Sales Funnel:

Setting Up an Online Sales Process

By James Atkinson, LLB

Sales Funnel - Setting Up an Online Sales Process: Before you begin to market you need to have your sales funnel or sales process organized.

By sales process I mean everything you do to affect a SALE – as opposed to say educative content building and social networking. Having said that, you must of course weave and interlace your educative and social content into your sales funnel – so, at another level everything really is ‘sales’ process.

What The Back End Means

There are no strict criteria for the meaning of front and back end. Different marketers have quite varying views as to what front and back end sales process means.

A front end simply means, at least in my terminology, the first online product you sell to your prospect. Unless you have a super-hot product that you personally own and can earn very high profits, you will need a 'backend' of products.

For example, some online businesses have created excellent software that they sell year after year. With software, after the initial cost of production, you can sell zillions of copies with little or no further production costs. Your only major costs are marketing, customer and business management.

So, in effect there is only ONE product that is marketed and sold – the front end.

In any event, even if you have a super-hot product, I’d still recommend backend products to buttress profits. If you have a lower-priced product with a price ranging from say $10 - $200, you certainly will need a backend.

This is because the cost of customer acquisition (especially via Google Adwords) is so high that you practically can't make money on the first sale. Thus, it’s quite common amongst online marketers to actually LOSE money on the first sale – in the expectation that eventually there is plenty of money to be made with a lot of subsequent sales.

After the first sale – say for a nominal product under $20 - the customer is on the seller’s email marketing list. All subsequent sales are made via email marketing.

I am not trying to be prescriptive about this – everything depends upon your business model and “making the numbers work”. But generally, if you want to survive financially, lower end priced products require a backend.

Most online direct marketers or affiliates who only market other people’s products certainly need a backend to survive.

When a prospect reads your sales letter and BUYs that prospect then becomes a CUSTOMER. In a sense, you’ve serviced your prospects’ needs and requirements and they then reciprocate that attention by buying something from you.

Thus, your chosen back end is important to the reciprocal relationship you have with your prospect / customer.

After the first sale your immediate goal is to maintain and strengthen your relationship. Customer lifetime value is the term used to describe the revenue you generate from customers over the period when they remain active buyers.

When a customer is created you want to:

• Make repeat sales so as to maximize customer lifetime value
   
• Keep customers buying from you. To build loyalty, continue to educate, liaise socially, and position yourself at the top of your customers’ minds.
   
• Ensure competitors don’t lure your customers away.

Making repeat sales from your customers is a crucial aspect of online business survival and this is often referred to as the back end. Can a shop that sells only one item survive? No, of course not!

Unless your product is an exceptionally high value item, you really need to have more than ONE source of revenue in your market and product offerings. Surprisingly, many eMarketers and affiliates only have one product that they market.

One product at a time – endlessly failing!

They’ll do a little research on Clickbank or other affiliate portal, get a few keywords and launch off into a frenzied marketing campaign. This process simply does not work.

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