Growth Hacking Your Funnel From Top to Bottom

A marketing and sales funnel has multiple stages:

• Suspects: names of people in our target market segments that we would like to market or sell to.
• Prospects: people who have expressed an interest in our product or service, e.g they attended our webinar or asked to speak to a sales person (aka marketing qualified leads or MQLs).
• Opportunities: prospects that have been qualified by sales using a methodology such as BANT (the prospect has a defined Budget, Authority, Need, and Timeline).
• Customers: active, paying customers​.

Tracking your funnel is the single most important analytical tool to planning and visualizing the health of your marketing and sales strategy at any given moment. It’s scandalous how many companies don’t actually talk about the business in terms of their funnel, or only look at certain segments of the funnel (like top-of-funnel "leads"), or simply don't track valid funnel data. Without good visualization of the funnel, you're operating blind! ​

​Let’s look at each stage of the funnel and see what kind of growth and conversion principles we can apply.

SUSPECTS (TARGET MARKETS, TARGET PERSONAS)

Who are the people that can't live without your product? Why is the product a must-have for them?

​And what is the difference between these must-have users compared to other users for whom it's just a nice-to-have? 

Start by answering 5 simple questions:

• what title(s) do we expect the target buyer to have? (CEO, VP Marketing, Owner, etc.)
• what is the buyer's problem that we solve? how would they express it, using their language?
• how does the buyer solve their problem today? Sometimes there's no solution to the problem, but often there are substitutes that are 'good enough' until the right solution comes along.
• how urgent is the buyer's problem? why?
• what is the best place that we can reach the buyer? (on social media, e-mail, phone, via a channel partner or industry influencer, etc.)

Of course, you need to have the correct answers to those questions, which can only come from primary and secondary market research including talking to real people using product-market fit interviews. For a quick start on how to define and refine your target markets and identify the real personas, see Identify Your "Must-Have" Customers. 

MARKET SEGMENTATION PITFALLS:

• Target market is the whole world, or something way too broad. “We sell to the CIO”. It can also be a statement that masquerades as targeting, ie. “Our solution is aimed at large enterprises in financial, manufacturing, automotive and healthcare.” but really this is still the whole world.
• Target markets for the wrong reasons. We're going after X segment because investor / CEO / partner wants to, because the competition is doing it, because it's got a lot of funding this year, etc. without validating that we have something meaningful to bring.
• Stopping at the target market without defining the real person. Target markets are a useful starting point. But who is the actual person you are selling to and what is their urgent, pervasive problem that they will pay you to solve? Targeting “Canadian rural hospitals who have a need to digitally transform” is a start, but go deeper. Are you talking to the CEO, the CIO, or the Director of IT? What is their pain, and how would they express it in their language?​​

Once you have your targets, now ask - how can I get 100 names of people to reach out directly to? 

• Ask friends, colleagues, partners for referrals
• Find names through company research online, then cold outreach to those people via social media or even direct e-mail introductions
• Find a partner whose audience you can reach via co-marketing
• Go to a conference and speak, and arrange meetings with attendees while there
• Host a webinar
• Network at a small event like a CIO roundtable
• Go to online forums (e.g. reddit) and engage with people who would be prospects for your business

Read more: ​Awesome product in a crowded market? 5 ways to cut through the noise.

PROSPECTS (TOP OF FUNNEL)
Assuming you found the right Suspects and were able to get in front of them via events, direct marketing, partners, etc. the next question is how do I convert as many to Prospects as possible, ie. get them to reach out and express an interest in buying something. This is done by explaining your offer in a variety of ways: a website that describes that problems you solve and how you solve them, practical advice and expertise delivered via blog, webinar, or podcast, marketing promotions and advertisements, press releases, joint partner marketing, and direct sales.

All of these conversion tactics rely on one thing: having compelling content.

Most common pitfalls when trying to convert suspects into prospects / MQLs:

1. Content / promotion doen't identify problems that the target persona can relate to​
2. Content / promotion is saying the same thing as all the competitors (no differentiator)
3. Messaging is not clear and concise, full of jargon, or purposefully trying to sound more complex to impress
4. Mismatching content format to the audience. For example you may put out all your content on video, overlooking that the target persona prefers whitepapers they can print out and read 
5. Great promotion, tiny audience. Lots of time promoting new content to social media, blog and direct marketing but to a tiny number of followers. You’ll just end up exhausting your tiny audience
6. Too much focus on SEO ‘hacks’. Yes there are SEO principles to keep in mind (make your website mobile-first, follow Google UX principles, make content authoritative and 2000+ words, etc.) but too much focus on rigging keywords and other unnatural shaping of content will detract from simply producing useful, practical content.

