My approach to business is simple at its core, I want to create funnels. A funnel is wide at the top and narrows as you move down the funnel. This is how I view every business, is it moving people down the funnel?
At the top of the funnel people are just being introduced to your business, they know little to nothing about you, and there is no relationship. As you begin to build that relationship by consistently adding value they slowly start to move down the funnel. They go from consuming free content to being paying customers to being raving fans.
As your audience moves down the funnel there relationship with you grows and their life time value as a customer grows. This is how you build a powerful business. It’s now common knowledge that selling to a new customer is significantly harder than selling to an existing customer. That’s why our ultimate focus is to increase your customer’s lifetime value. Yes, we want to keep filling the new customer bucket but spend more time developing and deepening your relationship with your existing ones.
That is the main tenant of the Funnel Philosophy, increase you relationship with your audience and increase their lifetime value. You do this by developing seven different levels of products. I’ll go through each below but I want you to remember that this is the overall business structure. It’s likely (in fact highly encouraged) that there will be several mini funnels built within this overall structure. For example, when you launch your medium priced product you might do so by giving away free content, using an email opt-in offer, and then asking for the sale. Start approaching everything in your business with the Funnel Philosophy and you will soon start maximizing your business.
The podcast is the perfect first level of the funnel. This is exactly why I love podcasts. They are a very low risk for people to listen to. Your audience doesn’t need to “pay” in any way, not even an email, to hear your content.
A podcast is also the easiest to consume medium. It requires no screen time, can travel with them, and can be listened to while doing other activities. Plus podcast give your listeners a peak into who you actually are that blog posts or other written content just can’t.
Your goal is to move people down the funnel. Your best clients are the ones who have moved down the funnel the furthest and have even brought others with them. However, it’s rare that people will move through your funnel without your offering them the option to.
Two big mistakes I see business owners make is 1) not asking people to move down their funnel and 2) having too big of ask before the relationship is established. The latter is akin to asking a girl to marry you on the first date. That’s the best way to ensure their won’t be a second.
Your first ask should be to subscribe to an email list. I am a huge advocate for building a strong email list. If someone is willing to “pay you” with their email address you know they are a more valuable client. They are ready and willing to move the relationship forward.
The reason the email list needs to be your first real ask is because it is your most valuable asset. When set up right and email list is potentially even more valuable than your podcast to a business. The email list is where sales are made. The podcast is how you develop the relationship and inform the client but it’s the email list that walks them through the sales process.
Also, don’t fall into the trap that I see with many people’s email list. The trap of only sending out broadcast emails. If the only email you send out is a weekly email letting people know about the latest podcast or blog post, you are heading in the right direction, many don’t even communicate with their lists at all, but you are leaving a lot on the table. You NEED to set up a good autoresponder sequence.
The purpose of your main autoresponder sequence should be to catch people up on who you are, what you offer, and how you can help them. It takes time to develop this first introductory autoresponder. You will need to sit down and think about what a complete beginner needs to know and the best way to walk them through the process. But it’s a do it once, use it forever mindset. Once you complete that autoresponder sequence it will pay off for you over and over again.
LOW PRICE POINT
Are you ready to start making some money? You are currently adding value to your audience on a regular basis, you have a slowly growing email list. Now, it’s time to get some customers. This is the biggest, most important step in your funnel: converting an audience that is consuming your free content to paying for content. It’s long been known that getting new customers is five times more expensive than marketing to current clients.
Sticking with The Funnel Philosophy, will make this transition as smooth as possible. Your next step in the funnel is to create a low priced product. The point of this product is not to retire you early, in fact it’s very likely you won’t make much money off this, if you do awesome, but that’s not the objective of this product. Your goals is to start creating a list of buyers. You want to know who finds your content valuable enough to pull out their wallets and make a purchase.
This is key. It sets you up for success down the road. Think of this product like that pack of gum in the checkout isle. It needs to be a no brainer for people. Delivering great value at a price that requires very little consideration. The actual price point will depend on your industry and brand but think $.99 – $20 as a good starting spot.
LOW PRICED SUBSCRIPTION
Now, your audience is starting to slowly move down the funnel it’s time to create the next level product for them, a low priced subscription service.
