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3 Ways Entrepreneurs Can Quickly Understand the Mysterious 'Funnel' Learning how funnels work will forever change your customer interactions and dramatically improve your creations.

By Calvin Wayman Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

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What's a funnel? Have you heard the term used in entrepreneurial circles before? Have you ever wondered what a funnel really is? Learning what a funnel is for the first time can be confusing. One thing for sure is it's certainly not one of those things your mechanic uses for your oil change. When it comes to your business, a funnel is something completely different.

Before you Google how to build your own funnel, it's critical to understand how they work. A funnel is often defined as something that guides the customer journey towards the purchase of a product or service. While this definition is true, it still doesn't capture the whole idea of what a funnel actually is and can do. Here are three analogies entrepreneurs can use to visualize what a funnel is.

Related: 5 Steps to Building Your First Online Sales Funnel

1. Elevator.

It's important to know that a funnel is not sending people to your entire store or website. With too many choices, the prospect gets overwhelmed. In this noisy world, attention is precious. As the old adage goes, confused minds say "no." A funnel is like an elevator. You and your prospect are the only two people inside. You now have a chance to give your "elevator pitch" in the short time you have together. A funnel is a controlled environment with very little distraction. When a prospect is in the funnel they essentially have two options -- listen to what you have to offer, or get off the elevator (i.e. Web page).

2. Real-estate agent.

You're in real estate. A prospect walks into your office with the intention of looking at a particular home model. He gets into your car for you to drive him around and look at houses. The customer feels in control of the journey, but you are the one driving the car. After all, you know the best houses to show to give the prospect the most value. A funnel is like this. Based on the interests of the prospect, you can guide him down a particular path and show him particular products or services.

Related: The 4 Stages of Every Relationship -- And Sales Funnel

3. Would you like fries with that?

We've all been to the drive-up window and after ordering we've been asked, "would you like fries with that?" This is called upselling. A funnel is like fast food (only with less grease, of course). It give you the capability to offer additional value to your customers once they've already purchased a particular item. A funnel can take you from barely scraping by, to dramatically increasing your profits. When you buy a burger from McDonald's they profit about 13 cents. But when you say "yes" to fries and a coke, profit jumps to $1.89 -- a 1,454 percent increase. That's the power of funnels.

Related: The Sales Secrets to Using Content Effectively at Each Stage of the Funnel

Knowing how funnels work will forever change your customer interactions and dramatically improve your first funnel creations. The new software called "Clickfunnels" is a great place for entrepreneurs to build their first funnel, and you can begin for free. Funnel expert and co-founder of Clickfunnels, Russell Brunson, says building funnels should be fun and easy -- like building Legos. Also like Legos, the variations on the types of funnels you can create are vast. So whatever you need for your business, from a product launch funnel, to a perfect webinar funnel or a network marketing funnel, there are countless possibilities. Now that you have a better idea what a funnel is, what will you create?
Calvin Wayman

Author, Speaker, Social Media Entrepreneur

One day, Calvin Wayman randomly quit his day job to pursue his dream of working for himself. As a new entrepreneur, he first went selling door-to-door and ultimately started the successful social media agency that he runs today. Wayman's passion is helping businesses grow through modern technology.

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