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How to explain what a marketing funnel is to your customers

We might know overall what a marketing funnel is. But I wanted to give a really high level overview of all the different systems and pieces in place, particularly if we want to explain the concept or the value of a marketing funnel to our customers.

This is an edited transcript of my video on “What Is A Marketing Funnel“.

Who not what

I am the first person to tell you that you need to get really good, at telling people who you help rather than what it is you do. But in order to be able to push a lot of our content, talk to customers who are genuinely interested and sometimes further our own knowledge, it’s important to have an understanding of what the hell I’m talking about when it comes to a marketing funnel

And what you’ll be building a lot of the time, day in day out, or getting your team to build. This is the easiest method that I have been able to explain A) what the marketing funnel is  and B) what it is that we’re going to deliver within a marketing funnel.

When we say “marketing funnel”, that’s kind of a marketing concept. How do we turn that into a physical thing that also benefits our customers?

Marketing funnels

We have a bunch of people that have no idea that we exist. They are out there in the world, that in our broadest possible sense, is our audience. Our audience is made up of the markets and people that potentially would be interested in a product that we sell.

Our job is to get them through to the point where they are a happy, profitable, repeat customers that refer you. The reason we’ve got those four words (happy, profitable, repeat, refer) is because those four are actually measuring metrics in how successful your sales and marketing processes have to be.

4 metrics

They have to be happy, to be delighted with the service. They have to be profitable, because if we don’t make profit from them we can’t continue to exist. They have to be repeat customers. I want to make sure that they continue to buy from me and that they subscribe to me and generate recurring revenue. Also they have to refer me. I want them to be evangelical about my product or my business. I say “my business”, I’m talking in general terms as a customer, or even for your own businesses.

This is useful for you guys to have as well. These four metrics, are what we’re trying to increase through the funnel and the sales process.

  • happy
  • profitable
  • repeat
  • willing to refer

Marketing definition

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A marketing funnel is not as simple as saying “well this half is marketing and this half is sales”. The marketing process is getting people to find, like and trust you, The sales process is working out whether it makes sense for two parties to work together. By the way those two definitions if anyone gets clever or cocky with you and they say “well tell me what the definition is between marketing and sales” you go –

“Great marketing is getting an audience to find you like you and trust you” That’s taken from John Jantch’s book Duct Tape Marketing.  Getting an audience to find you like you and trust you.

Sales definition

The sales process is working out whether it makes sense for two parties to work together. That’s the sales process. Some sales people will do part the marketing process, some marketing people will do the sales process, but in general those two definitions are how we split it.

I will always say to myself “am I creating content that helps people work out whether it makes sense to work with me and vice versa?” Then it’s part the sales process. “Am I getting people to find me like me and trust me?” then it’s part of the marketing process.

No idea we exist

We have an audience who have no idea that we exist. That’s the broadest market that we have. They could be out there on the Internet. They could be people on Facebook. They could be anyone in the world who walk up and down the high Street. This is the overall massive part of the market.

Niche

Ideally we would have some kind of niche, that we want to go into within that market. We want to target just one group but above that we have people, who have no idea that we exist. This is where we do audience research, we do our customer avatars. We do all of that stuff. We determine “this is a market of 3000 people or 180000 people or 50 million people”.

Traffic

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Then we have traffic. These are people that visit our website. These are people that watch our YouTube videos. These are people that listen to the podcast. This is anyone who takes one click or one action, from having no idea that we exist to having something to do with us.

These visits or actions can be on the website, YouTube, podcasts, Instagram etc. There’s a whole load of different ways that people could land, on some kind of content that we’ve produced. Which means they no longer feel that they don’t know that we exist. They no longer have no idea that we exist.

They are now aware that something to do with this product or service or brand or problem or whatever exists.

Cold traffic and remarketing

It still might be very ethereal, that doesn’t matter. This is cold traffic. We’ve moved from “no idea that we exist” into “traffic”. This is where we can start getting clever. If people exit after landing on my website and they don’t sign up to my optin or newsletter, or they don’t buy and they leave. I could then bring them back with remarketing.

Warm traffic

That’s the process where I’ll have my Facebook pixel set up. I’ll have my Google remarketing set up or other remarketing platforms to bring them back to the platform that they were on. If they visited the website and visited a blog post and they never signed up or downloaded a lead magnet or whenever, I want to bring them back with remarketing. That means that they are warm traffic. So if they’ve seen me just once they’re, warm traffic.

Traffic source

The traffic source is often where people start and that’s not the problem. Traffic’s going to take care of itself if you keep producing content. If you got your blog posts for example, you could even consider things like webinars in that as well. If you’ve got any type of content that people are finding and seeing, even if it’s small numbers you’ve got traffic sorted. Don’t worry about that.

Subscribers

The next stage is your subscribers. The big one is your email list. The way that we grow our email list, is with our optin forms and lead magnets. We also have our landing pages as well. This is where we say to someone “would you like to hear more from us? Would you like to see more content from us?”

marketing funnel subscribers

YouTube as well is another good subscriber platform. Growing YouTube subscribers is a very good metric to go after. There is a difference however, between email and 3rd party platforms like YouTube and Facebook subscribers.

