Why home party businesses have a brilliant sales funnel (and the lessons your business could learn from them)

My wife was invited to one of those “home parties” today; the kind where a host invites friends to attend a party and a consultant is there to demonstrate and sell a product.

Tupperware is the well-known pioneer in this field, but others have joined the fray: Norwex, Epicure, Creative Memories, Partylite, Pampered Chef. There are others, but these are the ones my wife has attended in the past year or two. (Disclosure: I love Epicure’s Jamaican Jerk seasoning).

There’s a reason that there is a surge in the number of home party-based businesses: They work! They have an absolutely brilliant sales funnel that simply cannot be matched by any other sales method.

Here’s why these home party businesses have brilliant sales funnels:

First, the sales funnel is very simple: “Call a friend”. The rep calls friends and asks them to host a party. The host calls their friends to the party. That’s it. The business grows from there.

Second, the sales funnel grows organically: Let’s say the rep calls 5 people and 3 of them host a party with 7 people attending each one. The 21 total party-attenders not only buy but they are also invited (and incentivized) to host a party. If 2 people from each party say yes, that’s 6 more parties. If those 6 parties each have the same number of attendees, and each party has 2 people who are willing to host, that’s another 12 parties. And on it goes. The numbers really add up.

Third, the sales funnel seems extremely low-pressure: Reps aren’t “selling” or “pushing their products”. Instead, they’re just demonstrating something that is remarkable about the product (like how well it cleans, how tasty it makes food, how creative you can be with the scrapbooking products, etc.). Prospects — the ones sitting around the living room — are just sipping their coffee, connecting with acquaintances, and hearing some good advice. It seems like a great time to connect with friends. What can be lower-pressure than that?

Fourth, the sales funnel is in reality suprisingly high-pressure: Yes, it is high pressure even if the rep is a low-key, no-pressure individual. It’s high pressure because of the pressure of relationships. The attendees see other people buying. They want to make the host happy and they know the host gets a bonus if they reach a dollar threshold at the party. There is usually a discount or bonus if you buy at the party. The products are useful and the rep is usually someone just like the party’s attendees. Bottom line? All of the elements are present to compel a sale (even if the product isn’t necessarily needed).


  • If you have a product that will work with a home party, give it a try.
  • Leverage the power of friendships and relationships (between your prospects and their peers) to sell more products or services.
  • Give discounts and bonuses to compel a sale (or more sales), especially if the buyer reaches a certain dollar threshold in the purchase
  • Eliminate as much of the pressure and pushiness of a sales as possible (while helping the Prospect to buy)
  • Offer a discount if the buyer becomes an evangelist by bringing someone else to you to buy your products or services
  • Remember that peer-to-peer word-of-mouth is the most credible purchase-inducing marketing you can possible have. If you can generate lots of word-of-mouth, you can forget all of your other marketing

Weekly Sales Funnel Challenge: Wrap-up

Earlier this week, I issued up the very first Weekly Sales Funnel Challenge. In it, I challenged you to write down your sales funnel. Nothing fancy, just a quick-and-dirty, back-of-the-envelope kind of sales funnel.

So, how did it go for you? I hope it went well! And just in case you wondered, I also took part in the challenge!

Here is my sales funnel, drawn out for the challenge. It’s actually the sales funnel I’m building right now (since I recently changed it), which is why you see an ezine listed in the funnel but not actually on my blog.

In the future, feel free to send your own Weekly Sales Funnel Challenge results to me and I’ll upload it here. Scan it or design it in your favorite word processing program and email it to me. Or, if it’s just a simple text-based answered, comment in the wrap-up. (By the way: I made a couple of minor modifications to protect what I feel are competitive differentiators. If you ever send something to me to post for a challenge wrap-up, I would kindly ask you to remove your competitive differentiators too!)

How to retrofit a sales funnel to your business

In yesterday’s blog post, I talked about creating a business around a sales funnel. But what if your business already exists and you are only now starting to pay attention to the need for an intentionally designed sales funnel?

If you run a business that has actually sold something to someone, you already have a sales funnel; you just may not have a sales funnel that you can easily articulate. So “retrofitting” a sales funnel isn’t so much a matter of inventing a sales funnel, but rather of understanding what you have done and then making changes to optimize your sales funnel.

First, you need to define each stage of the sales funnel: What do you mean when you refer to your Audience, Leads, Prospects, Customers, and Evangelists? In some cases, those will be pretty fuzzy definitions; in other cases, you won’t have included them at all in your sales funnel.

Now it’s time to work backwards through your sales funnel, based on your definitions: Ask yourself:

  • “Are our Customers evangelizing? If so, how?”
  • “What was the action our Prospects took to become Customers?”
  • “What additional information did our Leads give that helped us decide they were Prospects?”
  • “How did our Audience indicate to us that they were Leads? What small action did they take, or commitment or piece of information did they provide, to indicate that they were interested in hearing more?”

