Startup marketing: A client who disappeared at the bottom of a funnel and why pay too much attention to traffic is dangerous for your business

Greetings to you, dear Habrasoobschestvo. Attracting and retaining customers is the most important business task. So I want to share with you a translation of the material written by Rob Walling. The information will be useful both for startups, and for those who have already achieved certain results. .

Part 1: The client who disappeared at the bottom of the funnel

Speaking recently with one of the participants of the Micropreneur Academy, I realized: the guys in startups consider the increase in traffic and the increase in conversion an exciting game. However, if the proposed service is regular, it is necessary to remember about the next stage - retaining existing users.
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If you spend all your time optimizing sales funnels, it's no wonder that you can ignore customer feedback. In addition, it is difficult to properly prioritize what to do next — to continue to engage in traffic and conversion or to focus on creating new product opportunities.

Of course, traffic and conversion are the sources of business growth, but often the addition of new functionality is more significant than the concentration on sales than, in fact, sales. I wrote a lot about marketing and sales, because these are key moments of success, but in the case of a regular service, a compromise must be reached between increasing traffic and making existing customers happy.

In order to better understand this circumstance, I decided to imagine the clients who had refused the service as disappeared at the bottom of the sales funnel.

Third circle

When we use the sales funnel model, the key metrics are traffic (how many people hit the upper part of the funnel) and conversion (how many people fell through it further).
You get traffic through SEO, AdWords, blogs, tweets, social networks and other well-known techniques. Take care of traffic now in fashion.

You can improve conversion by conducting a series of A / B testing. But if you have a regular service, and you have made incredible efforts to convince someone to buy it, it will be painfully painful if this someone refuses from the service in a month.

Life at the bottom of the funnel

Suppose, for example, that you provide a SaaS application.
Since you thoroughly researched this business niche and made the correct list for mailing, your launch went brilliantly, and in the first week you have several subscribers. You have high-quality sources of traffic, therefore, you have a high conversion rate. Such chances to attract customers, as at the time of launch, you will no longer appear. The first two laps you went through.

And the strange thing: you almost immediately began to receive user requests about the need to add functionality. However, when you started with the minimum set of opportunities to start earning and receiving feedback faster, you were ready for such requests, and in this sense everything is just fine.
But then you can ruin everything. We can say that the first 1-2 months after launch is a critical period during which you will have to twist the letter "sic" and satisfy as many requests for new functionality as possible - otherwise you will start losing customers at the very bottom of your funnel.

And it turns out that you caught the traffic and turned it into customers only so that it could then flow away in the form of people who were disappointed in you.

To admit this is worse than not cope with the increase in conversion. Each client who left you because of dissatisfaction with the functionality (or for another specific reason) is your time and effort that you put into directing a person to your site and turning it into a client. Imagine that if you have a conversion of 1%, then every lost client is like 100 people who, as it were, would not come to you. Just cross out this part of the traffic from your logs.
How to think about it - a tear wraps up.

Decision

The solution is to first imagine that this has happened, and to start taking measures to prevent the diversion of customers in advance. Adding new key features and thus retaining most existing customers is the best solution.
If you imagine that customers abandon the service as the third circle, the third level of your sales funnel, it becomes easier to understand that the success of your enterprise depends on activity at each of the stages, and if something is “flowing” somewhere, then the whole system will be ineffective. If you cannot send a potential client to the funnel, you will never sell him anything. If you cannot convince some of your potential customers to advance inside your funnel, you will never sell them anything. And if you can’t stop a customer leak at the bottom of the funnel, your business will become extinct as an unsuccessful evolution experiment.

And you tried so hard when you created traffic and conjured over its transformation! And all in vain ... Plug the same flow at the bottom of your funnel!

Part 2: Why paying too much attention to traffic is dangerous for your business.

Here is a great exercise for you: find a start-up and ask him the following:

“What are the 3 key approaches you use to find customers?”

The most common answers you get are search engine optimization, AdWords, blogging, podcasts, and possibly social networks. These are quite good answers - such methods will really attract a significant amount of traffic to your site.

