The Science Behind the Sales Funnel…

When customers buy your product or service, businesses have them entered into a “Sales Funnel” or “Customer Retention Path,” where they receive regular mailings or e-mails promoting the backend products. I’ve studied sales funnels/customer retention paths for years, and there is a science to them. They all involve a lot of testing, and they take time to implement. But once they are fine-tuned, they create HUGE customer lifetime value.

That lifetime value often makes the time and effort it takes to set up a Customer Retention Path more than worth it.

I have a number of different clients who sell introductory courses that teach how to use a particular investment technique. The back-end usually consists of some kind of continued subscription to a website or newsletter that provides the information needed to implement the program. Then, there might be various video programs, advanced course modules, advisory services, coaching, or even live seminars that are available for purchase.

A Successful Customer Retention Path

In order to create a successful customer retention path, you need to know what products to offer, what order to offer them in, and what price points to use. It takes dedicated trial and error to get this knowledge, but a well-designed sales funnel can completely transform the nature of your business.

The best way I’ve found to put together a sales funnel is to start with your lead product. What is the first item that most people will buy from you?
Then, figure out what product or service you offer that will complement that product. Outline the next 3 or 4 or 5 products or services that are congruent with the initial product your customer buys from you. Next, try mailing (or emailing) a sales piece out for each product or service. You’ll want to mail them a week to 10 days apart.

This will give you your initial sales funnel. Once you implement it, it will take time to read the results and determine what areas of the sales funnel are working well and what areas are not. It could take up to six months to track this.

If you see that the first offer and fourth offer are working well, then keep mailing them. If you see that the second, third, and fifth offers are performing poorly, try replacing them with something else or try moving them to a different position in the sequence.

In addition to planning sequential mailings for your back-end sales funnel, you can also use the sequential mailing approach for a single product. For example, the clients I just mentioned often put on live seminars. These can be expensive and may involve making a trip to another city. This requires a little more selling to get buyers to respond.

So in advance of the event, they might send out an invitation with a long letter. Then 10 days later, they might send a postcard with a reminder that the seminar is filling up fast and if prospects don’t want to miss out, they should call right away. Then another week or two later, they might send out a third “last chance” letter.

Sequential Mailings to “Cold Prospects”

You can send sequential mailings to “cold” lists too. These are rented or purchased names of people who don’t know you, and perhaps have never even heard of you. In this case, you want to get a feel for the kind of response you get to your first mailing before sending out subsequent mailings. If you don’t get ANY response on your first mailing, don’t bother sending the rest of the sequence. You don’t want to spend good money on bad names.

Your mailings will likely get more notice with sequential mailings that vary the headlines and the format so people don’t think they’ve already seen the piece and know what’s in it. Even just printing a “Last Chance” stamp above the headline will help get attention. You want to try to get the prospect’s attention by using something different in each mailing. IF you just send the same old sales piece, then they are less likely to respond since they’ve already seen it before.

Never Let Up

You must keep reaching out to your customers and best prospects, reminding them that you exist and asking for their orders. This is one of the best ways to expand your business and customer base. Be prepared to keep dipping into the well, try out new offers and sales copy, and measure the response.

Your direct mail or email program is a living thing, and the success of your business depends on how well it does. Keep it healthy and growing, and you will enjoy a flood of orders for years to come.

Craig Simpson

Craig Simpson has managed thousands of direct mail campaigns and grossed hundreds of millions in revenue for his clients over the past 15 years. Simpson is the owner of Simpson Direct Inc., a Grants Pass, Oregon-based direct marketing firm,…

Read more