If you’re looking for ways to scale at positive unit economics, take a good look at your conversion funnel.
Conversion funnels are the series of steps your users go through in the process of becoming your customers. Most tech startups have conversion funnels that are less than optimal. In moving from sub-optimal to more optimal funnels, startups can multiply their conversion rate.
If you double your conversion rate, you immediately double new sales on your existing traffic. In addition, all your user acquisition campaigns become twice as efficient. You’ll be able to pump more money into existing and new marketing campaigns while maintaining positive unit economics. Together, optimizing your conversion funnel can get you 3x growth. Maybe more.
An optimal conversion funnel is one that your users find natural, clear, and compelling. They get exactly the information they want, when they want. The flow is effortless, and they are in control. They feel that someone really understands them. They want to learn more about your product and hope it’s as good as your site. They want to buy from you.
Getting there starts by deeply understanding your potential customers’ solution journey: The problem they’re trying to solve, the steps they take, their objectives at each step, their actions, their alternatives, and their concerns. If you want to create a conversion funnel that feels natural, that flows and builds trust, it needs to be aligned to fit your customers’ solution journey.
I have twice improved funnel conversion rates by over 10x. Once as VP marketing of a b2b start-up. The other as Co-Founder and CEO of a b2c venture. In both cases this led to fast growth. One of them resulted in an exit of nearly $100M.
Multiplying your funnel’s conversion rate is not only possible, it’s feasible. If you create the right conversion funnel, your startup will grow fast.
This is how you can do it.
Step 1: Conversion funnel analysis
Analysis is the most time-consuming step, but it has to be done. You can’t cut corners here. In order to create the optimal conversion funnel for your site, you must first understand where you stand.
Quantitative analysis:
In the quantitative analysis stage you use data to understand your users, their sources, and your site’s performance in engaging and converting them. Most startups use Google Analytics so that’s the analytics solution I’ll refer to.
First, make sure you can trust your data. As you do your analysis, you’ll probably find some data holes. Fix them. It will take time till they fill with data. For now, work around them if you can.
At a minimum, you must track the key objectives for the site as either goals or events. If you’re a b2b business and focus on lead forms or free trial registrations, you must have at least that tracked in order to make meaningful analysis. If you’re an e-commerce start-up (you make sales on your site in some way), you must track transactions at least.
In terms of your users, the important things to look at are demographics, geography, time on site, pages/session, sessions/user, bounce rate, visit frequency, mobile vs desktop. When you look at demographics and mobile vs desktop, pay particular attention to the conversion rate of each type. You’re on the hunt to find your most promising users.
Check where your users came from. What are the main traffic sources? Which convert best and worst? What are the engagement stats for each traffic source? At least For the bigger sources, drill down deeper and try to find more info. Are there large sub-groups that look promising? Look at traffic trends by source over time and have a think about which of your sources is scalable.
Now the focus shifts to your site. First, you want to see how your content performs. Which are the most popular pages? The main exit pages? The most popular landing pages? What is the bounce rate of each landing page? What is the conversion rate of each one?
The next step is to analyze your conversion funnels. There are many conversion funnels on your site. Every landing page is the beginning of a conversion funnel.
Analyze your conversion funnels on two dimensions:
- By top 2-3 landing pages
- By potentially scalable traffic source
For the landing page based conversion funnels, take the most popular landing pages and see which steps users go through after visiting them until they convert.
Look at your traffic sources in detail to find potentially scalable sources. For instance, if you’re getting a lot of traffic from referrals, dig in and see which sites are referring and if you can get more to do so. Find where these potentially scalable sources are landing on your site. Check the conversion funnel starting from there.
For your conversion funnels, the key things to look into are the conversion rate for the entire funnel and for each step. Unless you get almost all of your traffic from one type of device, this should be done for mobile and desktop separately. If you also have an app, analyze that as well. Check the relative performance of each conversion funnel. For your best funnels, find the weaker steps – the ones where you have the biggest drop off relative to the potential.
Finally, you need to know your user economics. What is your customers’ lifetime value? What is your user value by source and device type? Can you afford performance marketing at scale? What does this say about the sources that are most interesting for scaling? Can you grow through performance marketing?
Technical Analysis
Look for two things when you conduct technical analysis: site speed and bugs. Site speed has a surprisingly big effect on conversion. Make sure your site’s speed is reasonable by device type and for relevant geographies.
Bugs are a clean win. When you find bugs that affect enough users, just fix them. No need to A/B test. Check your conversion rate, time on site, bounce rate by devices, browsers, operating systems and screen resolutions to find significant groups that underperform. Then find and fix the issue. In parallel, use whatever other sources you have to find the significant bugs, including your QA, support team, videos of your users interacting with your site, and your own interactions with it.
