Startup Growth Series

How to build marketing funnels and push your startup to hyper-drive growth

Credit: Ibukun Onitiju

Ibukun is director of digital strategy & marketing at Ringier Digital Marketing Africa: one of the biggest Internet platforms in Africa. Before RDM, Ibukun started his personal blog MindAndMouth where he discusses faith, productivity and business topics. He is an expert on sales, conversion optimization and marketing funnel development.

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Many startup founders have wrong belief.

Thinking that if they build a good product, people will definitely use it.

They are awed by the sophistication of their new product or service and wrongly assume that their target audience is falling over themselves to access their solution.

Don’t fall into that same trap.

Instead, let me show you a better way to get new users to discover your business.

To make the lesson very practical, I will use a fictitious startup company called ​ ‘Do Little Inc.’ ​ to explain my point.

Meet "Do Little Inc."

Our fictitious company, Do Little Inc., is a startup company that just released a software solution that helps financial institutions generate rapid reports about their customer spending, so they could offer them more high interest credit.

The solution is:

  1. A software as a Service (SaaS) i.e. it runs online with no physical servers required at the user’s site. You only need internet access, username and password to use the software.
  2. Do Little Inc. offers both monthly and yearly subscription payments.

After developing their unique software solution, ​ Do Little Inc. can do what After developing their unique software solution, ​ Do Little Inc. can do what most startups end up doing, which is:

● Make a lot of noise using PR to create awareness
● Push the brand using expensive brand placement ideas
● Run adverts on all available Digital Marketing Channels.
● Get pumped up by the amount of ‘noise’ they are making

And then they finally realize no one has signed up for their ‘awesome’ software despite their BIG MARKETING strategy and growth hacks.

Within 12 months, ​ Do Little Inc shuts down.

By the way, this happens to most startups who failed to use  marketing equation secret.

Marketing equation secret = build a marketing funnel

Marketing funnel is a critical part of every successful startup.

It comprises of two major activities.

It starts with (1) profiling your ideal potential customers and (2) secondly, identifying your customer journey to sale.

Here’s how to build one for ‘Do Little Inc’

(A) STEP 1: PROFILING YOUR IDEAL CUSTOMER

The profile of your ideal customer shows you understand who the ‘potential customers’ for your business are going to be.

This is called customer avatar.

Your customer avatars are the primary audience you should be targeting with your awareness campaign. It informs you of the places you need to be present to “make noise” and target your ad spend.

A typical customer avatar can look this:

++++++++++

Gender: ​ Male

Age range:​ 35 – 45 years,

Position: CEO of a Money lending company focusing on lending money to working class and employed people.

Goals:​ Wants to grow his business using technology and customer insight

Challenges: Hates manual processes, difficult to gather information about spending habits, does not know how to find customers who will borrow money and pay back.

Sources of information: Visits sites like Bloomberg, FT, Forbes, Business Day, Sahara Reporters. Reads motivational books, Enjoys evenings in a bar.

Sport Interests:​ Lawn Tennis and Golf.

++++++++++

 

(B) STEP 2: IDENTIFYING YOUR CUSTOMER JOURNEY TO SALE

Before you design your marketing funnel, the most important question to ask is, ​ “What steps do you think a customer will go through to pay for your product?”

(This funnel represents it)

Here’s what I’ve come up with for Do Little Inc:

● Potential Customers initially hear about the product.
● They visit Do Little’s website.
● They sign up for an account to try out the software.
● They log in again a handful of times over the next few weeks.
● Finally they make a purchase.
● Then they refer a few friends.

Let's break this down in details:

Stage 1: Awareness Stage

This gives your target audience top of mind awareness about you and your product / service. You can achieve this with:

● PR
● Traditional and Digital Advertising
○  Billboards.
○ Adverts in Papers.
○ TV Commercials.
○ SEO (Search Engine Optimisation).
○ Display Ads / PPC.
● Content Creation.
○ Blog posts (e.g. 3 Ways to know how much [the working class] spends monthly.)
○ Social Media Post.

Stage 2: Consideration Stage

In Do Little’s case, unless a potential customer visits the website, they are most likely not considering this software.

So it is important that Do Little drives a lot of visit to their website so that potential customers can get information about their software solution and how it can help them solve an identified problem ​ (what is in it for customers)​ .

Once on the website, Do Little must give what the potential customer needs in order to consider their solution. This can be achieved through:

  1. A responsive and well-designed website that builds trust and authority.
  2. Good website copy.
  3. Highlighting features of the products and more importantly benefits to the customer.
  4. Case studies of successful use cases.
  5. Social Proof through endorsements, testimonials or PR features in news media.

Stage 3: Conversion (Part 1)

To ease the customer journey, Do Little can entice their potential customers with a risk free 14 days trial of the software.

This then means on the front end, the conversion that matters is how many people sign up for the trial account.

This can be achieved through:

● Bold buttons to the Free Trial.
● Clear Copy promoting the free trial.
● Free Trial as an option on the payments page.

See an example from FreshBooks

Stage 3: Conversion (Part 2)

After signing up for the free trial,

The next step is that"Do Little" can create automated follow up email sequences.

These are series of emails that drives the user to sign in to the software as much as possible within the 14 days trials.

It is predictable that if the user visits the app often, this will create a ‘use habit’ and almost guarantee the user turns into a paying customer.

This can be achieved through:

● Asking the user to set up their account fully.
● Connect other applications they currently use.
● Run their first report and get customer insight.

This image from Kissmetrics sums it up.

It shows how many users you need to drive to your product before you get your paying users.

What did you notice from the image ?

2,615 people visited the website and only 13 people became paying customer.

Figures like this (called conversion numbers) helps you to optimize each stage of customer interactions in order to make you the most revenue.

Stage 4: Loyalty Stage

Do you still remember the pricing model for Do Little?

They offer monthly and yearly subscriptions.

With a loyalty program, the yearly subscription can be discounted e.g. “pay yearly and get 2 months free”. This can be offered to customers at the point of upgrade to maximize profit.

Note that loyalty program should be design NOT to lose you money, BUT To even make more money, increase cash flow and create loyal customers.

Stage 5: Advocacy Stage

The entire business model of Do Little will come crashing if all they have is a bad product.

No amount of marketing will make a bad product good.

It is very important that:

● The product is good.
● Customer service is excellent
● Customer feedback is appreciated and responded to quickly.
● An overall customer experience is good.

If your product meets the conditions above, customers will likely become brand ambassadors.

In addition, you can incentivize your customers for spreading the word about
your product.

DropBox is most famous for this.

Conclusion.

Our hypothetical company ​ Do Little Inc., shows how to create a simple market funnel that puts into consideration how your potential customer will end up buying from you.

You too can create a simple funnel for your own business to guarantee revenues.

When you fail to clearly map out the journey you want potential customer to follow, it is very difficult to match marketing efforts to revenue realization.

Make sure you do this before spending a ‘kobo’ on marketing.

In the next lesson ...

In lesson 4, you will learn the key financial metrics you should pay attention to in your startup business. There are some you can track yourself manually or with free online tools (see lesson for recommended tools)

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