Empower Your Product Management with Digital Conversion Funnel for Product Management

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marketing funnel is a visualization of your client's journey divided into stages from finding out about what you offer and about your brand to eventually purchasing your product or service it is often referred to as a sales funnel conversion funnel purchase product customer journey funnel but the general concept is pretty much the same here breaking down your clients journey into steps and then tracking and improving how all the steps convert one into another and since some people just naturally drop out at each stage that visualization resembles a funnel which is wide at the top and more narrow at the bottom of course living in the dream reality we would have a cylinder so everyone who finds out about your business would end up paying you for something and all of your prospects would become your customers or even returning customers referring their friends and promoting your brand by word of mouth unfortunately that's not how things work for businesses so the number of people traveling from discovery to action gets lower as they're moving down the funnel and everyone who is involved in growth on an organization side like marketers sales people product managers business owners and many other roles dedicate significant efforts to making that funnel wide and cylindrical their mission is to acquire and guide as many potential customers as possible towards making the desired action now that you know that the marketing sales funnel is basically a generalized view of your client journey i want to give you an idea of why we need funnels so that you better understand the purpose behind site generalization and know how funnels can help with growing your business so there could be numerous reasons why prospects who began their journey with you have not yet become your clients and it could take you forever to make the right assumption about why that happened yet breaking down the journey into steps increases your chances of taking the right guess apparently as soon as you know the drop of reason you could fix that and get more people to become your clients hence operate more successfully as you can see revenue growth is mainly achieved through funnel improvements so you either get more people in there or just convert them better that is the entire point of building and tracking conversion funnels apart from gathering insights tracking final conversions on a regular basis helps to control your business performance and get alerts on both positive and negative changes that may occur at any stage you're probably curious to build your own funnel and see the big picture right away but first it is necessary to become familiar with some common funnel types their differences and popular approaches towards building those as soon as you understand that part you will not struggle with building an efficient funnel for your business as funnels apply to any industry brand or company type there is no one fits all funnel version so your customers might follow a different journey depending on whether you're a part of a b2b or a b2c company and you can customize your funnel ing to the journey maybe you want them to make a purchase online or in store or maybe just fill out a form on your website or download and then subscribe to your app it always depends some funnels have many stages while others just have a few with different names and actions taken on both customers and business sites although everyone names their stages differently and funnels may diverge at the micro level the majority include the same basic stages at the market level in the beginning of their journey people develop an intent to solve some sort of problem that your business could help them with next they start looking for a solution like yours and make the first contact with your business that's when they become aware of the product or service that you're offering next they develop an interest and start evaluating your offer and finally they buy from you so at the highest level we have top of the funnel middle of the final and bottom of the final sections then we have certain stages in each of the three sections there are numerous approaches to the final concept so we will take a look at the most popular frameworks just to get you familiar with those and then focus on one that is like the most preferred in the modern tech and startup industry let's start off with a super simple layout just to not get you overwhelmed this one is called an aida and it was first mentioned like over 100 years ago in america which i find like super exciting as it's still pretty much relevant nowadays and made it through such global changes in history and overall consumer culture digitalization we'll be using an online tennis equipment store as an example to showcase this concept i will take you through the funnel stage by stage so that you have a full understanding of how it works so the a here stands for awareness at this stage your potential customers have developed a need for something you offer but they don't know that your product or brand exists just yet so the very first task would be introducing our brand to that audience tennis balls and strings are replaced on regular basis so we could target pretty much everyone who's into tennis within our delivery area not limiting ourselves to only those people who google for such good specifically in our case the first step probably taken by a colder audience would be visiting our website blog and then the home page or just the homepage straight away that way we accomplish our goal of getting them familiar with the brand next the i stands for interest so when players either need to purchase another can of tennis balls or look for a new racket specifically we want them to learn more about the options and to really get them engaged with our website and products so we set another two steps here such as visiting the product page and browsing more than three pages let's say d is for desire at this stage your potential customers start leveraging their possible decision and are likely to compare your product or service with other brands and offers out there they show some sort of intent to make a purchase so the steps would be checking product reviews delivery option size guys etc and of course adding certain items to a cart okay that's it or not