There is a great potential in product funnels as used in mailing lists to earn you money.

But they have to be set up correctly - something most of the advice I've gathered from articles on the web don't do.

Let's cover some basics. 3-4% of the people you contact (or opt-in) will buy anything you put in front of them - so the bigger your list, the more income you will make.

80% of your total income will come from 20% of your public - more or less. (And this means 64% comes from 4%, 51% comes from .3% - at least on paper.)

As people don't find things to be of value, they will drop off/opt-out.

With a poor conversion factor, you will probably wind up with 50% or more of your list being that 3-4% and so this will skew your data. High opt-outs, few purchases will give you a steady income - as long as you keep creating new products for these "buy anything" public. You are then in maintain mode for this small niche - and your income is pegged.

You want to be able to scale your income and keep increasing it, plus freeing your time to find new niches - not just new stuff to sell old customers.

Conversion is the key. You have to take that 80% of your public and convert them to buyers - if not big buyers, you want them to move up your funnel as fast as possible.

There are a couple of solutions to this: [Note that the below is new theory based on study of brick-and-mortar sales functions - but what works in the real world converts over to the virtual simply.]

1) Make your funnel look like an upside down champagne glass (the old-fashioned wide at the top, thin stem and then flattening out to a base as wide as the top - an hourglass that was sat on, more or less).

What you don't want is to have a shape like a grain silo - straight sides up and down with only one path to the top, take it or leave it.

Think champagne glassses - for the expensive varieties of that beverage you can celebrate with. You want to have lots of introductory services so that they can take cheap or free courses one after the other, while you continue to build relationships with them - plying them with various surveys until you know where they personally are coming from/looking for and also you have a better idea where your beginning list participants are at. Many don't buy right off, so give them more to do which builds trust so they will.

The top of your upside-down champagne-glass-funnel is wide again - but for those who have made it right on up with their Paypal account open to you at every offer. You have to keep them buying, so have a lot of new material up there, which they can use and benefit from. This doesn't just mean selling them more hours of personal coaching - which is expensive for you as well. New webinars on your latest research - on a reserved seat basis - is probably a more likely ticket.

2) Make people an affiliate at every level. This builds your community and allows participation. As well, you can offer rewards to top-performing affiliates, so that they work for you just to earn those top rewards (which other people buy outright). Regular training webinars at an affordable price also will keep them working for you. This is also a way for these people to get more exposure to your solutions and makes them more able to afford your higher-end services.

Now an interesting organizational point comes up. You are going to not just "segment" your list as some articles have pointed out, but you are going to have to subdivide it, stratify it, and then segment those stratas and divisions. Let's clarify those terms:

Division - part of the list by product line. You have an autoresponder service which should give you virtually unlimited email series. Set up your service so that you are servicing each different product line as itself.

Example: I have a list for people interested in self-help books and products. Another division would be the list of affiliates selling my self-help products. Affiliates wouldn't be excluded from taking services - they should be encouraged - but regular public wouldn't know what's in the affiliate division, unless they signed up for it. Now, in the self-help area, I have general self-help and a section just based on the Law of Attraction. These people can go back and forth through all the lower-level ecourses I offer (and I am planning about 5 or more, in addition to special reports, MP3's, etc.) Afterall, they are part of the self-help division, if not (yet) self-help affiliates.

Example: Suppose I start a blook on earning money through Internet marketing. This is a completely different division to self-help. Even the affiliate program is completely different. Now they could actually subscribe to my self-help division, but generally I wouldn't offer it in my email series - except perhaps at the very top end.

What this does is to enable you to have multiple income sources from the Internet, using the same autoresponder service for each source - but being able to keep them straight from each other. Note that each ecourse is its own series, as might be each special report. But at the end of each ecourse is the option to sign up for another ecourse - which continues until they buy something, where they are bumped upstairs. Your subscribers move seamlessly from segment to segment until they "graduate" to the next higher level through buying a higher-priced service.

Not to be cruel, they are able to complete their current ecourse, but ecourses after that will have a different set of emails, thought the material will be the same.

This opens up Stratas. Once a person has bought something, you want to sell them the next gradient material - although they might jump for your top-dollar item right off the bat, so you have to craft these carefully.

Example: person on a free ecourse buys your $47 item. Now you are going to work on getting them to buy your $147 or $197 item - but you can occasionally offer them a glimpse at webinars or personal coaching, just to tantalize them. If they don't buy, then get them in for another round of services at that level. More ecourses, with emails that offer them more $47 - $197 items of the same value are in order. As they trust you to deliver, they'll order from you. And the freebies you give out at this level (which are not widely available) are all valued at $47 or more.

Once they buy a $147 or greater level item, they are bumped upstairs to another strata. On that level, the freebies are proportionately greater in value, and they are being offered your $297 item. They may start racking up their credit cards at this point - if not, give them another high value service.

At the top strata, you can give them everything you have to offer for sale, since they trust you inplicitly with delivering high-quality items routinely. At this point, you also should have a sales record of them, as well as what courses they have taken - so you can personally suggest some items to them based on their experience. You now have developed a one-on-one relationship and can easily move into the per-hour coaching. Enough of these and you can reserve a suite of rooms and a meeting hall in some exotic locale so that they can all meet you in person and get their questions answered personally. A workshop - which they foot the bill for.

With the whole system in place, I can now talk to you about Segments. On the intro strata, the people who didn't buy right off got another intro service. Each intro service is a segment. On the next strata up, they could take more courses (segments), but the emails were tailored to their new status as a paid customer. Here they go again from segment to segment until they buy the next-higher course.

As you test and tweak your squeeze pages, you will be able to move them rapidly up to the highest levels where you can have them buy anything and everything. Your conversion rates will be much higher and your efficiency at turning newbies into trusting supporters will be high.

Why do I say to make affiliates at every strata/level? Because they can give their own testimonials about how your product has helped them change their own lives. If you set up your autoresponder properly, you can allow them to email that segment of your list with appropriate offers - or create a new segment just for joint ventures (and be able to shut it down if you have too many opt-outs happening from confusing cross-sales). But good affiliates can open up trusted lines with individuals on your funnel and help them take their next higher step - as the affiliate gets paid all the way.

The logical solution for Affiliates is to offer them personally segmented lists, available to them and to you only - in this way, they have a guaranteed percentage of all their sales to these individuals.

Yes, this would get complicated real fast - but around this time you are making so much income that you hire a person to chart this all out (and who is paid a percentage of the total gross, so constantly works to keep it efficient and come up with new ideas).

The above was based on studies of a multi-national organization and interviews with top sales personell on every level as well as their immediate managers through the course of several years.

What autoresponders do is allow you to have a multi-national sales force for your particular niche products - but automate them instead of having to deal with the massive HR headaches and meet that regular payroll. Start small and when you get past your first couple million in income, you can then contract someone to keep your ball rolling for your - freeing you to find more niches to invest your time in...

Now these are just notes at this point, a lot has to be fleshed out and tested. But I thought to break this to you early as I continue my research into this field.