Why is it called a funnel report? - Simple, because it looks like a funnel. There is a lot of traffic on the top, but it narrows down as we move down the funnel.
What is our Aim? - Everyone knows what every business wants - Acquisitions !! More and more customers !!
This is a sample funnel report showing all the funnel metrics from visits to Acquisitions of a banking website's credit card acquisition.
627M visits and 23M application starts led to 3.9M acquisitions. I cannot say if it is good or bad, that totally depends on the goal the company has set, all I would say that it is a decent figure though there is still a lot of scope for improvement. So lets see how to read, understand and interpret the above funnel report.
- More visits to the website can lead to more conversions
As per 2012 Stats around 2.4 billion people use Internet. You might be aiming for all these 2.4 billion users to be your customers but for now lets come back to the real world and understand that an easy way to get customers is to catch hold of prospects. A prospect landing on your website tells that he/she has an affinity towards a product being sold on your website, so it is much easier to lure them to buy your product than to attract a person who has no clue about you.
Just in case if you are wondering who prospects are, Prospects are the visitors who visit your website but are not engaged with you i.e. they have done no business with you.
Question - How will I get more prospects?
Answer - Good Marketing, Advertising, Campaigns, better website design etc. You can get some idea about it from this post Who visits your website?
- Right product shown to the right person at the right time increases Application starts
Some websites make visitors follow the "3I step - I came , I puked, I left". Such website can hardly lead to conversion. Our aim is to convert every visit into a conversion. Promote your aces, provide offers, customize your website based on your visitor, make the visitors feel special. Make it a lethal combination of all these and no one can stop your visitor from clicking on that Green "Apply" button and buying your product.
- Decrease Abandonment rates, Increase Application Completions
Abandonment rate is one of the depressing metrics of all. Imagine, you got a visitor on your website and you were able to lure him to start applying for one of your credit cards and he finally clicks on the flashy "Apply Now" button and yikes!! you present him a lengthy and never-ending application form.
No doubt you will face an abandonment rate of around 60-80% easily in such cases and if your abandonment rate is more than 30% then its time to pack-off your website designer and your web analyst. Abandonment rate = 1 - (Applications completions/Application Starts)
Keep your application abandonment rate under check. Lesser the is abandonment rate, more the applications submitted. Read this to how we can bring down the abandonment rate - Depressing metric abandonment rate
- Target the right segment to increase application approvals
Life's complicated especially in banking sector. With the new card act you cannot be partial towards a segment of visitors, everyone is to be treated equally. Life would have been much easier if you were able to target only a certain set of people for a particular product, who you know are eligible for it.
Alas, now every time you promote a product, people from every segment apply. Every application processed has a cost attached to it irrespective of application approval or decline. That means, by attracting wrong set of visitors we are increasing the cost while not generating revenue or increasing customer base :(
But, there are subtle ways of targeting people if not directly breaking the card act.
For example, if the TV ad shows - "a lady flying premiere airways First class using her credit card miles, then checking-in to a 7 star hotel using her card to get a discount and free access to golf course" would never catch my attention, as I cannot relate myself to that lady. while, if the TV ad shows - "a lady using no-annual fee credit card, receiving reward points for paying utility bills online or while shopping, and redeeming rewards at a grocery store" would surely catch my attention if I am need of a credit card. So, design and promote the product or create offers in such a way which gain attention of only the segment with certain lifestyle or the segment who are eligible for this product.
Finally summarizing the points listed above along with some analytics world jargon,
So, this is the funnel report which will be a darling to every person from an analyst to the product marketing manager. Every change made to the website or product effects this report directly, either positively thus increasing your pay or negatively making you learn from your mistake.
But, there are subtle ways of targeting people if not directly breaking the card act.
For example, if the TV ad shows - "a lady flying premiere airways First class using her credit card miles, then checking-in to a 7 star hotel using her card to get a discount and free access to golf course" would never catch my attention, as I cannot relate myself to that lady. while, if the TV ad shows - "a lady using no-annual fee credit card, receiving reward points for paying utility bills online or while shopping, and redeeming rewards at a grocery store" would surely catch my attention if I am need of a credit card. So, design and promote the product or create offers in such a way which gain attention of only the segment with certain lifestyle or the segment who are eligible for this product.
Finally summarizing the points listed above along with some analytics world jargon,
- Visits and Application Starts are called the upper funnel metrics. Increasing these upper funnel metrics is the best way to increase acquisitions. More the people visiting the website, more will be the applications and more will be the acquisitions.
- Application Submits is called mid-funnel metric. Increasing this metric value by decreasing the abandonment rate helps in increasing acquisitions.
- Application approvals or acquisitions is called the Lower Funnel metric. This metrics makes sense mostly in financial sector were applications get rejected unlike retail store where they will be no rejections for checkout of cart.
- Widening your eligibility criteria to increase approvals might look like a shortcut to increasing your acquisitions, but your Risk team will never let you do that.
- All you can do is to increase the upper funnel metrics & mid-funnel metrics in-turn increasing the acquisitions.
So, this is the funnel report which will be a darling to every person from an analyst to the product marketing manager. Every change made to the website or product effects this report directly, either positively thus increasing your pay or negatively making you learn from your mistake.