something is missing right the modern representation of an aida funnel is commonly extended with the l which stands for loyalty that would be definitely silly not to even strive for bringing that customer back especially nowadays when customer acquisition cost on the internet in such a competitive niche as e-commerce can be quite high and one purchase is commonly just not enough for these businesses to function properly for the loyalty stage we will set our steps to refer friends and make a recurring payment and that wraps up the first simple example now let's proceed to the next one which is a bit more complex by the way if everything looks clear and you're liking this video so far please let me know by giving it a huge thumbs up and subscribing to elsewhere product academy channel this will help us to keep up with more videos like this one so one of the most widely adopted funnel frameworks in the modern tech and startup industry is this one by dave mcclure can we just please rely on the computer voice to pronounce that for me did you mean series a triple a r so i already have the actions filled in in advance to not go through that process once again and to not get you bored as well let's just quickly check what stages are there and cover the conversion tracking part which is a very important piece to complete our puzzle let's suppose that we have a mobile app with a subscription-based pricing model so we want to provide our users with some sort of a free trial so that they can see whether it does feed their needs or not before we charge them first of all we need to acquire people who will our app then at the activation stage we want them to engage with the app content so that they really understand the value it provides next as for the retention part we want them to come back and reach a certain limit where they would need to subscribe in order to use our app at its full potential and another r here stands for revenue in this case when the user decides to subscribe we start getting revenue from their subscription and that revenue depends on their lifetime value basically how long they will remain subscribed to our app last but definitely not the least we also have that referral stage at the bottom of our funnel where we want our users to bring as many other new subscribers as possible in this example i want to focus on funnel metrics metrics help measure volumes and conversion rates from stage to stage they tell you how your efforts are performing through the entire customer journey and help identify both bottlenecks and opportunities let's see how this funnel is transformed after we apply metrics alongside previously determined steps now it's not just a simplified customer journey visualization but a powerful and insightful tool that could help you gather actionable insights to scale and grow your business there are so many other funnel frameworks that you could find on the internet but the majority just mimicked the first two frameworks that we discussed in this video the interesting trend however is how nowadays businesses prioritize building long-term relationship with their existing customers over trying to get as many new leases as possible to enter their funnels the trend brought us an extended hourglass framework where whatever happens after the initial purchase is reviewed just so thoughtfully and precisely as potential customers are nurtured before they pay for the first time so it looks more like a rather than the martini glass interesting right yet the real game-changing approach that has been trending in recent years is treating your customer journey not as a funnel but as a cycle or loop mckinsey and company were one of the first who came up with an idea that the initial purchase experience influences not only whether the client will likely come back and repurchase but their feedback also impacts other customers path and decision making process ing to brian balfour a growth expert and his partners from reforge funnels were a great starting point however they have their downsides as well for example companies build their structure in such a way that different departments are responsible for specific final stages and they optimize their key metrics at the expense of each other the idea of growth loops is about creating closed systems where the input through some process generates more of an output that could be reinvested in the input overall loops seem to be a great next level tool that helps you to get rid of functional styles to keep your teams on the same page and find the growth opportunities by understanding how one cohort of users list to another the only con is that determining the gross loops for your product is not as easy and straightforward you would need to dig into lots of data about your user's behavior and probably just have a great scalable product to be able to spot such patterns among your clients actions but it is definitely something i would keep thinking of and looking for continuously having a regular funnel set up in the first place let's now just quickly sum up what we have just learned conversion funnel is a visualization of your client's journey broken down into steps it is also called a marketing funnel sales funnel purchase or customer journey funnel what you call it basically depends on your perspective and how you or your team impact the funnel funnels help gather insights about your customers identify bottlenecks and growth opportunities as well as get alerts on both positive and negative changes there are numerous final concepts but they share the same stages at the macro level awareness consideration and decision the most popular funnel framework which has been around for over a century is an aida or i would even say a-i-d-a-l which is more up-to-date however in the modern tech and startup industry companies stick to a framework called aaarr a more sustainable alternative to building funnels is identifying growth loops we suggest having a basic funnel setup anyways but definitely keep looking for a loop connection between your funnel outputs and inputs that is it for today guys thank you for staying with us up to this point if you would like to see another video on how to build the conversion funnel for your business let us know by liking this video and subscribing to railsbar product academy channel also don't hesitate to share your thoughts in the comment section below see you in our next one [Music] you