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It’s not so complicated: Tracking your customer funnel to fuel your growth
- “Which marketing channel should we put more money into and which should we cut back on?”
- “How much did that last campaign we launched generate in revenue for us?”
- “Which feature should our development team work on next to increase our growth most?”
- “Which customers is our product resonating with and how do we find more like them?”
If you can already answer these types of questions with the proof to back up your claims, you’re in great shape.
If you can’t, however, then one of the most useful ways to find those answers so that you can confidently push forward with your growth strategy, is by analyzing your user funnel.
In this episode, you’ll hear about:
- customer funnel tracking at startups vs mature companies
- starting simple and not trying to get too much too fast
- converting your customers’ journey into fuel for your growth
- retention tracking through cohort analysis
- how segmentation relates to customer funnel
- Google Analytics, for tracking metrics across your website
- Mixpanel, as a tool that’s a little more advanced with analytics
- Mode, if you’re a bigger organization with some dedicated data science team members
And all these in less than 13 min.
Nick Schwinghamer: Hi everybody, I’m Nick Schwinghamer. I’ve worked in a bunch of tech companies throughout my career. And today I’m going to talk to you a little bit about customer funnel tracking and why it’s so important to fuel your growth.
Spyros Tsoukalas: Nick, welcome to the GrowthMentor Podcast. I’m a big fan of your work. And I’m excited to talk with you about one of my personal weak points as well, customer funnel tracking. So.
Nick Schwinghamer: Amazing. Happy to be here.
Spyros Tsoukalas: So could you tell us something we don’t know about customer funnel tracking?
Nick Schwinghamer: Definitely. Customer funnel tracking is a super important and often overlooked kind of way to measure how your product is performing and your users are interacting with it. I would go as far as to say it’s the most important and most versatile set of reports that you want to create as a growth person. When you’re getting started thinking about how to grow your company. This is super important to help you simplify the metrics that you want to look at. So there’s usually 1000 KPIs you can look at. This helps you boil it down to the ones that are most relevant to helping your business grow. It’ll help you prioritise the work that you need to do to focus on that growth and giving you laser focus on like which stage of the customer journey that you want to really target so that you can maximise your growth. And it will also help a lot with internal alignment as well. Customer funnel tracking is probably the most powerful tool that I’ve seen to align marketing efforts and the product and engineering teams so that everybody’s pulling in the same direction, and really pushing to get as much growth as possible. And of course, this all comes from the user’s perspective, which is the way you should be doing everything. So all that makes customer funnel tracking one of my favourite approaches to grow your company.
Spyros Tsoukalas: The enthusiasm that you have whilee sharing these answers, like make me like want to learn more from you.
Nick Schwinghamer: Yeah.
Spyros Tsoukalas: So, how is customer funding tracking different at startups? And like more mature companies like we can compare them at various stages?
Nick Schwinghamer: Totally. It’s a great question. I’ve had the experience, luckily of working both that startup that was just getting off the ground, as well as a big company in Shopify, that was well defined and already had a lot in place. And there’s quite a big difference between the approaches and customer funnel tracking. I think at the highest level, the biggest difference is the amount of time to implement and get insights is quite different, as well as the complexity. And so by that, I mean, when you’re at a startup, there’s far fewer people involved, maybe this is the first version of tracking that you’re putting in place, you’re using basic tools, maybe like Google Analytics, and getting something up and running is relatively quick, relatively easy. And just getting that initial snapshot of your customer funnel provides you a wealth of data and a ton of insight. You’re probably also a smaller team, maybe a one person show on the product and marketing side thinking about growth. So you don’t have to convince nearly as many people of what the right answer looks like before you get moving. And so you can get going quite a bit faster. That being said, on the flip side, when you’re at a larger company, the amount of resources that you can throw behind this stuff is significantly greater. So the product might be more complicated, there might be more users, your data stack might be more complicated to set up. But on the flip side, you have a lot more information coming in from the number of customers that are going through your product flows, as well as the depth of insight in your analytics that allows you to really mind the information to get super deep insights about how you actually want to improve your product experience. So some trade offs there. Speed versus depth, I think is kind of the main trade off.
Spyros Tsoukalas: It was very, very clear. And like I think you summarised, like I don’t know the answer to this question. But like, there was so much value in like, 90 seconds or so. And given all those experiences you have had both startups and Shopify, what are the most common mistakes that you have seen people doing around customer funnel tracking?
Nick Schwinghamer: Yeah, customer funnel tracking can be pretty daunting, I think to people that haven’t used it before, and are not sure what the most important components of it are. And so some of the most common mistakes that I’ve seen in the companies that I’ve worked with and talk to is trying to do too much too fast. I think that’s number one. So there’s a version of a customer funnel, which might be super simple, something like go to a website, then sign up to an account, then put in your credit card, and then keep coming back. That’s like a really basic version of a funnel. But maybe somebody thinks that they need to have every page that they view every step along the way, and try to get all that data right up front. That’s going to take way more time to implement. And when you get the data back, you may find out that half of it was irrelevant or you want to change what you’re tracking. So I think one of the common things I would suggest to people is start with a simple version of your customer funnel, and then go deeper and deeper into that funnel as you start to learn where you want to get more insight instead of trying to get it perfect right off the bat. I think that’s probably the most common mistake I see to be honest.
Spyros Tsoukalas: Thanks for explaining it with so many details. So, from what I have understood all these data and like, as you said, it’s the most important first set of reports that somebody can a company can deal with can fuel your growth. Would you elaborate on that direction?
