What is a Sales Funnel? (Offer Creation and Value Ladder Included)

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Now it's time to explain what a funnel is. Funnels are an important part of ClickFunnels and need to be explained before we go further in this ClickFunnels guide. Before I can tell you what a funnel is, I want to explain what a value ladder is. No, it's not so complicated as it seems. 


The value ladder

A value ladder is a system that you are recommended to have in your business. You can see the picture below that shows you the principle for this. 

value ladder

If you want to grow you probably need more new customers. So how do you get new customers? The best option is usually not to sell them something expensive. The reason is that they don't know you or they don't trust you. They don't know if you can deliver the value you are promising. Another thing is that they might not even know they need that service.

So the best option is to sell them something cheap, then your audience don't need to take a big risk when they are buying from you. Most people can pay $47, but they are more hesitant to give you $997. This product should be priced so low that it barely makes you money, but you get a customer, or you get a lead so you can contact them. Now you want to deliver value to them and show them that they can trust you. This is called a front end offer.

You can also give them something for free as lead bait to lure your visitors to your business. The lead bait can be a report, a blueprint or something else that is easy to create.

So now you have a customer, and you deliver the value to them. Hopefully, your customer will soon trust you and be happy with the product they have received. Now you can introduce them to the next product you have that is natural for them to buy. This will be in the middle of the value ladder and is a product with a higher price where you deliver more value to your customer. This is the product that will make you money.

Then you need to work with a backend offer. This is a product that is high priced and will earn you more money but from fewer customers.

As long you are overdelivering on every step, it's natural that the customer is happy and wants the next product you have for them.

If you want more information about the value ladder, I recommend you to read more in Dotcom Secrets

What are a sales funnel and how does it work

I think I first I want to define what a website are. A website is where you have a front page with a lot of pages linked from this front page. The different pages can be linked together or out to other websites. You have a lot of information and many exit points away from your site.

Funnels are when you lead people through a step by step process where the visitor has only a few choices, usually yes or no to your offer. This way the visitor can't be distracted, confused or maybe bored so they leave.

This process can be a sales funnel where you have a description and pictures of the product you are selling. If the potential customer chooses to buy and give you their credit card information, then they will be taken to a new page where the customer has presented a new offer that is adding value to their newly bought product. With one click the new product is purchased, or the customer can choose no and is perhaps taken to another offer.

I can tell you a quick story to illustrate this process. Let's say you need a new pair of pants. You walk into a store, and a helpful seller is approaching you and ask you that if there is something you need help with. You respond that you want a new pair of pants.

The seller asks some questions and gives you a couple of pants for you to try. After some tries, you tell him that you like one of them and asks for the price. You are lucky, there is a sale on those particular pants, and you receive a 20% discount! What a bargain!

Then the seller asks if you also need a belt to your new pants, they also have a sale on belts this weekend. You accept the offer since you also could use a new belt.

After that, the seller asks if you also need a shirt. You have some shirts and also don't use them often, so you decide not to order more.

You walk out from that store happy with new pants and a new belt. The store is happy since they made a sale and they also made another sale that you didn't think about in the beginning. They made more money from you, you received more products that you needed, and you got them on sale.

So what happened here? You just went through a sale process, and I'm sure you have experienced something similar.

You can have a funnel for each step in your value ladder, or your funnel can be your value ladder. This is probably the easiest to start with, and you can expand later as you see it fit.

So a short explanation is a funnel is a process a business wants to guide you through. This can be a sales funnel where you are offered several products. A funnel can both be online or offline, so this is not only for the online world.

The process can also be a more simple one with a page where you are collecting emails and a thank you page after you receive the email.

How to create an offer

This is a ClickFunnels guide and not an offer guide, but I want to mention how you can design your offers since this is important when creating funnels.

You want your first offer to be a lead magnet where you are giving away something for free. This can be a cheat sheet, blueprint or something similar.

The first paid step on your value ladder can be a do it yourself offer.
The second paid step can be done for you offer.
And the last step can be a done with you offer.

Then you need to set your price. To find the correct cost is something you also want to test. A rule of thumb is:

  • Your first offer is priced X, and let's say 100% of your customers accept this offer.
  • The second offer is priced 10X, and 10% of your customers accept this offer.
  • The third and last offer is priced 100X, and 1% of your customers accept this offer.

X can be everything below $100. $7, $17, $47 and $97 is popular price points. The higher the price, the more value you need to deliver to your customers. Also, remember you want to overdeliver. That way your customer wants to order more from you because they know you will provide massive value. 

The different funnels

I will go through the different types of funnels here and where they belong in the value ladder. There are more funnels type out there, so this is not a complete funnel guide, but I will explain the most used funnels. 

Russell Brunson's Main Funnels

I will begin with Russell Brunson's main funnels from DotCom Secrets. This is a summary, and you will find both more details in Russell Brunson's book DotCom Secrets. 

The frontend funnels

First I will go through the funnels at the beginning of your value ladder. This is funnels where you want to get email subscribers and customers so you can do more marketing to them.

The tripwire funnel, also named Cart Funnel

This funnel is great to use to collect leads. You are putting something cheap as the first step of your funnel. Then you are using upsells and downsells where you are offering something more expensive.

Some pro tips are to offer something for free, but the customer needs to pay for shipping and handling. For this to work you need to send something physical, what's good with physical products is that they are easier to sell. The perceived value is much higher than digital products.