Then ask about their next step:

“After you get traffic to your site, how do you turn visitors into customers?”

And after this question, you usually see surprised looks, a shrug and awkward smiles. Most people starting their online business only think about how to drive traffic, and almost none of them think about improving conversion rates. Why it happens?

Good marketing looks easy.

The most likely reason is that good marketing, like good design, looks easy. So simple that it is almost invisible.

Good marketing is when you are amazed enough with the marketing message to get your hard earned money out of your pocket. In such a situation, I am sure you have no idea how they made you get a credit card. If you think about it, then surely you didn’t get it right away.

Good marketing, as a rule, does not look like marketing at all. I have been reading Joel’s software literature for 8 years and have been a paid user of FogBugz for about 4 years, and I have never felt that they make money on me because they do it skillfully. So skillfully that with the naked eye it is even imperceptible.

Therefore, most people believe that good marketing is very easy. Approximately how to see a good site design that seems as simple and straightforward as possible. Often people think: “I can do that too, just add some text, highlight it in a special font and put a plus”. But it turns out quite differently.
Typically, designers start with more complex designs and spend a lot of time making it concise and “uncomplicated”. To achieve this effect is not easy.
To create your own high conversion website, you need to understand that you have to put a lot of effort into creating a website that would really convince users to buy.

Another reason why most people focus on traffic rather than conversion is that they talk a lot about traffic. For every 50 books or blogs about SEO or AdWords, there is only one source dedicated to increasing conversion rates. Almost everyone writes about traffic, so it is not surprising that they attach such great importance to it.

Traffic is entertaining. Conversion - hardly

In fact, traffic generation is a very entertaining and enjoyable process. I understand that this sounds weird, but attracting decent traffic is not only very pleasant, but also an achievement that can be seen immediately.

Generating and measuring traffic is pretty easy. Many tactics are described by various authors and bloggers, and, following their advice, you will be able to attract hundreds of visitors to your site very quickly. Also, you can almost instantly see the fruits of your efforts using special applications. And you get instant job satisfaction.
With conversion everything is exactly the opposite. It takes an enormous amount of time to conduct A / B testing, and it is enough to spend enough of them to increase conversion significantly. Increasing your conversion rate requires tremendous patience, foresight, and a certain amount of attention — more than watching a video on YouTube. For many people, this is simply not the case.

So what is the answer?

Since I have already launched and optimized sites, this process has become almost template for me. Every website starts with almost zero traffic. Then a bit of marketing - and the traffic appears, however, the conversion rate remains terribly low. Conversion is never done from the beginning.

So, you have a certain amount of traffic, you have managed to implement several sales, and what to do next? Most start-up Internet entrepreneurs think: “We need to attract more traffic.” Incorrect answer.

The correct answer is to work on increasing your conversion rate before you start spending more time and money to drive traffic.

On non-optimized selling sites, the conversion rate is usually in the range of 0.1-0.5%. You will have to attract really a lot of traffic to start earning with such a low conversion. Compare with the situation on optimized sites that have a conversion rate between 0.7 and 4% (depending on price category and traffic quality).

Therefore, you have a choice: double the traffic or double the conversion rate. I have gone through this many times and I’m ready to assure you that increasing the conversion rate will cost much less and increase your sales in the long run much more significantly than driving traffic. Especially if we are talking about completely non-optimized sites that are easiest to work with and see progress.

However, almost no one uses this approach.

In fact, I always start doing this a little later. Usually, I stop all active efforts to generate traffic to a low conversion site long before I start to increase conversion rates using A / B testing.

Usually the process of working with traffic and conversion is as follows:

1. Attract some traffic. A few hundred visitors a month, maybe thousands.
2. Improve the conversion rate.
3. Generate additional traffic.
4. Work a little more on your conversion rate.
5. Traffic again.
6. Spend your retirement years in the Bahamas.

Note: I have not reached stage 6 yet. However, I witnessed how the conversion increased 10 times after A / B testing.

Naturally, as you attract more and more traffic to the site throughout its existence, your earnings, of course, will also grow.