Clickfunnels – an online tool that helps entrepreneurs build sales funnels. Founded in 2015, it generated $14 million in revenue in the first year and rose to over $100 million in revenue by 2019.
Strategy & Tools
Clickfunnels is a completely bootstrapped company, with an evenly distributed stake of 27% per each co-founder. The last 19% belonged to Dotcom Secrets, another company founded by Brunson which was the initial funding source.
Why does it matter? Because companies with VC backing tend to have different spending patterns – it’s easier to spend money that you didn’t earn and to stay longer in the runway period, looking for the right business model.
Bootstrapped companies want to become profitable fast, and this creates a different environment that focuses on growth. That’s the foundation for Clickfunnels success.
Clickfunnels has been founded by Russel Brunson who had been a marketing rockstar long before the release. Over the years, he gathered a huge community of entrepreneurs around him. Those people didn’t have to be super engaged, but they knew who Brunson was and were likely to open an email that he might send.
This means that if he wanted to tell his audience about a new product, many of them would open the email, read it through, acknowledge that there’s a new product on the market and some of them would even pay and use it.
Brunson was obsessed with list building, as he was once told that if you don’t own the traffic, you don’t own the business – the client list is the core value.
And so he was interviewing people on how to build lists while building his list, attending and organizing marketing summits, paying affiliates to promote his products at a 120+% commission only to get their list members to join his, and many more similar activities.
All of Brunson's activities turned into a list of over 1 million entrepreneurs, which was a solid base for creating Clickfunnels. This list has been the first channel to promote Clickfunnels, bringing 200 people into the beta easily.
It was highly targeted, so whenever he thought of monetizing it, he would send a new product to the list - a coaching program, training, etc. It has proven to be making hundreds of thousands of dollars „just like that”.
Clickfunnels uses referrals heavily as it works with affiliates since day 1, paying them a 40% recurring commission for the lifetime of the customer which is a great way for them to make passive income. They even turn their users into affiliates–although many of them are already marketing experts.
As a fellow affiliate marketer, Brunson said, „I work harder to get my affiliates to promote than I get my customers to buy”. That’s relying on their expertise that has proven to be working so well in the Clickfunnels affiliate program.
Another way of incentivizing referrals is to pay for a dream car lease - for $500/mo for 100 referrals to the free trial or $1,000/mo for 200 referrals. Clients promoting the product also get called on stage at Clickfunnels events which builds their reputation, oftentimes the commissions are 100% on books or other offers that bring new customers. A ‘Powered by Clickfunnels’ badge is added to a landing page created with this tool by default, and if someone clicks it and then buys – the user will get a commission.
Brunson pushed a lot of content around Clickfunnels to his mailing list. Let’s not forget that most of the people on that list were entrepreneurs or to-be entrepreneurs–already the target of Clickfunnels.
The target audience bought over 400,000 copies of Brunson’s marketing books, they also read and popularized the concept of sales funnels and received help in getting their message on the market. As Russel claims on his website, his training, teaching, and software has created 1033 millionaires. Which means his content is helpful.
Even with this large list, Clickfunnels invested heavily in SEO, making it one of the main acquisition channels, and boosting the Clickfunnels growth. SEO is a long-term strategy, but once it picks up, it generates traffic that is exponentially larger than the effort invested.
Another important traffic acquisition channel in the Clickfunnels growth strategy were paid ads. Brunson said that they spent as much as $70,000/month. It wasn’t specified as to which paid channels that is specifically, but according to Similar Web, it’s Youtube, Google, Yahoo, Facebook, and other ad networks such as Outbrain or Taboola for native ads and PopAds for popups. These are typical traffic sources for affiliate marketers.
In order to squeeze the max out of the customer base, Clickfunnels uses agressive upselling. When buying the plan, it asks you three times to add other paid stuff to your cart.
Clickfunnels–as many other SaaS ventures–has built a community around the brand. It started with the list and a personal brand but Clickfunnels also set up Funnel Hackers community and organized its gatherings, as well as came up with a common enemy – VCs and Infusionsoft. This approach has brought the Clickfunnels community stronger together.
An event with Brunson pitching the solution on the stage was a massive hit since 380 people stood out and paid $1,000 for a 6 month subscription straight away, generating $380,000 revenue. Then, Russel repeated that on a webinar when it again contributed to $100,000 in sales, then $150,000–and again, and again.
A lot of the revenue comes from on-stage sales and more recently webinars. Brunson has been invited to a live event where he could pitch the solution on the stage – it became a massive hit
For a period of time, Clickfunnels even switched the main CTA to webinar signup and it boosted sales by $70,000 while showing no sign of a drop in free trial signups.
Clickfunnels use Clickfunnels to promote their company. That is the best way to show that the sales funnels approach and the tool itself work. Most CTAs drive towards a 14-day free trial. The rest of the selling happens later, during the checkout, in the platform, and in the email communication.
Having 1033 millionaires who made their wealth with the platform is a good example of how the tool can scale up with the progress of its clients. Someone might become a user without much knowledge but using the coaching and training programs, they can grow into higher-profile clients.
This creates loyalty, makes them much more likely to refer to the platform and shows that whatever they’re doing at Clickfunnels–it works. When they scale up, they’ll need more features and buy higher, more expensive plans.
The focus is definitely on customer acquisition, but you don’t make $100M in revenue in SaaS without focusing on customer retention.
A large part of the Clickfunnels success is Brunson’s personal brand, and he often goes fully transparent about the company’s strategy and results. Especially on his podcast.
Clickfunnels totally hit the jackpot with their popularity:
Psychology
People perceive things differently based on the frame they’re put in. After 14 days of free trial, you need to pay „just $267/mo”–but $267 each month is not necessarily ‘just’, although it depends on the scale of your business.
Another example of framing is putting value in place of cash. After you refer 100 people to a free trial, you could get just $500/mo in cash, but the car lease seems much more valuable.
The order and looks of possible choices in which they are presented influence the choice. The ‘Powered by Clickfunnels’ badge is set on by default, so some users will leave it there just in case someone buys Clickfunnels through their affiliate link and others will have it on for some time until they realize and turn it off.
The building in public, transparent approach of Russel Brunson makes the brand appeal as more authentic and people prefer those over the ones that seem artificial.
The reason why referrals are so powerful is that they often come out of the people you know. It seems that we’re much more likely to try products referred to us by friends or colleagues.
Agreeing to a smaller request makes you keener on accepting the larger request. In order to get the leads to accept a larger commitment of $267/mo, they need first to register for the free trial and add their credit card number.
Window of Opportunity
Clickfunnels growth strategy success didn’t happen overnight. It is the outcome of over a decade of tactical, intensive marketing oriented on user acquisition – first under Brunson's personal brand and his mailing list and then it was presenting his audience with the new software.
List building is not often discussed enough these days, but this example shows how many benefits you can get out of it. The business is in the list!
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