SFR 187: The 5 Phases Of Funnel Building – Stephen Larsen

SFR 187: The 5 Phases Of Funnel Building

Oct 30th, 2018 anchorwave

BUILDING the funnel is very systematic, and I wanna show you my process. But, there’s a whole additional step before I even think about building…

STOP! Do NOT open ClickFunnels until you’ve read this.

I’m serious. Back away from the editor. You’re gonna thank me for this in the long run. Sure, it’ll take you a few days longer to get that funnel out there – but it’s gonna be so much sweeeter if you do what I say ?

clickfunnels sales funnel stages

Let me ask YOU a question…

What if I could show you the 5 Questions you need to answer to remove a cool 90% of the risk in this entrepreneurial game – would you be interested?

You should be…

Because what I’m going to show you will stop you from screwing up your funnel build. A shiny new funnel is nice – but a funnel that brings cash in is much nicer.

I had to learn the hard way – but you don’t have to.

This game’s not risky if you just do it in the right way.

So gimme a “Hell, Yeah!” and we’ll do this.


I remember the day when I finally finished building my 1st product.

After 8 months of working in every spare minute during basic training, there it was; the answer to all our problems.

I was so excited. I remember yelling to my wife, “IT’S DONE!” I was like, “Babe, this is huge! The next question is what island shall we buy? This is so cool… we’re not gonna be broke anymore.”

Only nobody bought – because I didn’t go through all the 5 phases that I’m about to show you.

beach sales funnel stages

Sometimes people are so concerned with what makes the car engine run when they haven’t even learned how to drive the car.

There’s a whole bunch of funnel building tricks and techniques that you don’t need to know until you’ve taken these next steps.

Too many times we get involved in questions we don’t really need to answer yet!

However, some questions DO matter from a funnel building perspective.

So my purpose in this blog is to walk you through the very simple funnel building process that I have. To show you why it works. And how NOT to screw it up. (Maybe one day you’ll buy that island)

If you’d like to see me draw everything out – then you can jump on over to my YouTube Channel – but I will be using diagrams to explain everything here too:



Now there’s a crucial distinction that I want to make before we go any further.

Each of the #5 Phases that I’m about to show you has 2 distinct sections:

  2. DOING

I know that we always talk about taking action, but action that isn’t based on a system is plain risky.

Don’t start putting any of these phases into action until you have a general idea of what you will be doing in all of them…

I’ll explain more when we get to Phase # 5.


Phase 1 the what and the how

PHASE #1: You need to discover what your potential customers are already buying and how they’re buying it.

We call that “the what and the how.”

Let’s say I want to sell pens, first I need to discover:

selling pens product research

  • Who else is selling pens?
  • How are they selling them?
  • How their customer like to hear about pens?
  • How do their customers like to buy their pens?

You answer the “what and the how?”

what and how

  • What am I gonna sell?
  • Who are the people selling in the same niche?
  • How are they selling similar products to the one you want to sell?
  • Who are your competition?

When a niche has a lot of competition going on, we call it a Red Ocean.

You study the Red Ocean to discover the “the what and how.”

Phase #1: Research who’s already selling the things that you’re interested in selling and how are they selling them? That’s all you’re answering.


Phase 2 don't build sell

PHASE #2: Now that you know a little bit about the Red Ocean that your product exists in, you can start creating the Sales Message.

Don’t even think about creating a product at this stage. This is super key.

In my early years, I did this wrong sooo many times. I’d start building products before I even knew how to sell them. And that’s (capital D) Dumb!

You might be thinking “Well yeah, of course, I wouldn’t do that.” Yeah? Well, that’s what most people do!

They start making products without knowing how to actually sell the thing. Meaning: before they have a tested sales script and sales message.

Products don’t sell themselves – a product never sells itself.

I cringe when people say, “This product’s so good all I’ve got to do is get it front of people.” The actual cases where that happens are rarer than a rainbow unicorn. (Sorry, Jim!)

rainbow unicorn

If that happens, it’s the exception, NOT the rule – and I don’t build businesses based on exceptions.

I look for the rules and the patterns that help minimize the risk.

Phase #2: You start building is the actual sales message. You’ll know you’ve got the sales message down when there are wallets flying through the air towards you.

Meaning: Your sales message is so compelling that people are saying, “I have to have that! Where do I pay you?”

Then you actually need to collect money. Until people vote with their wallet, you don’t start building the product.

When you have customers money in your hand, that’s when you create the product.

If you’re thinking, “Stephen that’s kind of weird. Isn’t that kinda like a bait and switch?”

You always have to be 100% transparent. I always say, “Hey, the product isn’t ready yet, but if you pay this discounted price you can get the beta version which is coming soon.” And then I go build it real fast.

There are so many companies that do it that way.

You build your product using the market’s feedback.

Creating a product, and then trying to figure out how to sell it – or which markets should buy it – that’s risky. Don’t do that!

different not better

When you create your sales message, your aim is to be different, not better. Being different, not better (check out this blog post) is super key.

To create a Sales Message there has to be some idea of what the product’s going to be, but you don’t need to actually build the product. Does that make sense? That’s a crucial distinction right there.


phase 3 now build

Phase #3: Now that you have done your research and you have money in your hand – then you can start building your product.

In order to actually get some sales, you might need a basic funnel of some sort, but don’t obsess over it.

build your product

This is the model that we would follow at ClickFunnels:

  • We knew very well who we were selling to from looking at the Red Ocean – the “what and how.”
  • We crafted the Sales Message – honestly, that’s where we would start because we were so good at it.
  • Next, we would start the building.