Another pro tip is to use a 2-step order form. So on the first step, you are asking for the shipping information and email. That way you are collecting email addresses. So when they land on step two, they need to enter the payment information. Since they already have filled in the form, they are more likely to fill out the next one. If you had everything on the same page, the step would be bigger, and they need to invest more time to fill out your form. You will not receive their email address and a possible sale in the future if they choose to leave. 

cart funnel

Cart funnel from DotCom Secrets

Self-Liquidating Offer Funnel

This is a funnel that in many ways is similar to the cart funnel. The goal here is to collect email addresses with paid traffic and get your cost back.

Hopefully, you will earn a little money, but the goal is to get leads and customers for free. The first offer is usually a lead magnet.

Hopefully, you manage to do it with your first offer, but an offer bump and an upsell is usually needed to get your advertising cost back.

When this is done, you can promote more to your customers with email marketing and receive a profit without advertising cost. When you have managed to make this funnel successful, you can scale your business very fast. This is the most important funnel to create, so you don't need to be reliable on free traffic that is hard to create and even harder to scale.

This is the funnel you will learn to use in One Funnel Away Challenge.

slo funnel

Self Liquidating Offer Funnel (SLO) from DotCom Secrets

The Continuity funnel

A continuity program is a great offer that everyone should try to create. A continuity program gives you a reliable income each month and will pay your bills. If you do this correctly, your customer will also give you all the information you need so you can create your continuity program after your customers desire. That way you hopefully will create something that gives you money for years each month.

Other products with one payment are important, but they are not a stable income like a continuity program is.

Since most people don't stay forever in a continuity program, a pro tip is to offer a yearly membership at a discount. Let's say the average member stay for 5 months, offer an annual membership to the price of 7 months. If you receive too many yearly memberships, increase the price. If you receive too few, lower the price. The correct amount is something you need to decide, but you want to have a monthly income that pays your bills. 

Middle of the value ladder

If you have done the frontend funnel, it's time to create a funnel for the middle of the value ladder. Stephen Larsen that have worked at ClickFunnels recommend you to build this step first and then break it up and create the frontend funnel. I understand his process, but I find it much harder for a beginner. Especially if this is a side hustle while working, your time is more limited. 

Sales webinar funnels or Presentation funnel

Webinars or presentations as its also named is a popular method to sell your product. This is usually a product that cost a little money. The product can cost from $200 to $5000.

The webinar funnel is usually a registration page and a confirmation page. After they have registered for your webinar, you need to create more interest by sending an email and explain to people what a great experience they will receive when they join. There are many methods to do this, but again I will recommend Russell Brunson's method.

This webinar can be done manually or automatically. Russell highly recommends you to do the webinar weekly for one year before you automate the webinar. The reason is that if you follow Russell method, you will sell more when you have done it multiple times and perfected your presentation. Then you can automate the sequence and do replays only.

You can get more information at the free copy of DotCom Secrets that will explain how to do this.

If you really want to go all in on this, you can order the 10X Secrets where Russell Brunson shows you how and why he structured his live presentation where he sold for $3million during a 90 min presentation at 10X Growth Conference run by Grant Cardone. This is for stage presenting, but will also work for online webinars.

Lately, Russell has renamed this funnel to presentation funnel. 

Invisible Funnel webinar

This is a funnel where you are doing all the teaching in the webinar, or presentation. This presentation can be 2 to 5 hours long, and you set your price and collect payment information from all the attendees before they join.

One sales page and before you start your presentation, you need to tell them how this presentation is working. If they are not satisfied or don't think this presentation is worth the money, they can email you during the day, and you will stop the payment. That way they don't need to pay if they are not satisfied.

This is a method that has worked for a lot of people and what is a genius with this funnel, is that you remove all the risk from the attendees. So if you deliver what you promise, most people will be satisfied and will give you the money. Remember you need to provide value and you should overdeliver to keep most of the money.

After the training, you can send them to an application funnel if they want to work with you.

The experience from Russell Brunson is that they get more people to their webinars, and only a few people want to stop the payment. So overall, they make more money.

The Product launch Funnel

A product launch funnel is a popular method, and I have seen it used several times in different variations. This is a sales webinar delivered during a 4 day period, where you are giving training away for free. During the training, you will also do some soft selling of what you are promoting where the final part is where the hard selling is done. This funnel works best on an audience that knows you or is promoted by affiliates that recommend it to their audience.

This funnel is used to launch a new product, but I have also seen it ran automatically to those who optin to the funnel. Since you need to create 4 videos, this is some work, so I advise you to use it when you have some experience.

  • Day 1: You send an email where you are linking to a video you have made. The video will create some excitement about the training and shows some teasers on how this is done.
  • Day 2: You send a new email with a link to an email where you walk through the process with your audience.
  • Day 3: Now you send an email where you link to a video where you explain the benefits from the training or method after they receive what you will sell them.
  • Day 4: New email with a link to a video. Now you do a summary of what you have taught them and what you have to offer them. This is the selling part of the product launch.

The backend funnel

The backend offers is offers where you are charging $10.000 or more for. The price makes it hard to sell on conventional methods like sales funnels and webinars. The best approach is with the phone, and you have given them value before so they know you and trust you. 

High ticket three-step application funnel or Phone Funnel as Russell named it lately

This is an advanced funnel that requires 2 salespeople. This is explained very good in DotCom Secret and is for experienced people that probably will not google this subject and read my blog. I just want to mention it since this funnel is described in DotCom Secret. 

Richard Walker

I'm a father of three children who are very important to me. The 9 to 5 world with small children can be tiresome and I want to break free.

So join me on my path to online income where I find the best way so you can do the same!

Richard Walker

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