3rd party

If I also have a Facebook group for example and let’s say Instagram as well, an Instagram following. The difference between an email list and any other social media is that these are third party platforms. I’ve got no control over those whatsoever. Even if GDPR comes in and everyone goes bat shit crazy and I no longer have control over my users and subscribers data, at least I have CSV of email addresses that I can download. If ActiveCampaign goes under, or if MailChimp goes under, if the law of marketing and Internet changes I at least have got a CSV list where I can manually email people.

If Facebook says “we’re going to charge you per follower inside your group” (which by the way is entirely possible that they’re going to start doing) and they say to you “we’ve got a thousand people in your group you need to start paying 10 cents per user in order to keep using this functionality”, I go “Well I’m not interested in that anymore” and move away.

Facebook is “free”

Mark Zuckerberg by the way has always said that Facebook will be free to use a portion of its users. There will always be a version of Facebook that is free. Where they’re going to start going is monetizing their groups. That’s where the money is. Or they start advertising –  they’ve started advertising inside groups for example. I no longer say can say to my group “hey this is a safe space where everyone can kind of get together”.

You’re also going to be targeted with adverts from people who are going after your particular niche and going after your particular market. Anyway, these are still very very useful because all of this as a subscriber is stating “I want to hear more from you”. That’s all they’re saying. I like what you’re saying. “I like the cut of your jib and I want to hear more from you”.

I want to hear more

That’s your permission to then go. “Hey thanks very much for subscribing. Here’s some more content”. When people go “I don’t want to spam my email list” why? I want to send them an email every hour.

They obviously want to hear from you. There’s obviously a part of your system or business that they’re interested in hearing more about. Email list is the priority. Growing an email list. YouTube and Facebook are great, but you have more control over your email list.

We then have leads. Going from a subscriber to a lead is very very difficult. There are ways that you can measure interest or heat. For example someone in our email list visits a set of three blog posts.

Leads

We consider them a lead if they land on a particular sales page. So if they say “I’m interested in Mike’s coaching or I’m interested in this product or service” just by going to that page from the state of subscriber or from the state of YouTube subscriber or Facebook group member, and they land on a page or they read three blog posts, our measuring and metric systems would consider that a lead.

Here’s another way you can find out if they’re a lead. If they ever reach out to you and say “hey I was wondering if you could help me with losing weight or finding new customers or building a website?” that’s a lead. They’ve expressed some kind of interest in you helping them. That’s the definition of a lead there. They have expressed some kind of interest in you helping them further.

Now you want to take that further through lead qualification, having a call with them, discovery calls, deep dives, consultation, selling splinter products – all this kind of stuff. At its core, anyone who’s expressing an interest in you helping them – that’s a lead.

The sale

Then we have the sale. This is when someone gives you money in exchange for some value that you can provide them. That could be coaching, it could be of course it could be an e-book. It could be a subscription, it could be a physical product, it could be a service or digital product, it doesn’t matter.

It also doesn’t matter about the price. If someone spends $1 with you, they are a customer. The idea of the sale is to convert people in to happy, profitable, repeat customers, that refer you. You can have people who buy 1 x $19 dollar book, who think “this is the fucking greatest book I’ve ever read in my life and I want to tell everyone about this book. I want to give this book to people, I want to share it with them”

Happy, profitable, repeat customer

That’s good. That’s great. You’ve made a happy profitable repeat customer. You can also have a $50 000, who’s not happy with what you’ve given them. They’re not profitable because you haven’t priced it properly. They’re not repeat customer because it was a one off product and they’re not going to refer you because they have no interest in telling you, to work with the rest of their network.

So it’s not necessarily about the monetary amounts. Those four metrics and the way that we can increase the value ($) of the sale, is through something called transaction density.

Sales per day

This is the number of sales per day. So I want to increase all of this to generate one sale a day or 10 sales a day or 1000 sales per day but they’re one off transactions. It might be multiple products, but it’s one transaction per day. Whereas sales per customer, which is another thing that we can increase, which is where customers subscribe to a payment per month of $97.

Transaction value

You also have transaction value, which is increasing the overall amount that a customer spends through the transaction. So maybe that’s then a $1997 product, up from a $19 eBook.

We can focus on any one of these metrics, a customer makes the sale. We can ask ourselves “do we want to increase the number of sales per day, increase the number of sales per customer (by offering them more products) or increase the transaction value by increasing the value of the products?”

That’s your funnel

That there is your funnel. All of this is your funnel. We’ve talked about where the website is, where social media is, where email marketing lives, where sales pages live, what products you can have, where customers live, leads, traffic, all of this kind of stuff – that there is your funnel.

That’s as complex as it needs to get.

You might find your traffic and audience on social and via SEO as well. That’s another big one that people often talk about, but ultimately it doesn’t really matter. It doesn’t really matter what their source is, as much as where I drive them back to.

That is your funnel that is also how I would explain it to customers and it’s core, all we’re trying to do is take people from no idea that you exist through to happy profitable repeat customer that refers you. That’s what’s important.

How do you explain funnels to your customers? Has this explanation been useful? Let me know in the comments below!

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Mike Killen

Mike is the world's #1 sales coach for marketing funnel builders. He helps funnel builders sell marketing funnels to their customers. He is the author of From Single To Scale; How single-person, small and micro-businesses can scale their business to profit. You can find him on Twitter @mike_killen.