Heuristic analysis
Heuristic analysis is a review of the user experience of your site. Does your site clearly indicate what’s special about your solution and it’s value for your customers? Is the claim you make believable? How clear it is for users to understand what to do next? Do you have a clear conversion funnel? Does it have a sensible sequence of steps? Is it the right amount of steps? Does each step showcase your value? Is it the correct call to action for each stage? Is it easy for users to navigate and find what they’re looking for? What causes friction and distractions along the way? Is your conversion funnel coherent?
It may be impossible for you to answer these questions objectively because everything on the site probably makes perfect sense to you. Turn to user tests, user videos, heatmaps, click maps to get some ideas of what’s off. It may also be a good idea to bring in a professional UX person to audit your site.
Competitive analysis
Your competition is anything that can solve your potential customer’s problem. By looking at your competition, you can better understand the solution landscape in the eyes of your potential customers. Your competition is also a good source of conversion funnel improvement ideas.
When you analyze your competition, spend extra time on the conversion funnel of your more optimized competitors. Start with the homepage. Check out the value proposition, claims and positioning, proof for claims, promoted features, and call to action. From there, click on the main call to action and follow the funnel through to what seems like the main goal. Try to understand the logic behind the funnel. See which ideas are interesting.
Qualitative analysis
Conversion will only happen if you offer your users what they want. Conversion rate measures the rate of alignment between the solution your users seek and what they perceive that your offer. The more users perceive that you offer a good solution to their problem, the more likely they are to convert.
Nothing is more important for conversion funnel optimization than to deeply understanding your target users. The more you understand who they are – the problem they’re trying to solve, their motivations, concerns, steps they take – the easier it will be for you to create the optimal funnel for them.
Use qualitative research together with quantitative research to identify promising target groups. To uncover your targets, look at your customers’ data and dissect it, talk to customer-facing resources such as sales and support, and run surveys.
For each target, drill down to understand the demographics, the value each target gets from your product, what they think is missing, their concerns and objections towards your solution. Surveys and interviews can help you understand the value of your product and what’s missing. User tests can uncover usability issues. Interviews, surveys, and talking to customer-facing resources can help you understand objections and successful counter- objections.
Solution Journey Mapping
Solution Journey is the process each of your targets goes through from the moment the need is triggered until a satisfactory solution is found. Generally, the steps of the solution journey can be grouped as initial trigger, research, screening, evaluation, and decision.
To really understand your target users’ solution journey, you need to do in-depth interviews with users and/or customer-facing resources. Find out what is the problem your target users are trying to solve, what triggered their solution search, the steps they take to get to the solution, and the detailed actions they take in each step.
Once the solution journey is clear, map it on a timeline, broken down into steps. For each step, indicate the user’s goals and the actions taken to accomplish the goal. Do this for each major target group.
Step 2: Optimal Conversion Funnel Creation
Solution Journey Alignment
Solution Journey Alignment is a simple yet potent framework we developed. It often leads to conceptual breakthroughs and enables us to revolutionize conversion funnels for our clients.
Your potential customers’ solution journey is the process through which they seek a solution to solve their problem. If you want to maximize your chances of being chosen as their solution, you need to fit their process.
Look at the solution journey for each of our targets and think of how to align the conversion funnel to best fit it. Where along the solution journey can you meet your potential customers? Which of the users’ actions at each stage presents an opportunity for you to get discovered. How can you get discovered? Is it scalable?
Once you figure a way to get the user to discover your site at certain stages, shift to how to best welcome the user. What are the objectives at this stage? Which offers and content are likely to have influenced the thinking so far? What are the concerns? What are the user’s alternative solutions at this stage of the journey? How can you stand out and provide what the user is looking for? How do you make the cut as the user moves to the next stage of the journey?
Finally, after you’ve figured out ways to get discovered at certain stages of the solution journey, how to best welcome the user at each stage, the right offer to make to engage further with your solution, you need to figure out what are the right steps and sequence that your conversion funnel should have.
Revert to the solution journey. What is the objective, actions, concerns of the user in the next step of the journey? How to best meet the user’s objective? What is the appropriate offer for each stage? How to dissipate concerns? Do this for every step.
Conversion Funnel creation
Now that you’ve collected the relevant information, you can create the optimal conversion funnel to scale with.
Start with your target customers. Who are your promising targets in terms of your ability to acquire them for a reasonable cost at scale and the fit of your solution with the problem they’re trying to solve? How can you scale them? What will be their main entry point to your site?
Then, focus on your target’s solution journey. What are the steps they take? What are their goals and actions at each step? Where can you meet them along their journey? How? What should you offer them and how should you position yourself? How can you best align your conversion funnel to their solution journey? How do you keep them engaged and your solution relevant throughout their journey?
Review your current flow both in terms of user experience and quantitative data. How aligned is your current flow with the solution journey? Which steps could it be aligned better? Where in your conversion funnel are you losing more users than seems reasonable? Do you have value propositions, calls to action and on-page content that are missing the mark?
