The Importance of Your Sales Funnel

A sales funnel starts by qualifying potential customers. Typically the metaphor of the funnel is that it’s wide at the top and narrow at the bottom. You  start with a large number of potential customers entering the top of your funnel, and finish with a much smaller number of A-grade customers who buy  everything you have.

At the top of your funnel, it’s usually where you offer something for free. This needs to be highly valuable information so that you can create desire to  opt-in, and then establish trust and credibility.

Too often I see low-grade offers on the front and site owners wonder why no one is giving them their name or e-mail. Whatever you offer—it must have a high appeal and be relevant to your following offers.

Once you have earned credibility and formed a relationship with your potential customers, it will be much easier to sell them your (or other people’s) products.

Not all of the people who enter the top of the funnel will end up buying from you. In fact the chances are, most won’t.

And not every customer will end up buying everything you have. However, there is a very important metric you need to be aware of based on the  number of people who do buy, and the average amount of profit you make from each one.

Once you have been in business for a while you can find out what each customer’s lifetime value to you is. Once you know this figure, you know how much you can invest back into attracting new customers and getting them to enter your sales funnel.

This metric—the lifetime value of a customer—is perhaps one of the most important numbers you will ever know. And those businesses that understand this number are able to dominate in any niche they choose to enter.