Nick Schwinghamer: 100%. So customer funnel tracking as a quick recap is really like an analytical way for you to understand all the steps that your customers have to go through in order to use your product effectively, or to get end up paying you for your services. So for E-commerce site, maybe it’s they land on your website, they check out a product page, they go through the checkout, and actually pay you and then do they come back and buy more things from you. That’s generally how you would view that customer experience. And if you don’t have a good understanding of where in that process, people are getting stuck, as in, maybe they just land on your landing page and disappear. Or maybe they’re actually getting all of their products into the cart, but then they disappear. Those details are super important in understanding where to spend your time to get that additional growth. And so what a funnel customer funnel does is it allows you to define those key steps in the customer journey, put some tracking around them. And then you can start to say like, Oh, hey, look, this step people are really successful in they’re getting to our webpage and checking out the products, but maybe at this step where they’re going to add it to cart not nearly as many people do that. And when you have that kind of insight, you’re able to go deeper into the product and start asking some questions about why that might be the case. So if you find people aren’t adding it to cart, maybe you talk to some users or you talk to your team, and you realise that your product page isn’t very informative. Maybe you need to add some videos, or maybe you need to add some better description. Things like a free shipping policy might get people to buy things like a better return policy. Whatever it happens to be, you can understand why your customers are taking behaviour through a little bit of research and digging. And then you’re able to put that into action, launch some features that are going to improve those problems. And hopefully, you’ll see less friction along the customer journey and allow your growth to increase exponentially as you go along.
Spyros Tsoukalas: And where does cohort analysis come into play while analysing all these data?
Nick Schwinghamer: Cohort analysis is a really well known method of analysis as well. It’s mostly used for retention tracking and trying to understand once people are in your product do they stick around, or they continue to do more. So there’s a lot of parallels in the types of uses for customer funnel tracking, retention is an important part of your customer funnel as well. And the other key component of the cohort analysis is that it’s really time based, you’re typically looking at people that come to your product or use your product, within a certain window. Let’s say every month, you say the people that started in January, let’s track if they’re still coming back in February or March or whatever. Customer funnel tracking is a good kind of parallel tool that allows you to look at things like okay, in March, were people converting at a higher rate than they were in April or whatever the case is. And both of them should be used in conjunction with each other understanding. Are you getting better over time? And is this something that your experiments are improving? Or do you need to take a look and say, You know what these experiments actually aren’t helping at all.
Spyros Tsoukalas: So Nick, great, but how do all those things that have been explaining so far relate with tracking that’s usually linked to the growth channels that startups or companies usually use?
Nick Schwinghamer: Yeah, 100%. So customer funnel tracking is one of the most powerful ways that you can use to look at your data across a number of different factors. And for marketers, typically, one of the areas that you’re going to be looking at is did this specific growth channel like Facebook ads or LinkedIn ads, or your SEO work? Did that actually generate customers that came to the website and not only landed there, but stuck around and paid us and all that kind of stuff. So what segment segmentation of your customer funnel allows you to do is break down all those key steps of the user journey by where people came from. So if you’re a marketer, you’re like, I put $1,000 into Facebook ads, how many of those people came to the website, how many people checked out the product page, how many people added to cart, and you can compare that against other channels. So maybe you would say Facebook, people convert really well and they end up buying from us. But people through LinkedIn ads don’t convert well at all. With that kind of information, you can do things like decide to increase the percentage of your budget that goes to Facebook instead of LinkedIn. Or you can make product tweaks and working with your product team that says maybe we make a LinkedIn specific landing page to help those people convert better and end up driving more revenue for us. But either way, breaking it down by marketing channel is really effective. You can also do similar things based on the campaign like maybe you have a back to school campaign or a Superbowl campaign. You can compare how those campaigns are performing against each other and use that to make better decisions about the types of campaigns you want to launch in the future. And this segmentation idea can be expanded beyond just marketing channels and campaigns and you can use it to break down pretty much any segment of the customers that you’re looking at. Whether it’s for example, the geography that the customers came from. Whether it’s the language they’re speaking, maybe it’s the type of product they’re buying, it’s your premium product versus your basic product. Anything that you can assign as an attribute to your users, you can break down your funnel from there, and then really start to narrow in on the specific niche you want to optimise for so you get the most out of your efforts.
Spyros Tsoukalas: Thank you for the very detailed answers that you have been sharing with us. Last question for you tonight. Any tools or resources that you would recommend people to look at?
Nick Schwinghamer: Yeah, so as with anything kind of metrics driven, there’s a lot of different options out there. There’s not really specific tools that are built just for customer funnel tracking, but they typically come as one of the set of reports that you can get from those tools. So if you’re just starting out something like Google Analytics will give you more than enough information, you can track your events in there, you can build some reports that will allow you to determine if people are hitting certain milestones. If you want to go one step above and do a little bit more advanced, I’ve really enjoyed using a tool like Mixpanel that allows you to code custom events in there and have a little bit more granularity and the way that your reporting is set up. A little bit more customizable. And then if you’re going full, all the way customizable, there’s more pro tools that are like using a dashboard like Mode or something like that, which would allow you to take your data from whatever data source you have, and then just put it on a customizable dashboard. So kind of three levels there Google Analytics, Mixpanel, or something like Mode. Those are the tools that I would probably suggest. Failing all that, even just a basic spreadsheet works to be honest.
Spyros Tsoukalas: Nick, thank you very much for joining us tonight to discuss about customer funnel tracking and I hope that the audience or the listeners will enjoy the episode as much as I did.
Nick Schwinghamer: My pleasure. Thanks for having me.
In this episode
I’ve got a wide range of leadership experience across product, growth, partnerships, operations and engineering teams in companies large and small. I co-founded a company that was acquired, was an early employee at a now public company, and helped Shopify grow into a world leader.
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