Would you rather optimize the path your visitor will actually take or optimize the path you think he should take?
If you’d rather the former, then there’s something you need to know about linear funnels… they’re not a completely accurate representation of reality. The question is, what should you do about it and what is an accurate representation of reality?
You have to learn to optimize for the modern funnel, which is similar to a tornado. [Tweet It!]
Linear Funnels vs. Tornadoes: What’s the Difference?
Linear funnels are conducive to the traditional customer lifecycle you’re used to hearing about. The user moves from the top of the funnel (awareness) to the bottom (purchase) progressively and predictably.
For example, someone searches for “car insurance” and finds a PPC ad…
After clicking it, they’re taken to the landing page where they click the most dominant call to action…
They’re then taken to a lead capture form, where they fill out all of the information…
Later, they’re contacted by a sales representative and sold on the idea of choosing that specific car insurance company.
Instead, he introduced the concept of tornadoes, which are much less organized, more complex and less predictable.
For example, someone searches for local car insurance and finds thousands of options, but focuses on the top three results first…
All three pages are open in the browser for comparison…
The person compares the landing pages, trying to determine which is the right option for them…
What about motorcycle insurance? Can I just get insurance directly from the insurance companies? What are other people saying about this company? All of these questions lead to pages like this…
Josh suggests that actual customer journeys are much more complex than a linear funnel would indicate.
After the pages above, the visitor might talk to colleagues at work to get their advice and end up purchasing 3 days later. She might turn to social media, look at more car insurance providers, go into the office, read online reviews, sign up for a newsletter first, etc.
Note that tornadoes can extend beyond the purchase. It’s not exclusively about what happens at the top of the funnel. That same visitor might have a bad customer service experience and tell her friends. She might start looking into other brokers, forget to make a payment, etc.
Here’s a good way to visualize the difference between a linear funnel and a tornado…
Awareness -> Evaluation -> Purchase -> Usage -> Repurchase -> Advocacy is an example of a linear funnel. All of the dots associated with each step of the funnel create a tornado.
Are Linear Funnels a Thing of the Past?
Sujan Patel of ContentMarketer.io thinks we’ve gone from 2D to 3D funnels because the decision making process has become more complex…
For Sujan, linear funnels haven’t been “blown to bits” as Josh claims. They’ve merely expanded and become more complex due to external factors that affect the visitor’s purchase decision. With the right analytics tool, you can simplify those factors and track your new, 3D funnel.
David Arnoux of Growth Tribe shares Sujan’s love for linear funnels, but admits they have a major shortcoming…
So, in summary, the pro of the linear funnel is that it’s easy to understand and communicate, and the con is that it’s a bit disconnected from the reality of the modern customer journey.
Here’s a closer look at the customer discovery journey that David mentions…
While McKinsey talks of profound changes…
Marketers have long been aware of profound changes in the way consumers research and buy products. Yet a failure to change the focus of marketing to match that evolution has undermined the core goal of reaching customers at the moments that most influence their purchases. The shift in consumer decision making means that marketers need to adjust their spending and to view the change not as a loss of power over consumers but as an opportunity to be in the right place at the right time, giving them the information and support they need to make the right decisions.
…I’m not convinced their customer decision journey is that drastic of a departure from linear funnels (aside from the fact that it’s presented as a circle).
What is important, though, is that McKinsey focuses on “consumer-driven” marketing. Instead of waiting for you, the marketer, to drive the relationship, consumers are driving the relationship themselves. They don’t necessarily move through the funnel as you intended them to.
Morgan Brown of Inman News shares an opinion similar to David’s…
So, are linear funnels an overly simplified version of reality? Yes. Does it make them a “thing of the past”? Not exactly. They can still be used to communicate growth and optimization to executives, or to foster interdepartmental understanding and goal setting, for example.
But they should not be mistaken for an accurate representation of reality, which is much more complex and messy. When they are, you miss out on crucial points of optimization and growth.
Tornadoes may not be replacing the linear funnel any time soon, but they are a good way to think about that complex, messy reality.
In the words of George E. P. Box, “All models are wrong, but some are useful.”
What Makes Tornadoes More Difficult?
As you can imagine, tornadoes are a bit more difficult to deal with than simple linear funnels. Why? There are two core reasons (among many others): growth attribution and points of optimization.
1. Dealing with Growth Attribution
When asked about whether he believed linear funnels were a thing of the past, Ed Fry of Inbound.org brought up the issue of growth attribution…
If linear funnels were an accurate representation of reality, we could simply know that if Customer X made it to Point B, they came from Point A. Unfortunately, it’s not that easy because, as Ed points out, having so many different acquisition channels, devices, purchase influences, etc. makes it difficult to attribute growth.
Chris Mercer of SeriouslySimpleMarketing.com explains how to address attribution in the wake of tornadoes…
If you’re not already, you should be familiar with UTM tagging. Buffer wrote a great beginner’s guide to UTM tagging, which you should take 5 minutes to read.
2. Dealing with Additional Optimization Points
Another issue is that with tornadoes comes more optimization points. It’s not enough to be focused on “engagement”, for example, you need to focus on all of the elements that go into that step of the funnel.
