Here is Russell Brunson explaining the basics of a sales funnel, and what an upsell is.
Russell Brunson:
Hey everybody, today we're talking about sales funnels tutorials for beginners, and how I discovered upsells. To explain that, I want to show you guys my very first sales funnel I built as a beginner.
In fact, this is a picture of me here on the slide. This is me with my shaved head making a potato gun. This is the very first, one of the very first landing pages for howtomakeapotatogun and there's a doodle of me shooting potato guns 'cause I am a potato gun expert, but we're gonna talk about just the basic concepts behind a sales funnel because I think at first people get all complicated, like oh, it's gonna be really difficult, it's gonna be hard, but I want you to understand this is really, really simple.
When I first created this with my buddy Nate Plohn, I was going to college at the time, I was trying to figure out like how do I make money on the Internet, and someone said you should sell information products.
I was like, that's awesome, but I don't know anything about anything, and then that weekend was spring break, and Nate and I went and we made potato guns and had a great weekend, and then fast forward to like the next Monday, I'm back in school, sitting there kind of like doing the bored school thing, and all of a sudden I was like wait a minute, I know how to make a potato gun now.
That's information, can I create a product about that? And so I was freaking out, I went online. At the time, there's a website you could search to see how many people were searching for different keywords and there were 18,000 people a month searching for the phrase "how to make a potato gun" or "potato gun plans" or "spud gun plans", and nobody had a product, and I was like a light bulb, I'm gonna make a product teaching that.
So I got Nate, we went down to Home Depot, we got a video camera out, we filmed this whole thing, and we made our very first, very first product, and I put it online and I didn't know how to sell anything, so I just had like a basic website.
The website was like hey, come and buy my thing, and then I went to this thing called Google. You guys may have heard of it before, and on Google they had these things right here, and on the side there were these ads, and so I would pay for the Google ad, someone would click on the ad, they'd come over here, they would see this thing, and they'd be like "oh my gosh, I must buy this DVD so I can learn how to make a potato gun", and some of them would give me money.
Initially when we first started selling this, we were selling it for $37 a piece, and so people would buy that, and that was my business, and I remember putting the ads up and I was spending about $10 a day.
Let me do the math, so I was spending $10 a day in ads here, and from that I was averaging about one sale a day, okay? Now, as a college kid, I'm looking at this and I said okay, I give Mr. Google $10 and then he gives me back $37. That means I got $27 to put in my pocket. Next day I gave Mr. Google $10, he gave me back $37, I put $27 in my pocket, and I kept doing this, and I was like I am the smartest man alive, and then something evil happened.
The guys over at Google decided they wanted to make more money, and so they changed their algorithms. I'm not gonna get into that, but they changed their algorithm, and so no longer was it like I spend $10 and I make $37.
So, like my ad cost went up, I had to start spending $50 a day to make one sale, okay? Now I'm not the sharpest tool in the toolbox, but I gave Google $50 and they gave me back $37?
I was like wait, I lost money, I give them $50 and I get $37?
That's three or four days, I'm like wait a minute. This game sucks, I'm losing, and so I turned my ads off. I'm like I can't play this game, and I remember being frustrated, and one day I got a call from my friend, and my friend had a similar business to me.
He said, hey Russell, I think I figured it out. I said, figured what out? He's like, I stopped, and he didn't call it the funnel, he's like I created this thing called an upsell.
He called it an OTO, one time offer.
He said, what I did is that every single person who bought my product, I then upsold them something else, and I was like, well why would I do that? He's like, well, have you ever been to McDonald's before? I'm like yeah, and he's like, well you know how you go to McDonald's and you go through the drive-through and you're like, hey, I want to order a Big Mac, and the dude's like cool, do you want to super size it? Do you want fries and a coke with that? And he starts offering you upsells.
I'm like yeah, and he's like if you look at the math, he's like, McDonald's actually loses money selling a Big Mac. but they make all their profit when someone buys the fries or the Coke.
I was like, okay. He's like, right now, you're losing money selling your potato gun DVD. You just gotta sell these guys fries and a coke and then you'll be profitable, and I was like, I still don't quite get it.
He's like, if someone buys this, like what's the next thing you can do? If you were trying to serve this person, what's the next thing you could serve them with?
And I said well, when someone buys the DVD the most annoying thing is now they have to go to Home Depot and they have to buy the pipes, and they have to cut them, and like all this stuff to make this amazing gun, and he said, well what if, instead of you telling them to go buy the stuff, what if you upsold them a kit that did this whole thing?
I have no idea if this is gonna work or not, but I thought it looked kind of cool, and so he said, make an upsell where you sell them the kit.
So here is, here is the kit, so I did some math and I started calling around and I found these guys in northern Idaho who actually made potato gun kits, and I would start selling these for $197, and now this became my very first funnel ever.
Again, I didn't know it was called a funnel at the time, but someone comes, they click on the ad, they would see my DVD, they would buy my DVD.
On the next page, our upsell says hey, the DVD's coming, do you want me to ship the pipes too so it'll save you some time? Just $197, people are like that would be fantastic, and they'd click the button and they would buy it, okay?
Now, what happened, if you look at the math, was interesting is that Google didn't change their ad costs.
They still were charging me $50 a day, right? So that didn't change, but I came here and I made $37, so I lost some money, but then what happened is that one out of three people who bought the DVD would buy this, right? So let's say I got a bunch of clicks over here, boom, and say there's three people right here that bought the DVD.
One of these people then would go and buy this. For every DVD I sold, so I made $37, 1/3 of those people bought this, so I take $197, I divide it by three. If I do the math on that,
that's $65. So if I take $65 plus $37, seven plus five equals 12, nine, 10, 102.
So now I was making $102 for every single person that bought the DVD, does that make sense? 'Cause one out of three bought the kit as well, okay? So now I was on Google, I was
paying $50 a day in ads, but I was making, on average, $102 a day.
I put $50 in, I got $102 back, okay, and all of a sudden, I started looking, I was like I am the smartest man alive again. I spent $50, I get back $102, and so I was back in business, potato gun sales were cranking, I was having a good time, and then I realized wait a minute, potato guns are good, but the market's like this little.
Like what other markets could I do this with? And I started thinking, I said well, what if I did this in speed reading? I met a guy who was the world's fastest reader, Howard Berg, and so we set up a funnel for speed reading and it worked, and we said, what if we did this in the dating market? And I found someone who was a dating expert, we plugged it in.
What if we did this with supplements? What if we did? And we started doing this, and the funnels obviously tweak every single time, but the concepts are the same, and I became obsessed, and over the next five or six years, I launched over 100 different funnels in 100 different markets and became obsessed with it and it became so much fun.
But this concept of a funnel works in any business, and so what I want you guys to understand is this is how simple it really is.
It's not some complicated thing. Sometimes we get all complicated. It's very simple, so like we buy an ad to sell something. Somebody buys that thing, then what's the next logical thing they need?
Well, if they bought a potato gun, the next thing they need is they need a potato gun kit, and that becomes my funnel, and that's kind of what we take people through.
All right, hope you loved this tutorial about how I turned one of my hobbies into a sales funnel and turned it into money and how you can do it as well.
If you don't have a ClickFunnels account yet, go to iloveclickfunnels, get a free trial along with a whole bunch of other really cool bonuses that you are gonna love!
Check out my post on How To Sell Online..