I always noticed how Russell was willing to move forward with crafting the offer.

He’d kinda have an idea of what the offer would be, what the funnel would be and where the traffic comes from…

But if he could not think of a good hook and a good story… he did not move on to the offer. The order was: Hook/ Story/ Offer.

As soon as he knew what hook and story were, “Boom!” Then it was, “Kick Stephen into gear,” and I would start building the funnel.

Phase #3: You’re delivering on the promise that you sold in your sales message. You are building your product after you’ve sold it and have money in your hand.

take my money

Remember, product building should not be started until you’ve completed Phase #1 & #2 successfully.


Phase 4 it's funnel time

As I said, in Phase #2, when you test the sales message, you’ll need some sort of funnel, but it can be pretty basic.

It wasn’t for 4/ 5 into one of my major products that I started adding all the little pieces and extra glaze – all the features and the cool things that ClickFunnels can do.

Most people start by obsessing over the little tweaks.

product development process

But if it’s those tweaks and features (or those little split test that gave you an extra half a percent conversion increase), if those are making you profitable, then your offer and your sales message are not sexy enough.

I don’t want to bank on a feature to make my business profitable.

My products and my sales message should be so freaking good that the funnel is just an accelerant.

optimize the funnel

PHASE #4: All the funnel features and tweaks are just an accelerant for everything else. They are the final piece of the funnel you optimize when you know that everything else is working.

Only when you’ve reached this stage, do you go in and start building the funnel. Meaning: You add in all the glaze and all the cool stuff.


Phase 5 traffic traffic and more traffic

Phase #5: is traffic. Lots and lots of evergreen traffic sources all over the place.

Remember that warning I gave you at the start of this post?

Here’s why…

Even though traffic is the last of the #5 Phases to optimize, you need to be thinking about it as you go through each of the phases.

Don’t be this guy…

I was teaching at an event when someone came up to me and said, “Hey Stephen, I know my red ocean. I’ve got a converting sales message. I’ve built the entire product. I have a sweet funnel with all the features’…’

And then they asked, “Stephen, where do I get traffic?” *Facepalm* “Oh my gosh! Are you’re serious?”

traffic product research

You have to understand that if you go through all 4# Phases, and then you ask, “Where’s my traffic coming from?” You’ve waited too long.

You shouldn’t have started building the funnel or building the product until you knew this piece.

The traffic is where you get paid – “Why didn’t look at that before you started building?”

I made the exact same mistake with my very first product. I focused solely on building the product thinking that’s where the money comes from. It’s not!

Traffic is money. Attention is cash.

  • The product is just a reason to collect cash.
  • The sales message is just a reason to collect cash.
  • Traffic is the cash.

These are the #5 phases that you build in. However, 2 different things are going on:

learning and research

  1. You’re gonna learn from the red ocean – You’re gonna figure out “the what and the how.”
  2. For the sales message, you’re gonna learn, “What gets people so motivated that they actually want to give you cash?”
  3. When you have cash in hand, you’re gonna learn, “how other people in the Red Ocean are selling.” You learn what their sales messages are. You don’t write a sales page yet. You’re still in the research phase.
  4. Before you build the product, you learn “how other people have built similar products.” I create what’s called a purple offer – which makes me unique. But I still need to figure out what people are already buying?

I want to be prolific, but I don’t wanna be risky.

That’s why I call it the purple offer; Red Ocean + Blue Ocean = Purple Ocean.

30,000 FEET

30000 feet

I’m trying to give you a 30,000-foot view without getting in the weeds.

Once you’ve learned the Science of your craft from Successful People, the Art is reserved for You.

So this is how all the pieces fit together –  and here are the 5 Questions you need to answer:

  1. Research phase – “What and How.”
  2. Research phase – Figure out the sales messages. What hooks? What stories can I tell to get people so excited that they get up and they’re like take my money, and they’re throwing their wallet?
  3. Research phase – How can I build the products? How can I build the offer? How can I craft a purple offer? How can I craft something that both brings risky, prolific things, but then add the security of what people are currently buying?
  4. Research phase – What different funnel types are people liking to buy from?
  5. Research phase – What kind of traffic’s out there?

…Only after answering these questions do you move on to the actual execution phase.

Once you’ve learned everything you need to in the research stage, then it’s time to revisit the #5 phases again to build and execute.

Too often people research and build at the exact same time. Don’t do that. It’s scary.

Until Next Time – Keep Crushing It!

Hey, just real quick, a few months ago Russell asked me to write a chapter for a secret project he was doing. I had to write a chapter for a book, and this was the prompt – this is the letter I got from him… He said:

“Hey Steven, let me ask you a quick question. You suddenly lose all your money, along with your name and your reputation. You only have your marketing know-how left. You have bills piled high and people harassing you for money over the phone.

You have a guaranteed roof over your head, a phone line, internet connection, and a ClickFunnels account for only one month.

You no longer have your big guru name, your following, your JV partners – other than your vast marketing experience, you’re an unknown newbie…

What would you do from Day 1 to day 30 to save yourself?”

Russell Brunson.

If you want to see my answer, and a bunch of other marketers that also had to answer that in this amazing book and summit – Just go to

Again, you can see the entire summit, the book, and what we wrote in each of our detailed plans. Just go to Enjoy.

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