Now, you need to think about what marketing activities and sales activities you do, and, where they fit into your sales funnel. The first part is easy – most people know what marketing and sales activities they do. The more challenging part is figuring out where in the sales funnel these activities tend to be utilized. For the most part (but certainly not always!), marketing activities take place during the Audience, Lead, and Prospect stages, while sales activities take place during the Lead and Prospect and Customer phase. This step can take a long time, but don’t sweat the details too much. Give it your best guess, and realize that there could be times when some activities appear in more than one spot.

Write out profiles for your Customers. What are they like? What are they interested in? How do they interact with you? How would you describe them demographically?

Write out profiles for your Audience or Leads. (Choose one or the other. Some businesses might be able to do this for their Audience; other businesses might not be fully aware of their Audience and will need to do this for their Leads). What are they like? What are they interested in? How do they interact with you? How would you describe them demographically? If you have more than one demographic of Customer, choose the one (either the most profitable or the one you can get the most of).

What you should see from these two profiles is a broad group of interested Audience/Lead contacts being narrowed to a specific group of Customers.

Now this next part could be challenging: What path do your contacts take? In other words, how do your most-likely-to-buy Audience/Lead contacts (based on the profile you created, above) interact with your marketing and sales to become your Customers? This exercise is meant to have you look at all of the marketing and sales activities you do and see the path that your biggest group of customers tend to take. By the end of this exercise, you should have a list of some of the most effective marketing and sales activities you perform. But, you will also have a list of gaps that your contacts have overcome in order to become Customers anyway.

Congratulations! You’ve come quite far! You have articulated a roughly-hewn, imperfect sales funnel on which you are about to build a bigger, faster, smoother-flowing sales funnel.

Decide: Do your Customer profiles describe the kind of Customers you want? If so, continue on with the next steps. If not, you may have to make some additional adjustments throughout your sales funnel to attract those kinds of contacts and move them through your sales funnel.

Based on the path your contacts tend to take on their journey from an Audience member to a Customer, identify any gaps you may have. (For example, lots of businesses unintentionally skip the Leads stage altogether). Figure out ways to add easy baby-steps for your contacts to take as they progress along your sales funnel.

Look at your marketing activities and sales activities: By now, you should know the order that your contacts take in these activities. However, does each marketing and sales activity point your contact to the next step? If you use web-based articles to attract leads and a blog to help qualify prospects, do your web articles point to your blog? This is a HUGE mistake that businesses make when creating marketing and sales content – they often don’t publish marketing content that points to the next step in the sales funnel!

Make sure that your newly-created sales funnel matches the strategies and goals of your business. If not, you might have to adjust either your business’ strategies and goals or your sales funnel.

Identify your business’ processes and functions and staff, and determine how they impact your sales funnel. For example, how does your inventory management impact your sales funnel? How are orders taken from freshly converted Customers and sent to the warehouse? Or, how are leads passed off to your sales department? This is an important step in retrofitting your sales funnel because it ensures that your business is integrated together. Your sales funnel isn’t just a sales-and-marketing pathway. It’s an entire business model that has many moving parts for a single purpose.

Now it’s time to look at what’s left over: Marketing activities and sales activities that don’t contribute to your sales funnel; Contacts who are Audience members but never buy from you; Staff who don’t actually contribute to your business; Processes and functions that are a lot of effort but don’t move contacts forward.

Something needs to be done with these leftovers: Repurpose them or eliminate them.

Weekly Sales Funnel Challenge: Write down your sales funnel

The Weekly Sales Funnel Challenge is a week-long challenge for business owners to focus on a specific aspect of their sales funnel for one week. It’s a fun way to keep you focused on one of the most important parts of your business. A new Weekly Sales Funnel Challenge is published every Sunday and a wrap-up post is published every Saturday.
Weekly Sales Funnel Challenge

I’m introducing a new series on my blog — the Weekly Sales Funnel Challenge! It starts today and it goes until next Sunday when I post the next one. Each week, I’ll post a challenge related to your business’ sales funnel for you to do during the week.

Okay, it’s the new year. Some of you are starting businesses for the first time. Others have created goals for a bigger, better, more profitable business. Let’s start with the most basic of challenges, just to kick off 2011! Your challenge is to draw out your sales funnel.

It’s easy: Just grab a piece of paper, list the five basic sales funnel stages down the left (Audience, Lead, Prospect, Customer, Evangelist). Then on the right, just write down the things you do in that particular stage. Maybe you use Twitter in the audience stage — write it down beside the “Audience” label on your paper. Maybe you use a blog in your leads stage — write it down beside the “Lead” label on your paper. You probably have more than one channel or activity in each stage. Spend the week and write down whatever you can think of. If you do something in more than one stage, list it for each stage.

Here’s an example:

Audience: Twitter, SEO articles, Press Releases
Leads: Ezine
Prospects: Phone call, Sales page
Customers: Insider newsletter
Evangelists: Invite-a-friend event
(You might have more in each stage. Or, you might have nothing at all. This is just a start).

And if you end up with a blank piece of paper at the end of the week… well, it either means you don’t run a business or you’re not sure what your sales funnel is! That’s okay, you’re in the right place.

Good luck! I’d love to hear how it goes.