Think about the conversion funnels of your competitors. How do their funnels look? How well are they aligned to the solution journey? What have you learned from them? What elements of their funnels, value propositions, key features, and calls to action may work for you?
With all these inputs, your optimal conversion funnel should become quite clear. It could be a radical funnel redesign or it could be close to your existing funnel with different messaging and offers. Perhaps a different sequence. Maybe a major change in one step and small improvements in the others.
When you do your conversion funnel redesign, stay lean by leaving advanced, fancy features for later. At all steps – concept, wireframes, and design, get users to provide feedback. Use the feedback to optimize the flow before you code.
Before you go live, do thorough QA and usability testing. Fix critical issues. Prioritize the rest and place it in your backlog. Make sure you have analytics set up properly and you’re collecting reliable data on everything imaginable.
When you go live, do it as an A/B test. If the conversion funnel change is dramatic, set up the test so that users branch out to different funnels.
Step 3: Deploy & Stabilize your conversion funnel
Start by driving a small proportion of your new users to the new conversion funnel. Measure your overall conversion rate and conversion rate of each step relative to the old funnel on a weekly basis. Turn this into graphs and share them weekly with your entire team.
If you did the right thing and went live with minimal features, you might be itching to build the fancy ones very quickly. Relax. Don’t do it. Give your new funnel time to breathe first. Focus on stabilizing your conversion funnel until you’ve fixed all the important issues, AND it performs better than your old one.
The more dramatic the changes you do to your conversion funnel, the more likely you’ll have issues when you go live. The price of making big changes is that you don’t know which elements are better and which are worse. It could be bugs, user experience issues, missing functionality. You need time to find and fix the big issues.
During the stabilization period, you should be all over your new funnel. Focus first on the weakest steps, where the conversion rate is lower than expected. Use technical analysis to uncover bugs. Expand QA to all team members with an easy to use bug tracking system. Spend time watching user videos, looking for issues. Continue to run user tests. Collect inputs from customer-facing resources. Prioritize all ideas and place them in the backlog.
Best practices for A/B tests stipulate that you shouldn’t change versions during a test. Break this rule. It’s for big traffic sites. During the stabilization period, you should continuously optimize the new conversion funnel while the experiment is running and you’re measuring relative conversion rate.
Bug fixes are great. Just fix and deploy. User experience changes may require A/B tests. Run them.
As your new conversion funnel improves, increase the proportion of traffic you send to it. When it’s clean of major bugs and performs better than the old one and seems stable, send all your traffic to the new funnel.
Step 4: Continuous Optimization
So far, we only focused on your main conversion funnel flow. After it’s stabilized, performs better than what you had before, and you’re out of obvious things to fix, it’s time to move on to other pages.
Remember when I wrote that I twice got over 10X conversion rate improvement working inside startups? Well, just so you know, it took a bit over two years of obsessing for conversion in each case. It’s a process. You need to start with the right foundation – Getting your conversion funnel right – then comes the big grind.
The most optimized digital companies, at levels of optimization your startup can only dream of, run hundreds, if not thousands, of concurrent A/B tests.
Start with pages that get a lot of traffic and are most problematic, and work your way down from there. Make allowance, though, for low traffic but high importance pages.
There may be landing pages that get a significant amount of traffic aside from the one your main conversion funnel starts on. Understand who lands there. Why they came. What they want. Welcome them correctly and lead into your funnel. Prioritize these based on traffic, quality, and potential for scaling.
Extend your conversion funnels beyond the site. Use emails, newsletters, remarketing, customer success, inside sales, sales reps to assist conversion. As you broaden your reach, make sure you collect data on everything and are continuously optimizing.
There are great resources online that cover continuous optimization in detail. It should always be a major part of your strategy. You should always be testing.
Summary and takeaways
Your conversion funnel probably sucks. That’s great news. If you unsuck it, you may be able to double or more your conversion rate and scale at positive unit economics.
You can optimize your conversion funnel for scaling in five steps:
- Understand your current situation: Where do your users come from? How do they engage with your site? Who is your competition and how do their conversion funnels look? What is your main conversion funnel? how does it perform? Where is it leaking?
- Find the right users. Get in their minds: It’s all about the user. Understand who are the best users for you to target, the problem they’re trying to solve, the steps they take to find a solution, what other solutions they encounter, and how they engage with your site.
- Create the Optimal conversion funnel for these users: Use everything you learned in the analysis, particularly the solution journey, to define the optimal conversion funnel steps, content, and offers. Seek user feedback. Go live as an A/B test with a small proportion of the traffic.
- Stabilize your funnel: The more dramatic the change, the more issues you’re going to have at first. Start lean and take the time to fix bugs and usability issues before you add features.
- Optimize Continuously: Once your conversion funnel is in good shape, turn to other important pages of your site and optimize them too. Extend your funnel beyond your site to email and other touchpoints. Track everything and never stop optimizing.
Now go kick some ass!
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