Here’s David on what you need to keep in mind when optimizing modern funnels…
So, in summary…
- Visitors rarely make purchase decisions on their first visit, which is why retargeting and attribution are paramount. (Only 2% of visitors make a purchase on their first visit, according to AdRoll.)
- Segmentation is more important than ever because you need to understand and optimize a number of different customer paths. (We wrote an extensive article on data segmentation, which you should take a few minutes to read.)
- As the popularity of personalization rises, we may begin to see sites embracing tornadoes and creating unique, fully customized funnels for each visitor.
- Decisions are not always made by a single individual. Your value proposition has to be well-rounded and your funnel has to be accommodating.
At the end of the day, the process is still the same: conduct the research, fix the obvious issues, create hypotheses for the more complex issues, prioritize the hypotheses, run the tests.
What’s different is that you need to mentally move away from the linear funnel concept. Or, at least, move away from the idea that it’s an accurate representation of the behavior of your customers.
As Chris said, be sure to include your Multi-Channel Funnel reports in Google Analytics in your conversion research process. (If you’re unfamiliar with conversion research, you can learn more via the ResearchXL model.) Otherwise, you’re really limiting your ability to optimize effectively.
How Do You Manage Tornadoes?
During his presentation, Josh mentioned something very important…
You’re not throwing years of marketing know-how out the window here. All you’re doing is recognizing that visitors don’t always move through funnels linearly anymore and adjusting your optimization process based on that knowledge.
So, how do you manage tornadoes? The same way you manage linear funnels… with a few tweaks.
1. Identify User Behavior
While there are a number of different classic funnel stages, for this article, we’re going to use Acquisition -> Activation -> Engagement -> Retention -> Resurrection. Anyone who works for a SaaS company will recognize these funnel stage labels, but with a name change, they’re relevant to every industry.
The first step is to understand your users’ behavior with conversion research. There are two core questions you’re looking to answer early on:
- How do users activate and engage? These are high-value optimization points. Where are they coming from? What traits do they share? What paths did they take most often?
- What is healthy user behavior? You want to optimize for this behavior. What are the signs of a healthy, long-lasting user? What do they all have in common?
Once you know this, you’re in a better position to come up with hypotheses for creating healthy user behavior.
You’re likely familiar with Facebook’s 7 friends in 10 days metric, right? It’s called a correlative metric and a lot of different companies use them to optimize for healthy user behavior…
Andrew talks a bit about cohort analysis, which you can learn more about here.
So, once you have that healthy user behavior metric, you can begin to isolate what correlates with that metric. Once you know that, your optimization decisions will be 10x smarter because, well, you know what to optimize for.
2. Analytics and Establishing Benchmarks
Next, you’ll want to set up your analytics configuration. If you’re just getting start with analytics and want to be sure you set up Google Analytics properly, read these…
- Google Analytics 101: How To Configure Google Analytics To Get Actionable Data
- Google Analytics 102: How To Set Up Goals, Segments & Events in Google Analytics
If you Google Analytics already set up, read this…
Obviously, you want to ensure your analytics setup is configured properly. If Peep were writing this, he’d tell you that most are not. Take the time right now to get it right before you continue.
Once you have everything configured properly, you’re looking to answer one question:
- How often are they currently activating and engaging? How often are healthy users activating and engaging? How often are at risk users activating and engaging? How often are users on their way out activating and engaging?
You want to answer this question early on so that (a) you can chart growth and (b) you can recognize poor user states before it’s too late.
Based on your research and analytics, you should create hypotheses to answer these three questions:
- How can you encourage healthy user behavior? Look at your healthy users. How can you create more users like that using your healthy user behavior metric? How can you keep those users healthy?
- How can you get them to activate and engage more? Look at your at risk users. How can you encourage engagement and move them to healthy users?
- How can you prevent them from churning? Look at your transitioning out users. How can you resurrect them? How can you inspire them to show healthy user behavior?
When answering these three questions, think outside the funnel. Don’t paint yourself into an optimization corner by forgetting about the tornado.
Of course, experimentation is about more than three questions, but these are a good place to start if you’re looking for high-value wins and/or insights.
I read a quote from Dillon Allie of HDMZ recently, which I think sums it all up perfectly…
The buyer’s journey is not really a linear path anymore. It’s more about being ready with the content that prospects need when they are making a decision.
Here’s how you can do that…
- While linear funnels are easy to understand and communicate, they are simplified versions of reality. Reality is more like a tornado; users don’t take linear paths.
- Tornadoes mean growth attribution is more difficult, but through proper UTM tagging and your Multi-Channel Funnel reports, you can get a detailed view of actual visitor paths.
- Tornadoes mean more points of optimization, which makes prioritization even more difficult. Segmentation goes a long way because you need to optimize actual visitor paths, not intended visitor paths (i.e. the linear funnel).
- Identify user behavior. Conduct conversion research to answer two questions. How do users activate and engage? What is healthy user behavior? A correlative healthy user behavior metric can help answer the latter.
- Configure your analytics setup properly and establish benchmarks. You should know how often visitors are currently activating and engaging if they’re healthy, at risk or transitioning out.
- Conduct experiments to: encourage healthy user behavior, activate and engage at risk users, and prevent users from churning.