How To Create A Sales Funnel That Actually Makes Money

Dan Kennedy famously said ‘whoever can spend the most money to acquire a customer wins.’ 

Stop and read that again if you have to, but this concept is the key to making money and growing your business.

Here’s a simple example to show this concept.

Let’s say you sell brooms, specifically the ones for inside the house.

You set up your website where sell the broom for $15, and after all expenses, you take home $10. (this is a fictional example, so don’t get caught up with shipping, blah blah blah)

To drive traffic to your website, you use Google Ads.

You immediately have success and you only spend $5 to get 1 sale… meaning you’re spending $5 to make $5 in profit… which is a 100% ROI

So for every $10 you spend ($5 in expenses & $5 in paid ads)... you make $15 in revenue. BOOM!

Life is good… nah, life is GREAT!

2 months later, Google does an update and now your ad spend goes from $5 per new customer to $20 per new customer.

Sound familiar?

Now you’re spending $25 total ($20+$5) to make $15 in revenue. Ruh-roh…

You’re not going to be in business very long when you’re losing money on each transaction. What are you going to do?

This is where a sales funnel takes your situation from a Zero to a Hero.

You realize… ‘hey, a dustpan would go great with this broom. Also, it’s good to have a 2nd broom… but one specifically for the outside.’

Your new sales funnel sells the broom initially, but sells the dustpan as an upsell… and sells the 2nd broom as a 2nd upsell. 

Let’s say the dustpan and 2nd broom are $20 each (cause they’re Louie Vitton branded, of course).

Now, this offer is well received and a lot of people add both the dustpan and 2nd broom.

Now your average cart value went from $15 per sale to $40 per sale… since not everyone buys everything all the time.

Did you see what happened? Your ad costs stayed the same at $25… but now you’re making $40 in revenue.

You’re now making $15 in profit per sale… which also is a 300% increase in ROI ($5 in profit to $15 in profit).

If you didn’t understand what just happened, or you’re not good at math and the numbers started flying at you like a bunch of bats leaving a bat cave… go through the example again.

This concept is the KEY to being able to spend more than your competitors.

It’s vital you understand this.

That’s why you see a lot of digital product sales funnels where the first core offer is something small… like free plus shipping… or $17… or $27.

Then you get to the first upsell and it’s $97. The 2nd upsell is $297. 

Even if only 5%-10% take the upsell offers, the revenue produces makes up for the losses on the first product. And of course, digital products don’t have any physical costs for fulfillment… so it’s all revenue… which is great.

‘Okay, great. I get it. How do I build a sales funnel for my business?’

So glad you asked…