Most people when they think of creating a business online, they think of creating a product, selling the product, and hope to make enough capital to finance their next product idea. This kind of thinking is short-term, and doesn't lend itself well to a long-term business venture.

When you stop and think about a longer-term business model, whether online, off-line, or a mix of the two, you really need to think about the bigger picture.

What's really needed is a method to capture leads, convert those leads into smalltime customers, and gradually build them towards customers that spend more with you in terms of three factors: frequency, monetary value, and recency.

In terms of frequency, I think it is self evident that we want them to spend more money with our business on a more regular basis. In terms of monetary value we would like each transaction to be bigger, and have them spend more per transaction.

When it comes down to recency, ideally it would be better if they purchased last week rather than five years ago. This makes them a fresher customer that's more likely to purchase again soon, promoting the other two qualities I just mentioned.

There's also a fourth quality that's rarely discussed. We don't necessarily care how they buy from us, just that they do buy from us.
However some channels of distribution are significantly cheaper than others. Ideally then, media, or the method you used to bring in the sale, becomes increasingly important. So how do you turn a single product to product mentality into a thriving long-term business? Well, to begin with, you need to have a viable business model. And part of that business model absolutely must include the "marketing funnel." This is where it comes into play.

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