The idea of sales funnels is nothing new. They exist within every business model. However, in the digital age, sales funnels have become a fundamental visual matrix to understand consumer behavior and improve overall sales. If you are an online or digital marketer yourself, you might already have your own funnel set up in Google Analytics. In this post, I would try to touch upon the fundamental use of funnels and multi-channel funnels along with their applications to make your app more profitable.
If you are just getting a hang of things related to app/web analytics or not aware about funnels, let me give you a simple example.
An example of a goal funnel in Google Analytics
Here’s a sales funnel for a hotel booking website. You can add a number of pages to create your funnel. More pages mean more steps in your funnel. This funnel has a total of three steps. The red portion in each step shows the number of users who dropped off and did not go further into the funnel. The red part is undesirable and a marketer’s job is to reduce that as much as possible.
Why use a sales funnel?
Marketers use funnels to reduce these red portions. Every step of the funnel is analyzed for their drop off rates. Then, the respective pages (where users are dropping off in large numbers) are optimized. These optimizations can be related to content changes, technical upgradations or anything that is preventing users from going further into the funnel. Here, I can conclude — since a lot of people are leaving the booking page without making a transaction, I can assume, that either the hotel does not have enough rooms or the prices are not favorable.
You can see that a funnel has a specified path of pages. This is relevant when your site has a single description page, a button for ‘add to cart’ and then a sale. But often this is not the case. A site can have numerous pages. All these pages can serve as the point of entry for an arbitrary user, ultimately navigating to the Goal Completion page. Same applies for apps. An In-app purchase can happen from any level in a mobile game or app.
Now, if users often enter from multiple places that are not a part of the existing funnel, how do you record their behavior? This is where multi-channel Funnel comes into play.
Multi-Channel sales Funnels- A step further
Marketers are obsessed with Goal completion page(s) most of the time and it is natural to do so. However, as discussed there can be multiple pages that may allow your users to make a sale other than your specified funnel. In such a situation, you employ multi-channel funnels. When you see that there are 2–3 paths in the site or app, leading to a lot of goal completion, you start optimizing them. These pages or app events may not be a part of your existing funnel. But after you find out that they are indeed important, you may include them in the existing funnel or create a new one altogether.
For example, consider that our site gets a lot of inquiries from the portfolio page.
An arbitrary Funnel for our site
However, let’s say I discovered that a lot of traffic from technology blog is directed to the portfolio page and then to the enquiry page and finally the ‘thankyou’ page making a sale. I also observe that when users come from portfolio to an enquiry, 5 out of 10 users drop off. On the other hand when users come via blog, that is, blog>>>Portfolio>>>Enquiry>>>Thank You, I see only 3 out of 10 people drop off.
This suggests that the users routed from the blog are more valuable. Being a Digital Marketer my job is to understand what is making it happen. Can I further increase it by any means?
Multi-channel funnels are extremely useful for companies like us that have many interlinked web pages with differing purchase intentions. It is also applicable when you are drawing users from a large number of channels. For example- an e-commerce site getting users from PPCs, Banner ads, organic search, QR codes and various other channels. Here the user can enter from any medium as stated and may generate a sale.
Funnels are extremely useful for mobile apps and games-
In-app purchase within apps and games have become the fundamental mode of revenue generation. Monetization strategy of apps and games often involve ’n’ number of steps for users to make an in-app purchase. Let’s keep goal completion here to in-app purchase itself and figure out how funnels play out in the entire process.
Consider a game similar to Candy Crush with IAP pop-ups valued at $0.99 and $1.99.You can see for yourself that pop-ups for 10 moves have appeared fewer times than the pop-ups for 3 moves. However, it can also be seen that the IAP offering 10 moves has a higher conversion rate. Obviously, the idea of more for less is working here. As a game developer, I would increase the impression of the pop up with 10 lives. I might also decrease the unit price of this pop-up and see if more user buys it.
In a game similar to candy crush you can monitor a lot of events. Funnels, when employed perfectly in games can unearth a lot of valuable data helping you to increase revenues, engagement and retention.
The power of consolidated data-
Continuing the same example, I also keep an eye on the analytics part and observe that some of the levels are causing a lot of drop-offs. Of these, let’s say that level 5 is causing a lot of drop-offs. A lot of users are deleting the game as they are not able to complete the level for its difficulty. Also, 25–30% of the weekly revenues come from users who have crossed level 5.
I can’t let these users go. What should I do? Shall I decrease the difficulty for level 5? Well, looks like a lot of changes should be made. Maybe design and programming to need to be tweaked followed by some testing as well. Now, that sounds like a lot of time, money and resources.
This is where I can apply my findings from the funnel. Instead of doing all the hard work and take risks, I would simply tweak the programming a bit to increase the number of impressions of the pop-up for 10 moves on level 5. Or I may also give some free moves on level 5 as well. So now, the users do not get stuck on the 5th level and the revenues that lie beyond level 5 can be extracted too.
A sales funnel is a great tool that has been in use since quite a while. An increasing hunger for app analytics in the recent times have only increased their value. As compared to the web, monetization pathways in apps are more pronounced and specific. This is where the right funnels in your app can enlighten you in ways you could never imagine. Not only you can increase your revenues, but also figure out features that you want to update in future and a lot of other things too. Together with Cohort Analysis, you can have everything that you need to know about your mobile app/game.
What do you think about your sales funnel? Have you been able to unearth hidden loopholes and bottlenecks that hindered monetization in your app. Drop in your experience and suggestions below!
Originally published at www.openxcell.com on September 17, 2015.
