By optimizing your product funnel, you can turn user satisfaction into organic growth. People will get to know your product and then be seamlessly pushed through each stage of the funnel until they become loyal users who promote your product to others.
This frees up your team to focus on innovation and scaling, rather than solely on acquiring and nurturing new customers. As your product gains traction through word-of-mouth and positive user experiences, your team can concentrate on refining features, expanding functionalities, and exploring new market opportunities.
To achieve this, however, you need a full understanding of how the product funnel works and which strategies you need to implement to overcome obstacles at each stage.
That’s what we explore in this article, looking at examples of excellent product funnel strategies and showcasing how the right product analytics platform can help you continuously improve the user journey.
What is the product funnel?
A product funnel is a tool that explores how your users interact with your product at every stage of their journey. It’s important to note that throughout this article we are referring to the product funnel (or user funnel) as opposed to the product development funnel which outlines the stages of creating a new product.
The stages of a product funnel are defined slightly differently in different models but cover these key stages which we explore in further detail below:
- Awareness
- Interest
- Consideration
- Intent
- Evaluation
- Acquisition, retention & referral
Product funnels are important for PLG (product-led growth) companies because they provide a complete overview of the user journey, helping your entire team spot roadblocks and growth opportunities. You can move away from marketing, sales, and support strategies that aren’t working and instead make more data-driven decisions that start with the product itself.
How to build an effective product funnel at every stage
In this section, we explore the stages of the product funnel and look at common roadblocks and areas of optimization for each.
1. Awareness
At the awareness stage, potential users come to hear of your product through initiatives like content creation, app store optimization, and community engagement to encourage organic growth.
Marketers are mostly concerned with this stage. However, the product team has a clear role to play in helping them understand product differentiation. Right from the beginning of a new product development funnel, your whole team needs to be able to clearly communicate to prospective users what sets your product apart from competitors.
This involves utilizing data-driven strategies to define and attract your ideal customer profile. You need to craft a unique value proposition that addresses specific customer pain points and highlights your product’s distinct features and benefits.
2. Interest
Within product-led growth, the interest stage refers to the point at which potential users become genuinely intrigued by the product and start to consider how it might meet their needs. Typically this happens when they’ve consumed enough content to understand the product’s key features and benefits and can envision how it can address their specific problems.
A lack of social proof and credibility can be a roadblock at this stage. Potential users often look for validation from existing customers or industry-specific expertise before making a commitment. So one of the best strategies here is to ensure that they are presented with sufficient social proof. Product teams can support this through rigorous testing, consistent updates, and transparent communication about product improvements.
3. Consideration
Once a user has signed up for a freemium version or free trial of your product, they are in the consideration stage. This means that they are actively evaluating whether your product or service meets their needs and whether it provides enough value to justify a purchase.
The main obstacle here is making sure the user has all the information they need to understand the value of your product without feeling bombarded with content. Within a sales-assisted funnel, this is where you will bring in representatives to help with conversions.
Another effective strategy is to use a product analytics platform like NetSpring to create a personalized onboarding process. By bringing data from your warehouse right alongside your product data (without the need for data duplication and potential inaccuracies) you can tailor onboarding steps based on user behavior across channels. For example, you could send an email reminder for inactive users to complete their profile 3 weeks after they signed up.
4. Intent
Once a user has engaged with your product and understands its features, they move to the intent phase. Here they delve deeper into evaluating your product’s capabilities to assess it further.
At this stage, friction from within the product is usually the main thing that prevents users from moving on to the next step. You can remedy this with simplified processes and clear support. Product analytics tools prove invaluable again here because you can use them to identify where users are dropping off.
Customer journey analytics also allow you to build a picture of how likely individuals are to buy. By looking at the features they use and the product-related content they consume, you can gauge which stage they are at and what their concerns and focuses are. From here, your team might decide to focus on more targeted marketing efforts.
5. Evaluation
At the evaluation stage, your users will already have interacted with your product and they’re deciding to make a purchase. Here you are tasked with the mission of finding the perfect version of your product for them or, in the case of a solution with only one paid plan, emphasizing the return on investment generally.
At this stage, it’s important to present users with information or features they’ve not seen before. Using the same marketing tactics is unlikely to push them over the line. You could instead, for example, offer a feature that’s not in the freemium version.
6. Acquisition, retention, and referral
After someone has made a purchase inside your product, they move to the acquisition stage. From here, you should continue to analyze their journey until they become a loyal user and promoter of your solution. This means:
- Delivering a high-quality experience where you continuously tailor support, marketing, and features to the user’s specific needs and preferences using product data.
- Understanding retention metrics to identify patterns and behaviors that indicate long-term satisfaction and testing strategies to encourage more engagement.
- Encouraging referrals through rewards such as discounts on future purchases and exclusive access to new features or content.
By encouraging users to keep returning to your product and to suggest it to others, you can transform them into brand advocates who help your solution to scale organically.
An optimized product funnel example
Let’s take a look at how a product funnel with a strategy informed by a product analytics platform like NetSpring could work:
- At the awareness stage, marketers and product teams are focused on making the product more discoverable through top-of-funnel content like SEO blogs and videos showing how the solution works. The whole company has united to clearly show the product differentiators.
- To push users through the interest stage, the team needs to show them social proof as evidence of how the solution could transform their workflows. To optimize their approach, they could segment users based on their interactions with marketing campaigns and provide tailored marketing materials.
- At the consideration stage, where the user has signed up for a free trial, the team will provide a personalized onboarding experience with data collected from NetSpring. Information about their initial experiences in the app will inform the customization of onboarding materials, ensuring that users receive relevant guidance and support tailored to their specific use case.
- To ensure that users move seamlessly through the intent stage, the product team will have made sure that common issues that cause users to drop off have been addressed by either the support team or the product itself. Meanwhile, the marketing team will focus on providing continuous, personalized encouragement to users.
- At the evaluation stage, the team might release a new paid tool to show users extra value compared to the paid plan.
- As users move into acquisition, the team will focus on providing a personalized experience, uniting marketing, product, and support data to provide in-app guidance, feature recommendations, and targeted offers. They’ll also analyze retention metrics to identify patterns and behaviors that indicate long-term engagement and provide content to those who are at risk of exiting the funnel.
- To encourage referrals, the team might also offer rewards such as a free month of membership if the user brings another to the app.
One platform to improve the product funnel
As we explored earlier, there are initiatives you can implement at each stage to push users through your product funnel. However, much of this is hinged on using the right product analytics platform.
The best product analytics platform will allow you to go beyond basic reports of these product analytics with advanced segmentation, detailed funnel reports, and unlimited exploratory analysis to fill in the gaps.
It will also, like NetSpring, bring data from across channels into a single solution by sitting on top of your data warehouse. This allows you to gain a comprehensive view of the user journey without losing time or risking errors creeping in.
NetSpring is designed to align your team toward growth. If you’re ready to get started, explore our features today with a 14-day risk-free trial.