Recurring revenue is the holy gail of entrepreneurdom. Having a predictable stream of revenue that comes in month after month without extra work of acquiring new clients is extremely valuable in building a solid business foundation.
For this level of the funnel, look to create a monthly subscription that is low priced, again this depends on your industry but likely a $5 to $25 range is a good one to shoot for. Ideally, this is a more passive form of income for you. Meaning you are somehow already creating the content or it’s a slight variation from content you are already creating. For example, if you are a writer that produces books on a regular basis you could create a subscription program where your raving fans can get your books for free before you release them on Amazon. For interview podcasters, when you are creating your normal show record a second interview right away that goes more in-depth or is more tactically focused and make it available on a special membership page.
The objective with this level is to provide you with that stable foundation. Hopefully very quickly this program will be able to cover many of your expenses and because it’s recurring you can be confident that you have a certain amount of money coming in. This confidence is important. It will free you up to work on the important projects that could move the needle significantly for you versus just trying to make sure you come up with something to pay the electric bill.
MEDIUM PRICE PRODUCT
Now you have some loyal followers. Now you are growing a real business in a smart way. Now it’s time to create some real income. Now it’s time for a medium priced product.
A medium priced product is about $100 – $997, again varying greatly by industry. This product generally include a vast amount of how-to information. It is usually a multi-media course, perhaps a workbook with a handful of short videos. It should be a place for people who want some guidance, but is mostly self study. I would also recommend that, once you create the content, it requires very little time involvement on your part. Ideally it can be delivered electronically while you sleep, and your client can complete it without your involvement at all. The main function of this level is to create a passive form of income for you. That’s not to say you can “passively” (read lazily) put this product together. Passive and lazy unfortunately seem to be linked in many peoples minds. They are not one in the same. If your product is not high quality and high value to your customers, it will not sell. It does not deserve to sell. Passive in this case refers to your involvement in the delivery of the product.
HIGH PRICED PRODUCT
Now it’s time to bring in some real money. It’s time to create a high priced, high value product.
For many this will be an online course. Something that solves a major problem for the audience you’ve built. This needs to be done in a very professional, high value way. If you are going to be charging $1,000 to $5,000 or higher, you need to be able to deliver a return on that investment of 5 to 10 times what your clients are paying. That’s no small order, so before you start creating your first high priced product be sure you sit down and actually evaluate if you can deliver on this promise.
This product will likely not be a passive one like the medium priced product. It will require some time on your part, and to get the most out of it you should create a marketing launch (for more information on launches check out Jeff Walker’s book Launch). This is not a set it and forget it type of thing.
By the time you get to this point in the Funnel Philosophy you should already have a loyal, dedicated tribe of raving fans but you will still have to show them the value this product brings to their life, and that you are the right person to deliver it.
As a general rule, I like to follow the mindset of conducting one big launch per quarter. This allows you to keep adding massive amounts of value to your audience without constantly asking for the sale. Continue to produce high value weekly podcasts, and then for one or two weeks each quarter go through a Jeff Walker style product launch.
Now, you’ve drastically increase your income, and with well executed product launches you will have some big paydays. In our last section of the Funnel we will take a look at how to truly maximize your income.
HIGH PRICED SUBSCRIPTION
This is like adding rocket fuel to your business. We talked earlier this the Funnel Philosophy about the of the recurring income from low priced subscriptions, now image the impact of a $1,000 plus per month subscription!
Make no mistake, in order to offer a high priced subscription it’s going to take a lot of time and energy on your part. You will need to deliver amazing value. In fact, the most popular way I see people conducting high priced subscriptions is through live mastermind groups. The value of getting a group of high level business owner in the same room to focus on helping each other solves problems is amazing. Often worth 10-20 times the price of the monthly subscription cost.
This is a funnel level that most business owner do not get to. You shouldn’t attempt it until you know you can deliver an outstanding return for all your clients. If you can’t deliver on that promise you will do an incredible amount of damage to your brand and your reputation, so proceed with caution.
Once, you get to this level of the Funnel Philosophy the sky’s the limit. You are now maximizing your impact and your income.
If you are interested in learning more about the Funnel Philosophy and how it relates to podcasting check out my Podcasting For Profits course
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