Where in the funnel should I focus?
A free video tutorial from Lloyd Alexander
Growth Marketer at Udemy
4.8 instructor rating • 1 course • 9,622 students
Learn more from the full courseGrowth Marketing Strategy: Master Growth with the Funnel
Learn how to grow any business systematically. Acquire, retain, and monetize customers like top Silicon Valley startups.
01:20:06 of on-demand video • Updated December 2018
- How to use the funnel framework to systematically approach growth problems
- How to identify the biggest opportunities that will grow your business today
- How to break down business goals into actionable inputs that you can impact now
- Methods for increasing traffic, retaining customers, and driving revenue
- How to analyze viral growth and build a powerful referral program
- How to create a spreadsheet model to predict future business growth
- Quantitative research methods such as cohort analysis and user segmentation
- Qualitative research methods for understanding customer behavior
- How to calculate important business metrics like CAC, LTV, and payback period
English [Auto] OK. You learned about the five steps of the marketing funnel but where in the funnel should you focus to find that you need to determine what your top line goal is. What is the number one goal of your business. Above all else take a moment to think about that right now. OK. Now what if I ask you to improve that metric right now. Would you know where to start. Probably not. It's probably a little overwhelming. So let's let's look at an example. Let's say that your a subscription SAS business and your top line goal is monthly recurring revenue coming from customers. That's a big goal. So if we break that down we can see that monthly recurring revenue is made up of new customer revenue in a given month plus existing customer revenue in a given month. And we can further break down new customer revenue into number of fleets times your lead conversion rate times the average monthly spend of those new customers. Then we can further break down leads into the amount of traffic coming to your website every month. Times your visitor conversion rate into elite existing customer revenue is made up of the number of customers you already have which is related to new customers coming in. Your retention rate and their average monthly spend. So this diagram here is called a Gold tree and its really useful because it allows us to see where all the inputs into a big lofty goal are metrics at the top are more important to us but they're much harder to impact. It's pretty hard to figure out how we might impact monthly recurring revenue in any given month. However on the bottom metrics like traffic and in of itself are super important to the business but it's pretty easy to come up with ways to increase traffic in a given month. So where do these metrics fall into the funnel. So if we see that traffic is a problem for us right now we know that we should be looking at that through an acquisition lens visitor conversion rate would be more of an activation problem. Retention of course retention problem metrics like average monthly spend and lead conversion rate we can start to use revenue playbook items to address that. And finally referral is going to be influencing traffic because more of our customers are inviting their friends then that's going to increase our traffic. So you have all these inputs but what should you prioritize. One way to do this is by using the ice model developed by Sean Ellis so that stands for impact competence and effort for impact. Think about what is the current state of some of these metrics and how much do you think you can realistically improve them. This is going to take a lot of of intuition also what's the ceiling on any impertinent sometimes when you work on improving a certain metric you get diminishing returns as you try to improve it further. For confidence think about how likely it is that you'll be successful in improving the metric by doing X Y or Z. Sometimes you're trying something new and novel and you're not sure if it's going to work. You should factor this in to your decision. Finally for effort think about the resources required to have a meaningful impact on this metric. And how long it will take. Sometimes something will require so much effort that you'd rather just focus on more low hanging fruit that will show results in a shorter amount of time. Finally we can build a quantitative model to see what would happen to our top line metric if we were to impact some of these inputs over the next six to 12 months. Let's take a look.