Friday, January 14, 2011

Deep Dive Into the Social Media Conversion Funnel

Many of you are familiar with Google Analytics' "Conversion Funnel", which shows the path an user takes from your website's landing page through the different pages leading to your converting page.  For eCommerce websites, this is usually in some forms of product page -> shopping cart -> checkout -> confirmation.  Google Analytics shows how many visitors are dropping off during each stage, and also informs you of other entrances into and exits from each page in the funnel, showing you potentially user paths that were unintended for your site design. 

GA's conversion funnel visualization is useful for two major reasons:
  • The valuable information about your visitor's behaviors along the purchase path can guide you in making the proper changes as needed to increase conversion rate and ROI
  • GA's funnel is modeled closely after the purchase funnel frequently referenced in marketing, first developed by Elias St. Elmo Lewis back in 1898.  The funnel described the process by which people are motivated to act to purchase based on external stimuli from sales representatives, and since then used as a framework for sales representatives to act accordingly based on the potential client's position in the funnel. 

While there have been many variations of the purchase funnels proposed since 1898, the basic layers have always been relatively unchanged: Awareness, Interest, Desire, Action, Rinse and Repeat Action.  However, in the past couple of years, we have seen some major transformations proposed for the funnel, primarily in response to the rise of social media as a new powerful marketing channel. 

One major complaint about the traditional purchase funnel has been that the funnel focuses solely on the actions of the sales representatives, where the company selling the products are in control and the customers are merely shepherded into the buying process without much say.  This is even more pervasive with an eCommerce business model; the website at a massive scale shepherds hoards of end users into the funnel automatically and efficiently.  The user has no say in the process except to participate along.

This, of course, is completely changed with social media. 

Suddenly, the megaphone is not just in the hands of the corporation selling products and services.  Each online user is now given the opportunity to leverage a megaphone to broadcast to whoever that is willing to listen.  Each user can take on a different persona and choose to be a hero or a villain in the eyes of the companies and corporations he is discussing about.  The "corporation" suddenly find itself at a disadvantage against the consumers, unsure of the next move and how to react. 

It doesn't need to be like this.  Play the game and make your move.  With the proper behaviors, you can regain the same control you used to have with the traditional purchase funnel, but this time, the two-way conversation provided by social media will make the entire experience more enjoyable and productive for both the customers and the corporations.

Just like GA's funnel visualization,  understanding the funnel layers and the users' actions can much better prepare you to make the right move at each stage. 

First thing though, we must define the actual layers of the new social media conversion funnel, which I'll sometimes refer to as the social funnel for short.  This is where there has been many interesting proposals.  Some advocates the same exact layers as before, with the social media channels adding into the variety and the additional eyeballs in the "Awareness" layer on top.   In a classic funnel, the top is always larger than the bottom, because in this case the funnel acts as a filter and only a subset of the materials pass through from the start.   Some suggests to "flip the funnel", because existing customers can be your biggest advocates with the best megaphone to bring you a flood of new customers through word of mouth.  I think most of the proposals make sense in one way or another, but for practical reasons, I propose the following model which takes all of them into account, and is, I believe, the most actionable approach in practice. 

Firstly, I think the overall shape of the "funnel" should not be restricted to the classic shape of the funnel, whether it's flipped or not. Firstly, social media is meant to be used to facilitate engagement and conversations, and engagement becomes the main unit of measurement in the funnel.  It's no longer just about the number of eyeballs that enter the funnel, but how the different visitors are engaging with you and others on the different properties.  As a result, the size of this funnel should not be restricted to where the further layers of the funnel is necessarily smaller than the top layer.  Secondly, "advocacy" is an important layer in social media that is generally not considered in the traditional funnel model, and another reason why the funnel can expand even towards the bottom of the model, where through word of mouth, the few people that converted can bring new people into the funnel. 

Here are more detailed descriptions of the proposed layers that make up the social funnel.

Awareness and Perception:  
This layer gets your brand or your products out there in order to drive people into the funnel.  Besides the traditional marketing channels, newer channels such as search engines have really made the process of building awareness very targeted.  In social media, by using your community and your influencers, the process of building awareness become more self selected.   The opportunity has really expanded as well since there are so much user generated content out there nowadays.  The blogosphere, review sites, forums, online news media, etc.,  can all drive awareness and establish perception.  While this layer is largely influenced by your advocates, they can also be influenced by your competitors and critics.   

