The Social Network, apart from being an entertaining movie, reminded me of those times we all spend hacking into the wee hours of the morning, trying to get that website off the ground, finishing one last feature before submitting to our exhaustion, changing the world with software. Software engineers, not unlike other professionals, are passionate about solving mind numbingly challenging problems. But Software Engineers, how often have you hacked on a new website or product that didn’t see the usage and adoption you’d hoped for? It’s happened a lot, right? You’re not able to communicate your vision, attract press to share your idea with the world, and motivate customers to use your product or service. So what’s the solution? How can engineers get the market traction they know their product can achieve? The answer is marketing. And today I’m pleased to kick off a blog series about marketing essentials for startups and small engineering teams. The intention of this series is to help engineers understand how they can spend five hours per week to improve their marketing efforts. To introduce this series we’re starting with perhaps the most fundamental marketing construct, the customer funnel.
The Customer Funnel
Marketing is the practice of converting an unaware human into a customer of a product. Marketing goals differ slightly depending on the product: a website like Facebook strives to attract more users and keep those users engaged; Atlassian drives product sales and renewals; and Rovio wants more Angry Bird downloads. Though goals may be different across products, the same general marketing advice can apply to all software engineering teams. The most common marketing construct that applies to all companies is the customer funnel, sometimes referred to as the “sales funnel” or simply the “funnel.” The funnel describes the steps a user will take in their journey to become converted to a customer. Throughout this series we’ll constantly refer back to the funnel, seeing how specific marketing efforts can influence the funnel. And once the series is finished we’ll provide a nice overview graphic of the funnel and its relation to said marketing efforts. But for now let’s talk about the funnel. Displayed below is a basic example funnel that a software product company might have.
The funnel has a few characteristics that are worth highlighting. First, at the top of the funnel are users that are not curious about your product or service. Perhaps they haven’t heard of you, or perhaps they haven’t done diligence to learn exactly what you do. On the other side, the bottom of the funnel are customers that have downloaded your app, created an account on your website, purchased your product, or performed an action that helps your company profit. For product companies like Atlassian the very bottom of the funnel is to repeat sales through license renewals and cross sales. The goal of any company is to drive as many users at the top of the funnel to become customers at the bottom of the funnel. As you move down the funnel the number of users at each stage decreases, which is why our model is a funnel and not a cylinder.
Define and Measure Your Funnel
A company’s customer funnel is its vocabulary for understanding marketing. Start by defining your funnel. Immediately you’ll begin to realize that perhaps new steps can be introduced to drive conversion, or perhaps new efforts can be made to take users from your website to an evaluation. Then try to create a dashboard that measures your funnel. Google Analytics, KISS metrics, and Mixpanel are all good tools for measuring your funnel and building a dashboard.
By measuring a customer funnel–actually calculating numbers for each stage–a company can begin to optimize their marketing approach to drive more users down the funnel. For example, Atlassian learned with data that smaller software teams weren’t using our products because they couldn’t afford to–we saw tons of traffic to our product pages (e.g., Jira) but relatively few purchasers. Atlassian introduced the starter license program and immediately saw a monstrous growth in the number of teams using our products. Similarly, Atlassian has invested a lot of resources in making our products dead simple to evaluate. To drive even more website visitors to become customers we introduced an intermediate step for evaluation. Evaluations have allowed us to convert more website visitors to customers. And within the evaluation step we’re constantly trying new ways to drive evaluations and to convert evaluators to customers. We’re always experimenting with our “Try now” buttons, sending useful emails to evaluators, and doing whatever we can to move customers from a web visit to a purchase. Much more to come about evaluation emails and “Try now” buttons in this series.
Your Five Hours of Marketing This Week
Throughout this blog series we’ll provide a list of actionable bullets a startup or engineering team can try to tackle in five hours per week. So today’s actionable list is:
- Define your funnel: create a diagram of what your funnel looks like, print the diagram, and post it on your wall. Make each step of the funnel concrete–instead of “Awareness” list the mechanisms your company uses to grow awareness. Perhaps something like this:
- Measure your funnel: understand how many users are at each step of your funnel so you can understand where your marketing efforts can be focused
- Set goals: set quarterly and yearly goals for each step in your funnel, incentivizing your company to convert users to customers. For example, if you see a large drop off between Consideration and Evaluation, choose a target drop off and aim your marketing efforts at hitting that target
This blog series will focus on individual marketing practices such as events, PR, product marketing, email campaigns, and lead generation, describing how each practice relates back to the overall funnel. In each blog we’ll highlight the most important focus areas, share war stories, and provide recommendations for how a small team can most effectively spend five hours a week on marketing. To follow along grab the Marketing Essentials category RSS feed, or just continue to follow the Atlassian news blog.
Next week we’ll see how to do awesome product marketing, allowing you to communicate your product more effectively, and ultimately drive more visits, downloads, or sales.
And tell us what you’d like to read!
If you have suggestions, questions, or even concerns about our advice then please let us know via a comment. This blog series is written to help you market your product better. So be a part of that advice and get involved.
Photo credit: ilmungo
Update: take a look at the conclusion post to get comprehensive marketing advice for startups and small teams.