When to prioritise funnel optimisation opportunities?
The most common Growth ideas or hacks that you will come across, belong to funnel optimisation bucket. They can be:
☞ Trying out a different content/ad format (e.g. video instead of images; short videos instead of long videos, etc.)
☞ Tweaking the flow of website or app (e.g. changing the landing page; adding a payment method, etc.)
☞ Changing the onboarding or post-transaction flow (e.g. adding a tool walkthrough; changing copy of the first email sent to a new customer, etc.)
While these opportunities are low-hanging ideas, and may deliver quick wins in terms of an improved funnel, let's review when they are appropriate solutions and when they are not.
When not to prioritise them
When the business is either in very early stages and product-market fit is yet to be proved.
It is common for startups to fret about new channel ideas and 'growth hacks', when either a clear ICP is yet to emerge, or a clear value proposition is yet to emerge for their product/service.
However, funnel optimisation cannot solve this problem, and ideas from this bucket should not be prioritised in such a stage.
Conversely, at late stage of a business, opportunity for such quick wins is already gone.
That is to say, while it might be tempting when new to a late stage startup to re-do their website or email flow, for example, they might not be the most needle-moving ideas at that scale.
When to prioritise them
Funnel optimisation opportunities are best at product-market-channel & growth stage of an internet business.
When multiple such opportunities are present, and you cannot work on all of them due to resource constraints, the ones with most upside can be identified through:
1. Benchmarking (internal & external)
2. Customer feedback (reactive & proactive)
For the first, you can take the current value of your funnel metrics (cost of impression, channel click rate, conversion rate, retention rate, etc.) and see how much upside they have against either the historical best for the same business, or other businesses in the same category.
For the second, you can go through feedback of prospective & existing customers (i.e. reactive process), as well as approach a sample of them proactively to understand the biggest bottlenecks. This process can reveal the biggest funnel optimisation opportunities at that stage of the business.