An Introduction to Your Profit Funnel

Tim Whiston

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For purposes of this article, I’d like to you to look at your entire Internet marketing effort as one unified process. Everything you do should be geared towards building your personal profit funnel.

This profit funnel will begin with your opt-in mailing list, and will allow you to introduce prospects to different ‘levels’ of products and services in a very fluid manner. Have a look at the diagram found here: gif

And then read the more detailed explanation below.

Free Front End:

Your free front end is the very top of your profit funnel. In essence, this is the incentive you use to compel a prospect to join your opt-in mailing list.

Maybe you are giving away a free e-book, a free e-zine subscription, a free membership to your software download site, or whatever. The point is you offer something attractive at no cost in order to pull as many people as possible into your opt-in mailing list.

Naturally, once you have these people on a mailing list, you can begin to cultivate a relationship with them, and introduce them to other offers that represent further levels of your funnel.

As you can see in the profit funnel illustration, your free front end is the most populated level of your funnel. Clearly, many people will be interested in getting something for nothing.

$27 Upsell Product:

Beyond your free front end, you could introduce your prospects to a $27 e-book. This could be an info product that you created, or a book that you have acquired resell rights to.

A very effective technique is to present the offer for you’re first upsell item right away on the confirmation page your prospects are taken to once they complete the opt-in process. This method is widely used, and for good reason; it works.

As you can see from the profit funnel diagram, not everyone who enters your free front-end will pay for your $27 product. No worries. As long as you continually bring people into the top of your funnel, you will have an ongoing opportunity to profit from the percentage of prospects who do buy into your upsell.

$67 Product/Service:

The next logical step in the profit funnel model is to introduce another product or service at a slightly increased price point. Examples of such an offer include an improved e-book package, a nice piece of software, or some type of special membership.

Again notice the profit funnel diagram.

As you can see, fewer prospects will purchase this more expensive product. However, it will also take far fewer sales at the higher price to achieve greater profits.

$97 Product/Service:

By now, I’m sure you are getting the idea. The next product or service you introduce will be a higher end offer, such as a multi-media presentation, a very comprehensive suite of digital products, an improved membership package, etc.

Once again, the number of prospects who move on to this level will be smaller than the number of buyers in the previous level. And once again, the higher price point will amount to equal or (more likely) improved profits despite the smaller number of sales.

$197 Product/Service:

Onward and upward we go. A series of teleconferences, an enormous collection of valuable downloads, ongoing consultation, and a bundle of special memberships are just a few examples of products and services that could be packaged at $197, $297, $397, or more.

You could continue to introduce new products at higher price points for as long as you are able to keep bringing new people into your funnel. Each new level will result in fewer sales, but as mentioned previously, your profits will likely increase due to the higher price of each offer.

This is just an example of how a profit funnel might be structured. Take the basic idea and put your own spin on it. The important thing is that you understand the concept of attracting people to you with a free offer, then following up on that free introduction with a well organized suite of upsell offers.

I’d like to emphasize the importance of acquiring or creating your very own line of products and services. Affiliate programs are great, but I strongly recommend selling products that you own as a primary means of generating revenue. You can build your own membership site (or pay a pro to do it for you), write your own e-book, hire a programmer to create a piece of software for you, or purchase resell/private label rights to digital products someone else has created.

Let’s face it, being an entrepreneur is largely about being in control and having more freedom. You just can’t experience this fully unless you have your own products and services.

When you have your own product line or service program, you can set your own price and change this as needed. You can run specials, create bundles, trade out with other product owners, and leverage your goods in a variety of other ways.

You also don’t have to wait for an affiliate program manager to pay you. In fact, you could set up an affiliate program of your own and have people promoting your products!

So if you don’t already have at least one product or service of your own, get to the drawing board and start working out your plans to launch one as soon as possible. Program ownership is often what separates the small timers form the big hitters in this business.

Tim Whiston is a full-time entrepreneur and Internet marketer. He provides design and marketing services, and has published a number of popular e-books. Check out his Internet Marketing resource center to learn more.


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