A Marketing Funnel that Converts, Perfectly Explained

Marketing your product is one of the two major factors of success!

Wanna know how an effective marketing funnel works?

OK, let’s break this down…

Marketing Funnel Infographic

As I have stated in previous articles, mindset altering/improvement is the most important aspect of any successful individual, if he wants to make some achievements in his life. Everything begins from the correct mindset. The small percentage that remains, which is the technical part, or the know-how, name it as you like, comes at a second distant place.

That doesn’t mean though, it should be neglected. So I felt the need to add some more actionable (technical) content. From time to time, apart from all the theoretical knowledge you will acquire here, about wealth, business and women, I will include some more technical pieces, with how to’s and ready for action techniques.

Today’s article is such an example, and one of the most important ones, in my opinion. As I have said in the past, business is all about creating value and offering it to people, sometimes for free, sometimes in exchange for other forms of value (mainly money).

It all comes down to two major components:


Is it really that simple?

Yes it really is. As long as you have a very good product and a solid marketing strategy, success is the only way.

[bctt tweet=”A very good product and a solid marketing strategy is all you need”]

Today I’ll talk about the second one. Marketing. I consider myself very lucky (and you should consider yourselves the same) because we live in an era that marketing can come in many ways and without spending too much money either.

Some, not so many, years ago the only ways to promote your business was through, television, radio or newspaper. This changed rapidly when Internet was finally established. Today with social media, it is even easier to make your brand known and create awareness around your name.

But like any strategy or plan, there are good and efficient ways to do it and not so efficient ones. Today with the help of the massive acceptance of social media we can make our product known to every corner of the earth for a fraction of money/effort, someone needed a few years back.

Let’s talk about customer acquisition

Customer acquisition is one of the fundamental concepts in every business and a common point of failure among them. Every customer you acquire for your business has always a cost and no matter how hard it is to calculate, you should always be in place to know what this cost is. Moreover this cost is always higher than the customer retention cost, which is the cost of keeping your current customers happy – yes there is such a cost as well.

Let’s see an example:

Supposedly you run an online business selling fitness coaching, dvds, custom diets etc. Apart from the operational and product development costs, you also have marketing costs involved. Each time you spend some money on promotion like Facebook, Adwords etc. you pay this money to attract (acquire some new customers).

So for simplicity’s sake, let’s suppose you paid 1k on promoting your new dvd by showing your ad to 2000 people. Out of them, a small fraction will buy your product. Let’s suppose that 2% of the people who saw your ad, become your customers. That’s 40 people and each one of them costs 25$ to acquire.

Now let’s say your dvd costs 40$, so out of every customer, you earn 15$. Of course this scenario is oversimplified because most of the times, Customer Acquisition Cost (CAC) is a bit more complex to calculate and Customer Lifetime Value (CLV), which is the total value you will get from this customer as long as he is loyal to you, is more than a dvd.

What is a marketing (sales) funnel?

Imagine an actual funnel that you pour water on one edge, you apply some filters and you get distilled, refined water on the other edge.


In simple words, a marketing funnel is a step-by-step procedure that helps you:

  • Step #1: Build trust and authority with your audience
  • Step #2: Convert some of them as your low end customers
  • Step #3: Convert some of them even further with an upsell
  • Step #4: Convert some of them even further with high magnitude upsells

The beautiful thing about this model is that, all these steps are applicable for EVERY business. Whether you sell online or you have a brick and mortar business, whether it is retail or not, even if you want to mate with someone, this model will work. It might not be that effective for every business model or venture but the principles, if applied correctly will have a tremendous impact on your business’ success.

Let’s see those steps one by one:

Step #1: Build trust and authority with your audience

This is the first and possibly the most difficult part of all. This is the part where you only *give* and you *do not receive* – at least in money terms. Our only focus during this phase is to produce and give away for free, as much value as possible to our potential customers.

Following the example with the fitness website as before, this is the part where the fitness guy, (that means YOU), is building an active community by:

  • writing blog posts
  • making presentations
  • giving away free meal plans
  • providing general advice about fitness, health, nutrition
  • producing short length videos with exercises on youtube
  • recording podcasts with interviews with other fitness gurus
  • giving a free introductory webinar on fitness issues

Your goal is to give away FOR FREE, every kind of valuable information you can in order to attract people’s attention, build trust and authority with them.

As long as people find this information useful to them, they will keep coming back to your website for more.

Then and only then you can proceed to step 2.

Step #2: Convert some of them as your low end customers

Here in this step, we have our first actual option to make some money. The logic behind this step is to promote a more *special offer* than our free offer, with a low intro price in order to attract as many customers as possible.


