Hey marshmallow!! If you dunk a tea bag into a cup of cold water, what happens? Nothing much. If you dunk a tea bag into a cup of hot water, what happens? You get a delicious drink.
Similarly, if you try to sell your super-expensive product or service to a cold lead, what happens? Nothing much. If you try to sell it to a hot Lead, let’s just say you could enjoy a cup of tea together to celebrate your done deal.
In the case you’re a bonehead and it’s not obvious to you, someone who already knows your business will be a much easier sale than someone who’s never heard of your business before.
But what if NO ONE has heard of your business before?
Then you have two options.
- Sell to cold leads while they’re cold
- Turn cold leads into warm leads and sell to them then.
In this tutorial, I tell you how each method works and which is better.
Selling to Cold Leads and Why It Sucks
If you’re a Marshmallow, your sales process involves selling to cold leads. You will give a business card to anyone within spitting distance. But you won’t stop there. You will then proceed to hawk and flog and pitch and pimp your product or service.
Don’t do this. Not because you’re a precious flower who is afraid to be spat on. But because – unless you’re selling something with mass-market appeal – it costs you too much time to sell to those who are not interested or not the right fit for your services.
This method is called cold calling. Cull it.
How to Turn Cold Leads Into Warm Leads
The alternative method to cold calling has two steps to it.
Step 2 is to sell your main product or service to whoever is in front of you. Sounds the same as cold calling, right?
That’s because most business owners are marshmallows. They jump ahead to step 2 and skip step 1.
What’s step 1?
Step 1 is an alternative offer that’s very easy for a cold lead to say yes to. Unlike your main product or service, it’s low priced and low risk. This allows you to distribute it through the media – online ads, newspaper and magazine ads, the radio or any other suitable media – instead of speaking to the cold leads personally. We’ll talk about media buying in a later tutorial in this series.
Other marketing coaches might describe this offer as a lead magnet, a tripwire or a front end. They are all the same thing.
Working the Front End Magic
This offer is the first impression of your business that a prospective customer gets. It’s also their first opportunity to spend money with you.
It must be low cost and be a low barrier to entry to your business. Don’t try to sell a product for $500 to someone who’s never heard of your business before. They’re not going to risk that kind of money with someone they’ve never met and don’t yet trust.
Instead, go with something less than $100 on the front end and make the bigger sales on the back end.
In the long run, you’ll have a variety of different front ends. Each one can target a different segment of the market, coming from a different angle, offering a solution to a different problem.
Front ends typically convert at 5%. That’s because all of your leads are slightly different – they have slightly different problems, different backgrounds, different personalities.
So, what should you do with the other 95% of your leads who don’t buy? Don’t just hammer them with the same offer. Instead, offer them a different front end.
They might prefer a different hook or angle. It might be the same product, but just position it differently, and you can turn a non-buyer into a buyer.
Don’t expect this offer to make you Rich. That’s not its purpose. Its purpose is to filter out a list of good leads who you know are serious, and also to get them familiar with your brand and what your business does.
Hey, now you’ve turned a bunch of cold leads into a list of Warm Leads. You’re a genius!
Warm Leads… Now What?
These, not the cold leads, are the ones you want to sell your main product or service to. They are serious, they’ve demonstrated they’re willing to spend money with you, and they’re educated about who you are and what you can do for them. They’ll be much easier sales than random people on the street, plus you have fewer people to talk to.
Also, this group is far less likely to feature those people who will end up causing you the biggest headaches and hassles. You know who I’m talking about!
Remember, step 2 is to make your main sale to these people. This is the product or service on which you make most of your money. To do this sale, you should contact these Warm Leads by phone or meet in person.
If you do this right, you will have a system that does all your lead generation for you. It sifts out the best leads from the useless ones – and gets them familiar with your brand and business – before you even speak to them! Did I mention you’re a genius?
Don’t Be a Marshmallow
Let’s say you’re selling a $1 book to your cold leads. The book explains who you are and what your business is about. Then, you sell your main product or service to the book buyers, who are now warm leads.
Surely it would do no harm to drop the $1 charge and make the book free? More warm leads, right?
Let me tell you what’ll probably happen. Sure, the volume of book customers will go up. Maybe even double. But how warm will those leads be? Will they even bother to read the free book and learn about your business?
In case you’re a bonehead and you can’t see the point being made, it’s this. You’ll likely find your close rate with those “warm” leads goes down!
When people pay, they take your business more seriously. People are more likely to spend money with you if they’ve spent money with you before. Even if it’s just a dollar.
Don’t be a marshmallow and go for quantity of leads over quality. Buyer leads are always better.
The point is, don’t underestimate how much difference as little as a $1 charge can make.
What goes into creating an effective front end to your market? The main three components are the copy, the design and the video. Assemble them together, put the offer in front of cold or warm traffic and you can start collecting cash.
Focus on the Story
The first job of creating an offer is writing compelling copy. This doesn’t necessarily need to be written copy. It might be a video script, a phone script or whatever medium you plan on making the offer through.
Regardless of the medium, always frame the copy around a story. Imagine you click an ad and it takes you to an offer. A video pops up and someone says, “From 1997 to 2017, 367,000 clients have trusted us…”
This copy isn’t framed around a story. It’s framed around numbers, and it will only make most people zone out.
