Lesson: Sales Funnel Optimization with Hiten Shah

Step #3 Funnel Optimization: How do you optimize your sales funnel for your product?

You're already setting up a funnel when you create something, especially kind of in the web, taking a web example. If you create a website, there's a funnel there whether you know it or not.

The way you set one up is you just think about what do people need to do. What are the steps they need to take? It's obvious when it's a funnel when you know that if someone does one step, not all of those people that do that step end up doing the next step, because you have drop-off.

When you feel like you have customers that are going to come and interact with your business, you should think about your business as a funnel, and that's when you should instrument it. So before you actually launch something, I would instrument a funnel. Otherwise you're not going to understand what people are doing.

Like an ecommerce site, people visit the site, so that's step one. Then they end up somehow getting to a product page. That's step two. These are just high level sort of funnel steps. Then step three would be they actually purchase and put in their credit card. Any ecommerce site has that funnel. No matter which one you look at, it looks like that. There might be things that happen in between, but those are the high level steps in a funnel.

So, whether you know it or not, you've already set up a funnel. When is the right time to go and measure your funnel in your business, and what are you going to do with that measurement?

As your business grows you might have more steps in your funnel. But I would more focus on thinking about how to make the steps or the processes or the things that people do in your business, like the things that they have to go through, which is basically a funnel, how do you make it better for them? How do you make more people get to steps that are deeper in your funnel?

I think, over time, what actually evolves is not necessarily your funnel, but the efficiency of it and how you manage your funnel.

Depending on the makeup of your business and what's most important in the business, you're going to focus on different parts of your funnel. A lot of people might think I need to set aside an hour a day and look at my funnel or make it better.

The way I look at it is more like the funnel just helps you identify what's the most important part of your business that you need to work on and make better. So where is there a bottleneck? Every funnel I have ever seen there's always one bottleneck.

Find a way to ask people on the product pages, that are viewing them, why they aren't purchasing yet. Or even a little bit lighter, and that might even be more insightful, there are a lot of little tools that will do little pop-ups on the bottom and things like that, but basically ask them the question: "Is there some information missing on this page, yes or no?" If they say yes, "What?" If they say no, you just say, "Thank you. Great, there's nothing missing"

If you're really into funnel optimization and have the resources to do that and do A/B testing, that can inform the A/B test you run on your product pages.

If you're not tracking a funnel, it's like you're driving a car blind, and you can't really drive your car blind. So you need a funnel. You need key metrics associated with your funnel. That's just like step one.

The analogy I would give is if I've got my hands over my eyes, then I am unable to even see what's going on in front of me, which would be like what's going on with my business. Once I take my hands out of my eyes, I might even be able to actually start the car and start driving. When it comes to your business, you can't accelerate or make progress in it unless you're actually optimizing the funnel, but you first need to be able to see it. After you see it, you want to be optimizing it, and that will allow you to accelerate the car essentially. If the business is your car, then optimizing a funnel means you're trying to make improvements, so you're trying to get better.

There's a lot of talk these days about growth hacking, and so everyone adds hacking to everything. I would say that there are some people that say it's funnel hacking. I think it's just funnel optimization, which is hacks allow you to make improvements. But then they might not be hacks. They're just improvements.