B2b SaaS: How we multiplied conversion rate by 16x and scaled to a $100M exit
When the first coronavirus wave hit and the scale of economic carnage became clear, it was all about survival. Nimble founders reacted swiftly by cutting their burn rate, adapting their products, and doing whatever it takes to retain their customers.
If this is you, congrats! It’s important to survive.
But survival is not enough. Startups need to grow.
How can you grow when cash is tight, customers are afraid of spending, and some of the marketing tactics that worked for you before are now off-limits?
Whatever you did or didn’t do in digital, now it’s where most of the game is played. If you want to grow and can’t count on external funding, your best bet is to fine-tune your digital marketing until it’s profitable and grow from there.
A digital funnel is a series of pages, offers, buttons, and forms that users go through in the process of becoming customers. Funnels begin with the initial click that brings a user to the site, continue through the homepage or landing page, pass subsequent pages, and end when the sale is made or lead is captured. The effectiveness of a funnel is measured by its conversion rate.
Most startups launch their site with a reasonable funnel. Afterward, they rarely make major changes to it. The steps, value propositions, offers, calls to action and other content elements stay pretty much the same. Even when the site gets a redesign, only the skin changes.
Radically changing your funnel is very risky, especially if the funnel is working. Radical changes can soak up critical resources and the new funnel may end up worse than the old one. It’s safer to make incremental changes.
This is exactly where your keys for growth are hiding.
If your product is innovative and your funnel has never been challenged, your current funnel is probably sub-optimal. It converts much worse than it could. There’s a better sequence of messages, offers, and steps possible.
Your funnel should be aligned with your customers’ solution journey: The problem they’re trying to solve, the steps they take, their objectives and actions at each step, their alternatives, and concerns. It should address their problem while demonstrating your product’s value and uniqueness. The flow should dispel your customers’ concerns, build trust, and move them smoothly towards conversion.
If you nail your funnel, you can multiply your conversion rate, slash the cost of acquiring new customers, reach a profitable digital model, and scale your startup.
I improved funnel conversion rates by over 10x twice. Once as VP marketing of a b2b startup. The other, as Co-Founder and CEO of a b2c venture. In both cases, this led to fast growth. One of them resulted in the sale of the company for nearly $100M.
Each time, it took less than 6 months to double our conversion rate.
If you double your conversion rate, you immediately double new sales on your existing traffic. All your user acquisition tactics become twice as effective. You can pump more money into existing and new marketing activities. You can scale.
An optimal funnel is one that potential customers find natural, clear, and compelling. They get exactly the information they want when they want it. The flow is effortless, and they are in control. They feel that someone deeply understands them. They’re eager to learn more about your product. They hope it’s as good as your site. They want to buy from you.
This is the funnel optimization framework we use at Convert2X, my agency. It consists of deep, holistic analysis, funnel design, materials creation, new funnel launch, and post-launch stabilization. It can be done in 6 months.
1. Understand your current situation: It’s all about your potential customers and how they interact with your funnel. Who are the best users to target? What problem are they solving? How do they go about seeking a solution? How do they get to your site? What is their engagement like? How does your funnel perform? Where is it leaking? Why?
2. Create the Optimal funnel for your potential customers: Use everything you learned in the research to align your funnel to your customers and create the optimal funnel steps, content, and offers.
3. Stabilize your funnel: The more dramatic the changes, the more bugs and usability issues you’re going to have at first. Start lean and take a few weeks to fix the big problems. With many changes at once, some elements in your funnel will be off. Run new user tests and analyze your funnel data to develop and test improvements.
4. Optimize Continuously: Ok, this is beyond the six months it takes to create and stabilize a better funnel. Once your main 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, retargeting, and other touchpoints. Track everything, and never stop optimizing.
This is the most time-consuming step. It requires learning all you can about your users, how they interact with your funnel, where, and why they drop off. If you want to nail your funnel, you have to be thorough. No shortcuts here.
Heuristic analysis is a review of the user experience of your funnel, on each relevant platform. Does your homepage or landing page scream out what’s special about your solution and its value for your customers? Does your company look trustworthy? Is it easy to understand how your product works? Are the claims you make credible? Is it compelling to move forward? Does your funnel have a sensible sequence of steps? Is it the right amount of steps? Does each step showcase your value? Is it clear for users what to do next at each step? Is it the correct call to action? Is it easy for users to navigate and find what they’re looking for? What causes friction and distractions along the way?