On the other hand, imagine if the video started with, “Hi, my name is Mr. Marshmallow. 5 years ago, I was in a very difficult place financially. Now, I live in a very comfortable home…”
Most people will find the story-based copy far more engaging, because they can relate to it.
Hype or Social Proof?
The story gets people’s attention, and the next element in your copy needs to be something to keep them interested.
Ideally, you want to use social proof. Assemble as many testimonials and success stories as you can, of people who have bought the product and gotten impressive results with it, and showcase them in the offer.
If you don’t yet have any solid success stories, you may need to use hype. Dramatize the pain that the product will help your customer escape, or the gain that it will bring to them. Be careful, though, because using too much hype can reflect badly on your brand. Switch to social proof as soon as you have it.
Other Jobs to Be Done
The copy is the first job to be done, but it’s not the last.
Assuming you’ll be presenting your offer on a website, you will need effective design. This is not a high priority, but it does have to be done. You can outsource this to an expert designer who will make the website look attractive.
You’ll also need a videographer if you’re doing a video sales letter. Once the copy, the design and the video are done, your offer is ready to go live and you can start sending traffic to it.
At this point, your attention should turn to offer reporting and split testing. Know how your offer is performing, or you could be wasting money. Make any necessary tweaks to boost conversions, and hopefully, your offer will be a successful one.
Anatomy of a Funnel
A sales funnel is also called a sales process or sales cycle. They are all the same thing. They are a series of steps that you must take a customer through before they are ready to buy.
A good sales funnel is one that enables multiple sales to be made to the same customer, each one more significant than the last. If you can do this, you will maximize your customer value and afford to spend more on your marketing.
An online sales funnel might look like this:
- A free product in exchange for contact information
- A low priced product sold through a sales video and self-serve order form
- Upsells for higher priced products (these might be done over the phone)
An offline sales funnel might look like this:
- A print magazine ad that promotes an 800 number to request a free DVD in the mail
- The DVD contains a sales presentation for a low-priced product
- The customer can order further products through the mail
You can use software and services to handle much of this process. For example, you can use Grasshopper for an 844 phone number, and either an in-house call center or an outsourced call center if you’re starting out.
What is the difference between the two types of sales funnel, and which is better for your business?
The Broad and Shallow Funnel
There are two broad categories of funnel, and one is a low-ticket product line with a broad audience.
The broad and shallow funnel has three defining characteristics. One, the product being sold is low-priced and very affordable. Two, there is typically only one product in the sales funnel. Once the customer buys the product, there are no more offers made to them.
Three, there is a very broad audience. There has to be, because this is the only way to justify the lower customer value and make the business profitable. In other words, this sales funnel survives on a big volume of small sales.
An extreme example is toilet paper. It’s cheap and everyone buys it.
There are examples of broad and shallow funnels in online marketing, too. Many online businesses survive by selling one product for a relatively low price. They have to get a lot of traffic and a lot of customers to be profitable.
The Narrow and Deep Funnel
The other type of funnel is a deep one with a narrow audience.
The narrow and deep funnel targets fewer people in a more niche market. It also makes more offers to the customer, and ones at a much higher price point too.
This funnel starts by bringing customers into the door with a low cost offer. For those who buy, there are upsells, back end offers and much higher value products. Of course, not all of the customers will progress all the way through the funnel, so the audience is filtered even further.
A media company is an example of a business that uses a narrow and deep funnel. Advertising products are not for everyone, like toilet paper. There is a very specific kind of customer who buys advertising. The company needs low cost offers that introduce customers to the business. Some of them stop there, while some of them may go on to spend as much as $100,000 with the company.
A media company might have hundreds of front end buyers each day, yet only a few spending six figures a year.
While the broad and shallow funnel survives on a big volume of small sales, the narrow and deep funnel survives on a small volume of big sales. It’s a more cost effective way to market.
What a Mature Funnel Looks Like
Tony Robbins, the self-improvement speaker, is an example of someone who follows a similar set of steps to generate and sell to leads.
For step 1 and 2, he runs ads in a variety of media. He runs ads on Facebook, he has speaking engagements, he does interviews, he has a TV show on NBC, he runs pay-per-click ads and he has a radio show.
For step 3 and 4, he sells a handful of different low-cost products that turn his cold leads into warm buyer leads. These are usually sold through his website. For example, he has an audio course called The Body You Deserve at $199.
For step 5 and 6, he has a phone sales team that calls back the warm leads and sells his main products and services. He has conferences and coaching starting at $1,000 and increasing all the way up to $65,000.
Create Order From Chaos
For your own business, don’t expect it to be so well-oiled from day 1. In the beginning, you will have no ebook to sell, no phone scripts, no CRM and no sales videos. Maybe even no budget to spend on Facebook.
You also won’t know what works and what doesn’t when it comes to generating leads and getting them acquainted with your business.
So, just make things up as you go along. Every day, try something different. Just work on whatever catches your attention for that day. Yes, even handing out business cards while grocery shopping.
Most of it will not work, but a few things will. So, start repeating the things that do work, and make them consistent actions. Develop a process that can work again and again.
This is how to build a well-oiled funnel. It’s fine to start off with chaos, but over time, extract the order out of that chaos.
Hooray! Now you know how to turn cold leads into warm leads who are ready to buy your product or service, and do it in a reliable fashion.
In the next tutorial in this series, we’ll talk about direct marketing.