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How to Optimize Your Funnel

In the previous lessons, you learned all the goodies about what data to track and how to make sure it’s squeaky clean. Now it’s time for the next step: action. How do you make use of that data to not just understand your funnel, but optimize it?

In this lesson, you’ll learn how to identify the most impactful areas for improvement and how to actually plug those leaks. The key is using a combination of quantitative and qualitative tools!

Identify Areas for Improvement

The first step to optimizing your funnel is learning how things exist today. You should track all of the key events along the journey for a customer to discover, engage, and eventually pay you.

Funnel analytics tools like Google Analytics, Mixpanel, Amplitude, and Kissmetrics are great for this stage of the game. You can easily see the breakdown of how users are going through your funnel, and even slice and dice by attributes like the channel they came in from or their company size.

A sample funnel in kissmetrics

Sample funnel in Kissmetrics

You’ve probably heard the term “leaky funnel.” In an ideal world, all of the bars land at 100%. Unfortunately, we don’t live in that world, so there will be drop offs at each step of your funnel. For example fromViewed Product to Added Product to Cart , nearly 70% of people fall away. This is a leak.

Your job is to figure out which are the most egregious leaks and execute a plan to stop those glorious drops from sneaking through.

Focus in on One Part of the Funnel

With the complete picture of your funnel, you have to decide which leak to plug first. You may be lacking context at this point, so a common question to ask is “What’s a good conversion rate?”. We have a chapter coming up on benchmarks soon, but the main thing to remember is there is always room for improvement. No matter what your conversion rate is, it can always go up.

That said, here are some areas to think through to help you prioritize which funnel step to go after.

  • Reach — The higher up in the funnel you focus, the more users you can affect with your optimizations. And with more users, your optimizations will have compounding effects. For example, let’s say your site gets 100,000 viewers a month, and 5% of those (5,000), sign up. If you can increase that to 10%, you’ll have 10,000 people going through the rest of the funnel. If you focused on improving the billing flow, where only 0.05% (500) people hit each month, your change won’t be affecting that many people.
  • Company Goals — However, it’s also important to layer on the metrics that matter to your company in your decisions. If your team is focused on driving up paid accounts and revenue over total user growth, then it might make sense to do some more bottom of the funnel experiments. If growth at all costs is your strategic goal, then activation and acquisition may be more important than getting people to pay.
  • Common Sense — You may be looking for better advice here, but the reality is that you’ll have a good feel for what might have the most impact by looking at the numbers. This gets harder as you pick off the low hanging fruit, but to start, it will be pretty obvious what are big win opportunities. For example, if you notice that nearly 50% of your visitors view your signup page but only 5% of those people actually sign up, that’s a big opportunity.

Tools diagram

Image from First Round Review article about selecting tools.

Investigate the Problem

Now that you’ve picked your funnel step to focus on, the next thing to do is to really dig into that problem. Why are people abandoning the signup page? Do we send them there too soon? Are they concerned about pricing? Is it too bare bones to be persuasive? To actually answer these questions, you should do what all good product people know to do: talk to your customers, stupid!

This is where qualitative tools come in. There are a few simple tactics for gathering more information about a customer problem.

  • Playback sessions — See where users are clicking and where they are getting stuck. Heatmaps are also helpful for this.
  • Live chat — Pop up a chat window on the affected screens or pages. See what questions customers ask, or even reach out to them proactively.
  • Surveys — Similar to a live chat, you can pop up little surveys at the bottom of pages to ask tailored questions about the experience.
  • Customer development — Often the most helpful thing to do is pull a list of customers who got stuck in that part of the funnel, and reach out to them directly to have an email chat or a quick call to learn about their experience
  • Cross-company knowledge swap — If you have a dedicated success or sales team, you should ask them about what they’ve been hearing from customers around this issue. Even search through your help desk to see if you can find some tickets that address the issue.

A survey widget

Image of Qualaroo’s survey widget.

Set Benchmarks and Goals

Before you dive into creating ideas to test, you need to do one quick thing. First, take note of the baseline — what conversion rate are you starting from? Then, set a goal for what you want to accomplish.

Setting goals will help you define ahead of time what a “winning” experiment is.

Brainstorm and Test Solutions

With the problems identified and your goals set, now it’s time to brainstorm experiments to push those conversion rates up. Maybe adding more social proof to the signup page will help. Or perhaps, drive people to the pricing page before the signup page might improve total conversions.

To capture and prioritize your ideas, we’ve seen teams use GrowthHackers’ new product Projects, Trello, or other project management tools effectively.

A simple way to prioritize ideas is to rank each idea based on potential impact and time to execute. You’ll want to crank through the ideas with high potential impact and low time investment first, then move on to others.

Optimizely, Visual Website Optimizer, Leanplum, and Apptimize are popular tools for running A/B tests.

Pro tip: At the start, an experiment might look like it’s winning early, but make sure to wait until you hit statistical significance until you make the change permanent.

See If Your Ideas Worked

Once you’ve let your experiment run long enough, go back to your analytics tools to see if your experiments worked. Did you hit your goal for improving the conversion rate?

If you got close, you’ll want to implement the change and perhaps move on to your next growth idea to up that same number. Many growth teams focus on moving up a single funnel step with a series of small experiments before moving on to the next!

Rinse and Repeat

Learning the steps behind optimizing your funnel isn’t hard. The trick is sticking to the process.

data, data, and more data

Image from Avinash Kaushik’s blog.

You can’t just use quantitative data to evaluate drop offs and measure performance improvements. If you want to achieve truly powerful lifts, you need to talk to your customers as well. They will tell you what’s going wrong and give you the best ideas for how to improve the experience. Collecting qualitative data is just as important as using a quantitative lense to approach problem solving and funnel optimization.

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