It may be impossible for you to answer these questions objectively because everything on your site makes perfect sense to you. Turn to user tests, usage videos, heatmaps, and click maps to get some ideas of what’s off. It may also be a good idea to bring in a professional to audit your site.
There is a lot more to be learned through quantitative analysis than I cover in this article. I’ll touch briefly on the two most important parts: your users and your funnel.
Who are your best users? Which traffic sources do they come through? Which of these sources is scalable? Where do they land on your site? How do these pages perform? Where do they leave from? What else can you find out about your users and their engagement with your site? If you’re using Google Analytics, create segments such as desktop vs mobile and new versus returning and look for interesting insights.
For your funnels, the key things to look into are the conversion rates for the entire funnel and each step. Find the weaker steps — the ones where you have the biggest drop off relative to the potential. Compare step by step performance by device, top traffic sources, top landing pages, and new vs. returning users.
Look at 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 for all devices and relevant geographies. Pingdom is a great tool for speed checking and optimization tips. Google Analytics works well too.
Bugs are a clean win. When you find bugs that affect enough users, just fix them. No need to A/B test. Trace the sources leading to your error page. Check performance across devices, browsers, operating systems, and screen resolutions to find significant segments that underperform. Compare performance on metrics such as conversion rate, when you have enough data, and time on-site or bounce rate, when you don’t. In parallel, look for bugs using your QA, support team, and videos of users interacting with the site.
The funnels of your more optimized competitors are a good source of improvement ideas. Start with their homepage. Check out the value proposition, claims, promoted features, calls to action. From the homepage, click on the main call to action and follow the funnel through. Try to understand the logic behind the copy, hierarchy, and funnel steps. See which ideas are interesting.
Nothing is more important than deeply understanding your potential customers. The more you understand who they are, the problem they’re trying to solve, the steps they take, their motivations, alternatives, and concerns, the easier it is to nail your funnel.
The coronavirus pandemic changed your customers’ perspective. When they spend now, it’s for things that are perceived as must-haves. Things that will help them survive. That’s where you want to be. You want to position your product as a must-have.
To say the right things on your site, it’s critical to get fresh customer insights. What makes customers convert now? How does your product help them with their challenges? Which features are most critical?
Use surveys together with quantitative usage data to identify interesting segments. Drill into each segment to understand the demographics, the value they get from your product, what they think is missing, their concerns, and objections.
Surveys and interviews can help you understand the perceived value of your product. “How would you describe <your product> to a friend?” Is a great open question to put on your survey. User tests can uncover usability issues. Interviews, surveys, and customer-facing resources in your team can reveal objections and prepare counters.
Your customers’ solution journey is the process through which they seek a solution for their problem. Different problems have different solution journeys, but there are several common steps: research — shortlist interesting solutions, evaluation — compare and rank, decision — choose the best solution, execution — make it happen.
To map your customers’ solution journey, you need to interview relevant users, customers, and/or customer-facing resources. What triggered your potential customers to search for a solution? What problem are they trying to solve? Which steps do they take? What are their actions and objectives in each step?
Once the solution journey is clear, map it on a timeline. Break it down into steps. For each step, list your potential customers’ objectives and actions. Do this for each customer segment.
To maximize conversion, your funnel needs to be aligned with your customers’ solution journey. Your potential customers use their own funnel to find a solution for their problem. To maximize conversion, your funnel needs to fit their funnel.
Where along the solution journey do your potential customers encounter your product? What do they want to know when they come to your site at that stage of their journey? How should you welcome them? What are their objectives at that stage? What should be your offer? What are their alternatives? How do you stand out? What are their concerns? How do you diffuse them?
With all the inputs you collected, your optimal conversion funnel should become quite clear. It could be radically different or fairly close to your existing funnel. Maybe just changes to the messaging and offers. Perhaps a different sequence. Maybe a major change in one step and small improvements in the others.
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. Prepare for going live as an A/B test. If the funnel change is dramatic, set up the test so that users branch out to different funnels. Start lean. You can add features later.
Start by driving a proportion of your new users to the new funnel. If you did the right thing and went live with minimal features, you might be itching to add the fancy ones very quickly. Relax. Don’t do it. Give your new funnel time to breathe first. Focus on stabilizing it until it performs better than the old one AND you’ve fixed all the important issues.