We need to use the scale principle here. We need to lure as many customers as possible with a low cost offer, something between 7$ to 17$. This way the customer will have a first chance to try out, our paid product quality. The low price point, together with the trust and authority we have already build, will help in order to have a big conversion rate here.

Again during this step our first priority is not to earn a lot of money. The top priority here is to prove to these people that your product is good, and they did a good thing when they trusted you with their money.

It takes a big commitment to make someone trust you with his money and you should be able to remove as much friction as possible between these transactions.

Some good examples of a 1st level paid offer would be:

  • ebooks with compact, solid information on health, fitness, nutrition etc
  • a basic level training program, with predefined lessons
  • access to a variety of resources you have gathered (websites, meal templates, fitness calculators etc)
  • a basic level webinar with more advanced information

Again, the more value you offer the more people will want to buy from you. Keep in mind that this content although valuable, it will have to be made just once. You cannot afford to spend time improving/adding on this on a regular basis. It should be a “set and forget” type of content with only occasional improvements.

Step #3: Convert some of them even further with an upsell

As the funnel narrows down, we pass from scale to magnitude. The point here is to sell an even bigger product, service, etc. probably to a few more loyal customers.

After their initial purchase and assuming everything went well, 1st level customers who are happy with your product, will want to buy more advanced products from you. Since they were happy, got value and noticed some actual good results from their first purchase, they want to take it a step further and try more.

Most of the times since this product will be more exclusive and expensive, not every 1st level customer will convert to 2nd level customer. Again, this conversion rate highly depends on the level of trust, authority and value you have already built.

This product will be more expensive, something between the range of 47$ to 497$, depending on your niche and the kind of product or service you sell. Here you can introduce some subscription based services as well.

Some great examples would be:

  • an exclusive high level course with advanced lessons
  • a subscription based forum that customers will be able to find you and ask questions
  • a private facebook group with people exchanging value, opinions, resources between them
  • advanced, one to many coaching sessions where you coach 5-10 people online

All these streams can either be on a subscription basis (each month all the customers pay a fee to be able to continue using these resources) or a one time fee.

Both have some advantages and disadvantages. On a subscription level, people are usually afraid to commit to pay you money every month. That is why you should always include a cancel subscription policy, which will be clear and well documented. You need to make it as much risk free as possible for them.

Moreover, subscription based services need to be updated with new content frequently in order for your customers to evaluate it as a sound source to pay you money each month.

On the other hand, subscription level services, let you calculate more accurately your income stream (compared to a one off purchase). You will be able to make more accurate projections and possibly make a better investment plan.

Which way you will choose, depends highly on the effort you want to put and the value you will eventually offer. Both ways will work just fine though.

As a personal opinion, I would try to minimize my active involvement in this step, but without eliminating it completely.

Step #4: Convert some of them even further with high magnitude upsells

Now it’s time for the heavy guns.

Because this step will have the less conversions of all, we need to go magnitude here. Possibly not many customers will buy this, so this product needs to be expensive.

This will of course be the highest value possible we can offer. This will have our active time involved. Everything about personal branding comes down to this. Here, you will be able to leverage your authority and fame in order to achieve the highest hourly rates possible.


This rate is heavily dependent on your value as an entrepreneur, your skill-set, and the results you can bring to the table. You can charge anything from 200$ to a few thousands per hour, depending on who you are.

There are many personal fitness coaches, charging from 200$ per hour, to business, social skills, Internet marketing coaches etc., who charge thousands of dollars for their services.

Some of the things you can do here are:


Short story long. In order to sell something to someone, whether this is a pencil, a car or your love, you first need to make this someone trust you. What you sell, will need to help them solve a problem or improve an aspect of their life. In other words, to have value for them.

After this initial purchase, it will be easier to sell something again, because of the already established trust. You may be able to ask for more from now on, but consequently, fewer people will want to buy. That is not a problem though, because as scale goes down, magnitude goes up.

It goes from [more customers / smaller transactions] > [less customers / bigger transactions]

Moving from broad to narrow, we offer more value and more of our time to fewer people.

One last major point: As stated before, do not ever forget that this model works on EVERYTHING. The reason, once more, is that it works because it is based on human nature (the best guarantee there is). No deal can be made with no trust/authority. The more trust and authority you have, the more you can ask from someone. But in the same time, the more you will be willing to give to them as well.

Think about it, what makes it so perfect, is that it applies in every case.

As usually if you enjoyed this article, I would really appreciate it if you could like or share, and teach some other people as well what a marketing funnel is.