Do We Really Need A Product Funnel?
The product funnel is an invaluable tool for small business owners and self-employed professionals. The intention of the funnel is to move mildly interested prospects gradually down to products and services of incrementally higher price points.
Funnels in general are wide at the top, narrow at the bottom and the same holds true for the business product funnel. The product funnel is generally constructed as follows: At the top – the widest part – are your free offerings to which you have attached a perceived value such as $27 for an informative report.
The goal is to bring in as many people as possible at the top who will become acquainted with you.
Then through your keep-in-touch strategies like a Tip of the Week email, your prospects will grow to know, like and trust you and hopefully move down through the next parts of the funnel.
The range of your price points after the free level will depend on what you have to offer and the perceived value of your offerings.
The following examples will be based on a price point of $5,000 at the very bottom of the funnel. After the free offerings, as the funnel narrows, there will be offerings of lower price points. The next range could be from $10-$197. The products can be one-time purchase products, for example, a video on a specific subject or an Ebook. Or, there can be continuity products in this price range such as monthly membership programs. For example, many “Silver Level” membership programs are priced at $47/month.
The only thing to remember here is to not price this level so high that it dissuades prospects from moving on down into the funnel. Then as the funnel narrows even more, there are the medium priced items. The prices here could range from $197-$997. On this level could be a 90-Day coaching program or a Home Study Course.
At the very narrowest part of the funnel – with price points from $1,000 to $5,000 – could be offerings such as a day-long consultation with you for $5,000, a live multi-day event or a 6-month coaching program. Of course, depending on your expertise and the perceived value of your work, you could charge much, much more.
Not everyone who comes into the top of your funnel will stay on with you and buy more of what you have to offer, but the leads become more and more qualified as you descend into the funnel. A percentage of these customers will continue on into the narrow part of the funnel which is where you offer higher priced products and services.
Of course, not everyone will necessarily come in at the free or low price point. You may have people enter your funnel at your highest price point. There are also people who may wish to purchase much or all of what you have to offer at the same time. So, you might also want to offer all your products bundled together at a lower price point than the value of each individual product added together.
Determine what will be the no-cost ways to bring customers and clients into your funnel. Have at least two at the top of the funnel, no more than four. If possible, offer them in different media (e.g. audio or print) and think of different strategies for getting the word out. Examples of this may be: virally through your email signature with a link to your free offer; live at a talk you give or through a direct mail campaign such as postcards which will have a call-to-action and list your URL or toll-free number.
Don’t forget to assign them a perceived value. This is very important. Then look at creating lower price point products to get you started in the next level of your funnel. Remember not to jump from free to high-end.
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