Using a product and marketing funnel is a great way to grow your business and enhance profitability. Tracey Lawton explains what it is, and why it's still very much alive and kicking.
First off let me explain what I mean by the Product and Marketing Funnel, and then I'll share with you my thoughts on this particular business model.
Building your solo service business using the multiple streams of income model means that you are not only working one-on-one with your clients but you are also developing additional 'streams' of income, i.e. other revenue lines.
The problem with the one-on-one model (and this is the traditional business model that most service professionals work to) is that you are very limited in the amount of money you can earn because you only have so many hours in the day to work, i.e. you are trading time for dollars! With this particular model there are only so many ways to increase your income:
- Increase your fees
- Work with more clients
- Increase your fees and work with more clients
However, there is a much better way to increase your income and WORK LESS, using the multiple streams of income model. This consists of working one-on-one with clients (working with fewer clients and less billable hours) but with the addition of leveraging your time and creating passive income products.
By putting all these three types of income generation activities together into one solo service business you are creating a multiple streams of income business, and in order for this business model to work you have to structure it in a specific way... and this is where the Product and Marketing Funnel comes in.
Now, I have heard many people try and put their own spin on this model by turning it upside down, twisting it around, calling it a different name, i.e. a Profit Pyramid or a Money Path, and even saying that the Product and Marketing Funnel concept is outdated.
However, I disagree because it doesn't matter what you call it or how you present it the concept is still the same - you are creating a path for your clients to follow; in other words as your clients grow and progress so they move along to the next stage in your business where you can help them further.
The Product and Marketing Funnel is so called because if you imagine a funnel that is wide at the top and narrows as it goes further down, then as prospects enter your funnel at the very widest part via your free taste, they work their way through your services. Then as the funnel gets narrow, i.e. your high ticket products/services, it's only a very small number of your prospects that will actually buy your highest-ticket product; therefore you can expect to see LOTS of prospects at the very top of the funnel (the widest part) and a smaller number of prospects when they reach the highest level (the narrowest part).
This is the nature of business - it's how it works - regardless of whether you call it a Product and Marketing Funnel or something else! You will get LOTS of people at your lower entry points but only a very small percentage of people will invest with you at your most expensive level.
So, given that you now know that a Product and Marketing Funnel is nothing more than a planning tool to create a clear path for your clients to follow, how are you going to structure your business?
Ideally you want to offer three different levels of support and I like to refer to these as:
- Low (free taste or entry level product)
- Medium (group coaching program or private strategy session)
- High (private one-on-one coaching/training/consulting)
(See, nothing complicated with that!) Within these three different levels you will offer products and programs that meet the needs of your clients at each particular level. And as clients work through your Funnel they'll get more direct access to you but at a higher price point.
This is how the multiple streams of income business works - it allows you to serve many more clients than you could if you were working with them just one-on-one, and it also leverages your time, and creates passive income. A great business combination!
So, keep in mind that your Product and Marketing Funnel, or however you prefer to refer to it, is nothing more than a planning tool for your business.
- General Marketing