The more dramatic the changes to your funnel, the more likely you’ll have issues when you go live. The cost of making radical changes is that you don’t know which elements are better and which are worse. It could be bugs, user experience issues, missing functionality, or unclear copy. 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. Expand QA to all team members. Spend time watching user videos. Run user tests. Collect inputs from customer-facing resources.
Best practices for A/B tests stipulate that you shouldn’t change versions during a test. Break this rule. During the stabilization period, you should continuously optimize the new conversion funnel while the experiment is running and you’re measuring the relative conversion rate.
As your new funnel improves, increase the proportion of traffic you send to it. When it’s clean of major issues, performs better than the old one, and seems stable, send all your traffic there.
We focused on your main funnel so far. After it’s stabilized, performs better than what you had before, and you’re out of obvious things to improve, it’s time to move on to other pages.
Remember when I wrote that I got over 10X improvements twice? Well, each one took a bit over two years of obsessive optimization and countless A/B tests. You can more than double in the first six months, and you can more than double afterward too.
Start with pages that get a lot of traffic and are most problematic, and work your way down from there. Make allowance for low traffic but high importance pages such as your “about us” or deep product specs pages.
Extend your funnels beyond the site. Optimize emails, newsletters, remarketing, customer success, inside sales, sales reps. As you broaden your reach, make sure you collect data on everything and are continuously optimizing.
If you nail your digital funnel, you’ll multiply your conversion rate, slash the cost of acquiring new customers, reach a profitable digital model, and scale.
You can double your conversion rate in months. Now is the perfect time to start.
B2b SaaS: How we multiplied conversion rate by 16x and scaled to a $100M exit
How to reach positive unit economics: Top tactics for maximum impact
How to create a conversion funnel you can scale with: A detailed guide for startups
Since 2018, we’ve been helping Shopify apps achieve exceptional growth.
Our team at Convert2x offers a comprehensive solution to scale your Shopify app:
– Grow organic and paid traffic
– Optimize your Shopify funnel
– Maximize monetization
Convert2x was founded by Boaz Lantsman, a repeat entrepreneur and conversion rate optimization expert. Since our inception, we have focused on Shopify apps, perfecting every aspect of scaling: from SEO and paid traffic acquisition through end-to-end funnel optimization that maximizes monetization.
Before founding Convert2x, Boaz led marketing at a B2B SaaS startup, where his strategies multiplied the conversion rate by 16x and increased sales by 7x, leading to the company’s acquisition by DocuSign for nearly $100 million. Following this success, Boaz co-founded RoutePerfect, a travel startup where he achieved a 12x increase in conversion rate and scaled the platform to 5 million users and $500K MRR.
In addition to his work at Convert2x, Boaz co-founded Prys, a breakthrough Shopify app growth platform (https://www.prys.io). Prys provides end-to-end attribution, showing which search terms and campaigns drive your revenues, and offering actionable insights to scale your Shopify app.
At Convert2x, we apply Boaz’s proven methodologies and our team’s extensive expertise to help Shopify apps thrive. Join us, and let’s grow your app to new heights.
We help Shopify apps find and prioritize keywords, scale traffic with SEO and paid ads, maximize monetization, and optimize the Shopify app store page and post-install funnel.
We had a great experience on our funnel optimization project. Boaz was instrumental in helping us improve our funnel, which ultimately led to doubling our conversion rate and tripling our sales.“
Boaz helped us build a cohesive digital funnel and improve our customer experience. He is a seasoned marketer who understood our brand positioning, value, and the competitive landscape.”
Boaz and his team delivered a highly rigorous, professional, and impactful project to optimize our conversion funnel and we would not hesitate to recommend Convert 2x to other businesses looking to realize exponential returns.”
I’ve worked with many consultants before, who are just in it to sign another client and make another dollar. Boaz is far from that type of person. There haven’t been many people in my career who I’ve worked with that “get it” quite like Boaz. He uses a data-driven approach and industry knowledge to provide strategies that work. He helped us optimize some areas of our business better than I could have imagined. I thought some of the projections he proposed to us were impossible, but we’ve actually outperformed these and are still on our way up. I couldn’t recommend Boaz more (unless you are a competitor, in which case he sucks…)