Tuesday, November 27, 2012

Marketing Funnel Diagnostics - understanding your customer adoption performance

Now that you understand the Marketing Funnel and how non-customers become customers, let's discuss how you can measure your performance across the six stages of adoption and how that can inform how to improve your customer adoption.

In this post, we'll go over:
  1. How to measure customer adoption
  2. How to calculate customer conversion between stages of the Marketing Funnel
  3. How to identify areas of concern
  4. The importance of Marketing Funnel benchmarks
  5. Why these concepts are important to your company


In order to understand how your company is performing across the Marketing Funnel, you must first track the number of customers in each phase.  Some are easier to measure than others and some industries and products lend themselves to easier measuring than others.

  • Relevant market - the total number of reasonably potential customers.  If you're a landscaper, it might be owners of properties with yards in your metropolitan statistical area (MSA).  If you're an internet retailer it might be everyone in your country or the world.

  • Awareness - the number of potential customers who actually become aware of your existence through advertising, word-of-mouth, and whatever other methods you can conceive.

  • Interest - the number of potential customers who investigate your product further.  You might measure this through the number of hits you get on your informational website or social media presence

  • Evaluation - likely the hardest to measure, the number of potential customers who consider the value of the benefits you are offering.

  • Trial - the number of potential customers who test your product.  If you're selling software, it would be customers who download and run your demo version.  If you're a automobile manufacturer, it's the number of people who come in for test drives.

  • Adoption - the number of potential customers who buy your product and become your customers.  One of the easiest phases to measure.

  • Advocacy - the number of your customers who are actively speaking out on your behalf.  Those doing it via social media will be the easiest to measure


Once you are able to count the customers in each stage of your Marketing Funnel, you can calculate how well you are moving customers from one stage to the next.  By looking across your Marketing Funnel, you can understand where you're achieving greater or lower conversion.


In the example above, your conversion rates from a) trial to adoption and b) adoption to advocacy are the lowest across your funnel and colored red  That might mean you're doing a good job of attracting customers right up until they try your product.  These metrics could suggest that your product's performance is causing customers to lose interest after trial and be disappointed after purchase, discouraging advocacy.  By examining your conversion rates, you can develop hypotheses on how to improve your customer adoption performance.


In the previous example, we assumed you were underperforming in a) trial to adoption and b) adoption to advocacy because those conversion rates were lower than other parts of your Marketing Funnel.  But note what happens when we compare your performance to industry benchmarks you were able to get from your industry's trade association...

Note that your conversion rates are identical in both examples, but now you can use industry benchmarks to reveal your performance relative to the competition.  Even though your performance is exactly the same as in the first example, the data tell a completely different story and you reach very different conclusions. 

Previously, you would've assumed your ability to make customers aware of and interested in your product was good.  Now you see that you're underperforming the competition.  This might mean that your awareness advertising has insufficient reach and the execution in those advertisements is not engaging enough to inspire interest.

What you thought were your weak points - getting customers to adopt and advocate - are now your strengths.  Your performance is more than double that of your competitors.  Before, you might have assumed that you had problems with your product.  Now, you might realize your product is performing great - perhaps you're just in an industry or product category where the customers just aren't that inclined to buy.


Without this type of analysis, it's nearly impossible to say where your conversion issues are.  If you want to improve, you would have to either 1) try to improve conversion across every stage or 2) guess where you're weakest and run the risk of focusing effort in the wrong places.

Once you perform this diagnostic, you can see where you have real strength and where you can stand to improve.  This allows you to focus your resources, take an 80/20 approach and address the few issues that are most responsible for preventing you from selling to more customers.


  1. Sir I found the whole series of Marketing funnel very helpful, it has given me a much broader view to take into consideration, I am working in an entrepreneurial venture of opening E-commerce business, however, I am bit confused with one thing, could you please help me with it..?
    how a person will be able to get data as how their competitors are performing or what are the industry benchmark? what is the best way to accumulate such data.. being a new industry ourself, can we really get benefitted by comparing ourself with competitors like groupon or livingsocial.

    It will be a great help if you satisfy my queries, thanks for your help in advance.

    -Abhishek Tripathi

  2. I think this article will fully complement you article. PLease continue publishing helpful topics like this. Regards, from Always Open Commerce

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