Hello and welcome to the bottom-up skills podcast. I'm Mike Parsons the CEO of Qualitance and we are now in our second installment of this series where I highlight. My favorite product strategy tools. And this one we're going to use the full marketing funnel sometimes called the growth marketing funnel.
It has all sorts of nicknames, but you get the gist is all about the marketing funnel done completely a to Z. Now, the reason that this matters so much is that traditional marketing is often obsessed with just the very top of the funnel, you know, sort of customer acquisition. So. The key thing that traditional marketing is all about is reach and frequency, blasting the message to as many people as many times as possible.
However, what we've seen the emergence of is a fully integrated entire funnel approach, which has been really brought by this [00:01:00] kind of movement around growth hacking growth marketing. And what it does is it follows the whole user journey. Completely. And what it does is it focuses on the conversion between the steps.
So not only are you looking big picture, very broad, but then you also go deep, which is what's so great about for marketing funnel. As a tool is you get really into the nitty-gritty of conversion optimization, testing and validation. So. The reason this growth marketing funnel matters so much, is it really helps you go way beyond traditional marketing to ensure that marketing is contributing to a healthy business.
It really dives in and tackles. The question of is it cost effective the way we're acquiring customers right through to the viral coefficient. That is how many [00:02:00] times your existing customers. Refer to new customers. How many times they share the experience and become your greatest advocates. So what at the heart of this is going to happen at the very heart of a growth marketing funnel will mean that marketing people not only get the customers in the door, but they can make a dramatic contribution to the very product.
Itself. And I think this is enormously powerful because let's be honest, the marketing people and the product people haven't traditionally hung out throughout the entire industrial age, it tends to be marketing, build the product and they knock on the marketing door and said, Hey, you better go launch this quickly.
Go find me a customer for this problem. This solution. So what I want you to do imagine that this growth marketing funnel really steps up the game for them marketing. This is how marketing can really contribute way beyond customers and [00:03:00] actually really be a central hub of a thriving product, service or business.
Okay. I've set the bar pretty high haven't I, well, let's go through the six main parts of the funnel, and then let's look at this as sort of the thinking behind each. So the funnel starts with three A's and ends with three R's. This is when you put it all together, it sounds like are. And that's why it is sometimes called pirate metrics, which was a name famously given by David McCullough.
Let's have a look at these three A's and then these three RS at the very top of the funnel is awareness. How many people recall no are familiar with your name and brand, then there's acquisition. That's actually having some meaningful, inter direct interaction with them. Then you need to activate them, which is all about getting them activated in the door of your store.
Trialing [00:04:00] testing. Experiencing some product or service. And then there's a question of revenue and retention, pretty self-explanatory. And one of the key ones, one of the most neglected ones is referral. How often they go out into the world and say, you must try this product. Okay. So awareness acquisition activation, top half of the retention revenue referral, bottom half of the funnel, we're in a good place.
Okay. Let's look at it. Questions that fundamentally get to the essence of each of these. This is the question that leads to the source of improving your conversion rate. So again, what is the fundamental question here? How many people do we reach? Are we getting just is the top of the funnel wide enough?
How many people know us? How many times did we show up when we're indexed on Google, against our given practice? Yes. Acquisition. How many people actually let's use a website as an example? How many people actually come to [00:05:00] our website? So if it gives zillion, people know about us, but our website traffic's really low.
We got some improvement. In acquisition to do. There you go. That's the model starting to work here. Let's go to activation. How many people take the first important step in the relationship with us? Providing an email address right through to a trial or a money back guarantee, starter package, whatever it is now, if you're hugely famous, getting a ton of people to the website, but very few people are activating.
There becomes your focus, elegantly simple, super clear, and really a great way to ask yourself, are we maximizing our opportunity? Then we kind of shift into the thinking the three R's about, are we taking full advantage of the customers that we're acquiring and the customers that we're activating. So, first of [00:06:00] all, it's like how many people are using our product as second or third time?
I mean, this is a key and a lot of startups might do a great job at that top of that funnel. A lot of enterprises could be the same here, but actually very few actually become very active, ongoing customers. You know, that you look at the classic example of this is you work really hard to get people to download your native mobile app from let's say the iOS app store.
You use it once. And then within a couple of months, it hasn't been using gets deleted. This is a very common paradigm in actually the native app universe that after 30 days, app usage decline to essentially a dozen or so key apps. And beyond that, people are not using very much at all. So are you retaining your customers?
Are they staying active then? There's the big Chestnut. How many people stopped paying and how much did they pay? [00:07:00] There's all sorts of great acronyms items you can use here. Cost per customer revenue per customer revenue per user. I mean, it there's a lot here. Key thing here is you could have a lot of customers using the free version of your product, but you're actually getting very few into revenue or you might have people locked in revenue, but the revenue is not growing.
As a, as a gross amount. If you look at on a per individual amount, you might. Have delivered one valuable feature product or service to a customer, but it may have, let's say is 10 10 euros a month, but maybe it's been 10 years a month for weeks, months, maybe years. That's the point that you say, Hey, do we need to like, you know, increase our revenue per user?
Do we need to like, Try getting them to upsell, cross sell. And lastly, [00:08:00] this is the final ask. So the other two eyes retention and revenue, now we get to referral and referral is all about your viral coefficient, the best companies on the planet take Revolut. You're probably seen them close to every customer.
They acquire those customers, acquire refer an advocate to another customer. So. Six big concepts, awareness, acquisition, and activation at the top of the full marketing funnel, retention revenue and referral at the bottom half of the funnel. If you focus on maximizing your conversion rates between all of these steps, you'll have a great thriving business.
You'll be on your way to some. Really good times and viability. Now, if you want to learn not only about viability, feasibility, or making your product extremely desirable, you can go to bottom-up God IO and you'll find everything you need as a product person, whether it's free courses on lean [00:09:00] design, thinking agile so much, we've made it all open source.
So jump into bottom up. You'll get everything you need to build a great product. All right. That's it for the bottom up skills podcast. That's a wrap.
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