Developing Effective Marketing Funnel For Startups

One of the challenging steps for early-stage teams at a startup or any growing company is to identify the right model and grow sustainably. It seems like it should be the most important priority after product and engineering but surprisingly, it is the least focused area by teams.

This could be delaying growth, missing out on user conversions, ineffective processes, and costing huge for the business.

That’s when funneling makes it easy for startups to track growth. With a proper conversion funnel, teams can track customer behavior, compare user personas, deploy re-marketing strategies and many more details about the customer journey. More essentially, it allows teams to analyze what’s working.

What is a funnel anyway?

Funnels are series of steps that you take make your users take to eventually lead them reach the final destination.

Basically, funnels are a visually mapped customer journey process that allows marketing and engineering teams to identify where customers are coming from, major exit points, the average time taken for premium customers to turn into paid ones and much more.

A proper funnel tailored to the startup requirements can unlock many hidden facts about their customer journeys. One could design funnels to track all sorts of metrics, from sales journey to conversion time-frame.

When to design a funnel?

As soon as the product is launched.

Brian Balfour, the ex VP of Growth at Hubspot and a leading marketer recommends that the teams need to visualize, analyze, and build a lean funnel as soon as possible. Even before spending a penny on marketing activities.

Once the company starts getting traffic on the landing page, it’s better to start designing.

How to build an optimized funnel for your startup?

So, how do you create optimized marketing and sales funnel for your startup?

Before diving into the details, teams need to understand that it depends on the product, market the company is in, average customer journey and many other details.

Most essentially, it is crucial to understand that there is no copying, no duplicating, no exact solution for your product.

Your audience is different, your business model is different, your customer journey is different, your business plan is unique.

The best strategy, in a nutshell, is to create user personas, analyze their behavior, deploy strategies, and reiterate.

Basically, build a funneling machine that suits your startup

However, there are few standard frameworks that can be tweaked to the particular business model. Remember, it is a standard template designed for ease. One of them is AARRR which stands for Acquisition, Activation, Retention, Referral, Revenue. This model is quite known and used by some large tech companies like Uber, Pinterest and more.

Here is a quick guide to building an effective funnel:


  • Create user personas: User personas are the imaginary customer personas created by product teams that are closely related to the audience the business is targeting towards. Creating user personas is crucial as it gives an intuition of what sort of customer a business can expect.
  • Precise user personas help teams create stories around the users, identify best distribution channels, evaluate user behaviors, find the correct product-channel-fit, and more details about the customer’s journey.
  • Identify product-channel-fit: Product-channel-fit is the distribution channel best suited for the type of product the startup is offering. Basically, it’s finding the most optimized distribution stream for your business to acquire new customers.
  • Not all channels suit all types of businesses. B2B products have higher customer acquisition costs, therefore will require a different strategy than B2C products like social media platforms.
  • Again, there will be details that teams will need to dig into and determine details like network effects, virality, about their products. This allows them to build deployment strategies faster. Further explanation on these will require another topic in itself.

The funnel:

Initial Acquisition:
This stage is where teams need to identify where their high-quality traffic will be coming from, their product content fit, product channel fit to track and maximize the marketing spend.

This allows teams to systematically plan, generate and distribute content or deploy sales teams to the right environment depending on the type of product and the audience.

So the acquisition plan start working and the landing page, socials, forms starts getting traffic. What now?

Now the goal is to check if the landing page is optimized to fit the audience visiting. Whether adequate information is there, if theme combination is right for the audience, track CTR, APT, whether UI/UX is clean or has any issues, and more. Remember, the goal of this stage is to observe how teams can direct customers to the end goal within the lowest possible clicks.

Now a lot of the results will be based on A/B testing features and contents before the teams find what works. Teams will need to dig around, identify strengths and play around with the data collected to optimize their journey. This is one of the important steps in the customer journey as it determines the first impression of the product for the audience.

The goal of this stage in the funnel is to collect much as user behavior data from Activation, review and build strategies to reach out to the customers. Either through email or paid ads re marketing, whatever stream the team has derived from the strategy.

Ideally, teams build jars of different customers naming warm, hot, cold audiences derived from their website engagement and behaviors. Different tailored campaigns are deployed to get these audiences to their target goal. Again, testing different approaches and tracking results is very important to maximize returns on marketing activities.

Now that teams have tried all A/B testing, integrations, different angles and found working methodologies, it is time to track the final stages.

What made them sign up? What triggered them to try the demo? How did they find the demo?

This stage allows teams to collect data and analyze precise steps their audience are taking leading towards the goal. It gives them further insights about their customer journeys that help to tweak user stories and adapt to a strategy that will work.

Normally teams create another funnel out of this stage like the retention funnel to tap into customers and increase user interactions.

The final stage is to identify how teams can leverage the power of referrals and utilize users to help the product grow. Referrals are one of the best growth strategies that should be in the pipelines of all growth teams as the model enjoys the power of seamless distribution at the lowest cost. Also, the conversion rates are higher with referrals as it is specifically distributed by customers who love the product.

The goal of this stage for teams is to find ways to get users to refer. It could be monetary rewards or unlocking premium features if they successfully refer to someone.

Again, this is normally what most product conversion funnel looks like from a high-level view. Teams can only use it as a rough framework and customize it to their own product requirements.

Adapting to growth

The funnel progresses and iterates as the product grows. If it’s not changing, then the team is doing something wrong.

As the product grows, adds new features, taps new markets, the user’s stories also alters and changes are required. The initial funnel was based on intuition, now the teams have access to all the data they want.

It’s obvious the funnel should be iterated and tweaked based on the data.

But how do you do it? How do teams keep up with the rapid changes and reduce the risk?

Design an iteration model. An iteration machine that updates its features as it grows.

Think about it like software that where it keeps getting feature updates.

For ease of understanding, I have designed a model as shown in the picture above that teams can use to update their funnels regularly. This 4-step process can help anyone to quickly brainstorm, analyze and tweak their funnels.

  • Brainstorm:
    Brainstorm new angles to distribute the product. Take collected data, analyze, visualize and brainstorm creative ways to reach out to the audience.
  • Deploy:
    Once the team generate and collect ideas, deploy additional features and changes quickly. Features such as content migration, landing-page optimization and test them for a certain time frame.
  • Evaluate:
    Evaluate the results from changes applied. Compare results from different changes and assess progress or regress caused by the changes made.
  • Reiterate:
    Refine the funnel according to the conclusions made from previous steps.

Quick Tip

Set specific milestones:
Most teams get lost improvising their product and managing other aspects, especially during the early stage that they lose track & overlook the customer journey. This could be solved by setting specific time frames to test and track metrics.

While testing changes, teams can set a month to test and by the end of the month, they can evaluate the metrics achieved, compare and build strategies for the next month.



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