If you're a marketing leader, get clear on who in your company is the market expert? Who understands the target personas, their big unsolved problems, what their buying habits are, where they buy, who they consult when making a purchasing decision, what a day-in-the-life of the persona looks like, etc.  Is it the product manager? The marketing manager? Sales? The VP? Sometimes you will find that in the day-to-day busy-ness, no one is the marketing expert! That's a problem to tackle head on.

If you are the business owner of a startup, then get ready because the market expert is you! You cannot delegate this to marketing.

Whatever you do, test all content and messaging that goes out with a lightweight focus group. This step is so critical. This is now a standard in product design, we do ‘usability testing’ before releasing a new product, so why not the same for marketing? Before you roll out a new campaign out to the world – check it with a few friendlies outside of your company who will give an unbiased opinion.

OPPORTUNITIES (MIDDLE OF FUNNEL)
Marketing often thinks that once the lead is handed off to sales, it’s now sales’ job to convert that lead to an opportunity, and if they are not successful, well they’re just not selling hard enough! Not only is it not collaborative, but it very well could have been that the lead was wrong to begin with and this is something marketing should want to know about so they can refine. Marketing and sales must work together at every stage of the funnel.

Another pitfall is thinking that the way to get conversion is to re-arrange your website to drive prospects towards the "sign up" button. But prospects are not helpless. If they are interested, they will find your "sign up" button. 

So here is the real litmus test. The problem you are solving must be:

1. urgent
2. pervasive
3. important enough that people will pay money to solve it.​

Customers won’t pay for something unless it the problem is urgent and they can get sign-off to buy in their fiscal year. Of course, the problem you identify has to be pervasive across a big enough group of customers so that you can build a repeatable business. ​But most of all, the problem has to be important enough that the person would actually invest their time and money to solve it. People don’t easily part with their money, or their time. They won’t even waste their time browsing your website unless your tagline indicates clear potential of solving a specific problem. They won’t spend time convincing their organization and their CFO to invest unless they are truly motivated to solve something big.

If you feel strongly that you are solving the an urgent, pervasive problem, the best way to showcase it is with a demo or free trial. The free trial experience has become a must in the SaaS world, and increasingly an industry standard as it begins providing value right away and allows you to track and gain insight into users' behaviour toward conversion. Look up product-led growth (PLG) to understand more about how to create a world-class free trial that drives conversion.  

Read more: ​Every lead that didn't convert is a learning opportunity.

CUSTOMERS
This is where things get really interesting. What is your growth strategy with existing customers? Selling something additional to existing customers is the fastest path to revenue. You have a trust relationship there already, you have procurement already in place i.e. contracts, approved vendor list, etc. and you have a captive audience who will tell you all about their problems and what they need and will pay for.

Yet many teams are so focused on growing the top of the funnel that they shortchange existing customer growth.

Stage 2's Science of Scaling calls it out bluntly: "Startup failure is unnecessarily high due to a premature obsession with top line revenue growth [...] We don’t prioritize customer retention. We are obsessed, almost out of the gate, with revenue growth. And it’s killing our businesses."

Paul Graham from Y-combinator emphasizes this further:

You should take extraordinary measures not just to acquire users, but also to make them happy. For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them.

Over-engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups it's a necessary part of the feedback loop that makes the product good.

I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy.

10 Things You Can Do Right Now To Improve Customer Retention and Growth:

1. Visit every major customer in person or via Zoom
2. Answer any support requests via phone and in less than 1 hour
3. Track an NPS (or CES) metric
4. Prioritize new feature requests (and monetize them)
5. Uncover what other problems they have that you could solve
6. For startups: "Pick a single customer and act as if you are a consultant building something just for that one user. The initial user serves as the form for your mold; keep tweaking till you fit their needs perfectly, and you'll usually find you've made something other users want too."
7. ​Find out how else you can improve the customer experience beyond just the product (e.g. the level of service, local presence, integration into other products)
8. Ask for a positive online review
9. Ask for referrals
10. Set up a customer review board or industry panel

Read more: Who Knows Customer Pain Points? Customer Success Knows.