to happen, alright. So with that said, I hope you enjoyed this episode, this was a fun one for me, I think we have covered a lot of stuff and I hope this really helps you get a little bit of clarity on helping you know, like kind of structuring your funnel and when to do what and how to — when to move onto the next stage and all that kind of stuff.
So I hope this helps. I will talk to you soon.