This layer is built from all the prospects from the Awareness layer.  A certain subset of the population that are aware of your products or brand will decide to "follow" your progress and learn more about you.    Here are some of the specific behaviors of subscribers in the various social networks:
  • Facebook: Like; Add as Friend; or Join Group
  • Twitter: Follow
  • Youtube: Subscribe to Channel
  • Blog: Subscribe to RSS

Engagement and Interaction: 
Engagement is basically the big bet of social media.  Social media has made it easier than ever to engage in a 2-way conversation with your potential customers online.  Marketers strongly believe nowadays that it is critical to enter into a dialogue with your customers and letting them participate in more meaningful ways than just constantly getting fed emails or promotions.  By getting the customers actively involved, you are building trust to move prospects down the funnel.  It is important to note that with the openness of social networks today, users don't necessarily need to be a subscriber in order to engage and interact.  Here are some of the specific behaviors that constitute engagement in the various social networks:
  • Facebook: Like a particular post or shared item; comments and replies to a post
  • Twitter: @ Mentions; retweets; direct messages
  • Youtube: Comments on a video; replies to comments
  • Blog: Comments

Advocacy and Influence
At a deeper level of engagement, the user can essentially become your advocate and start to spread the words about your products. Depending on their status in the social media community, their actions can help influence behaviors related to you and potentially generate more prospects for your products. Generally, the behaviors of the advocates are very similar as a normal engagement, but the actions are more in the flavor of promoting rather than only participating.  Specific behaviors include sharing on Facebook and retweeting on Twitter,  as well as posting generally about your products.  You can measure the actual influence of your advocates by measuring the click-through rate of those shared items into the intended landing page, by setting special campaign  tracking codes for each of the links you share out on your social media properties.  The impact contributed by your advocates will persist throughout the bottom half of the funnel, moving prospects down to become customers and repeat customers. 

When analyzing the effectiveness of social media campaigns, we often assume that more engagement, advocacy with more impactful influence would drive more leads into your website, which is often the place where you are counting your conversion or satisfying your main business objective.  Your goal may be to get leads into your website in order for them to complete a purchase, or maybe just download a whitepaper or sign up for the mailing list.  Each click from the various social media properties into your website is considered a lead generated as part of your social media efforts.  In the traditional purchase funnel, this is actually towards the top of the funnel.  As we can see that in the world of social media, quite a bit has been involved to get to this point. 

This is the journey on your website leading to the final conversion, which can be a true purchase conversion such as an eCommerce sale or some other micro-conversions for the website (filling out a form, download a paper, etc.)  In GA's conversion funnel, it demonstrates the path the user took to reach the final thank you page.  In social media, these are the direct conversions as a result of your social media efforts.  The representation here should be the same as with traditional conversion funnels, showing the unique visitors during each layer and the drop-off rate at each layer down to the final conversion page in question. 

Loyalty and Affinity: 
Another unique characteristic property in social media funnel analysis is the strong potential in using engagement on social media platforms for establishing loyalty for converted customers.  This, along with continued advocacy and influence, can expand the bottom of the funnel after the conversion layer, and continue to drive new users in as leads and even new eyeballs into the top of the funnel from the internet.  

Now wash, rinse, and repeat, and you have a brand new social funnel, except the next time around, it may actually have a bigger opening with greater awareness, and driving more leads, conversions, and loyal customers into the mix.  Within each layer, by adding up all the behaviors, such as adding up all the engagement and interactions that occurred within the entire layer, you can see whether the funnel is actually expanding or shrinking and at which point, and overall whether you are getting enough leads or conversions based on the level of engagement on your website. 

As we have seen, representing your social media efforts and responses by using a funnel dedicated to the social media channel allows you to act accordingly when executing your social media campaigns.   As you are listening, conversing, and building relationships with users in social media properties, you should monitor how these activities and responses are driving results through different layers of the social funnel.  Are you building a healthy fan-base that is helping to influence others to move down the funnel, and ultimately growing the funnel ?


  1. Excellent analysis. GA funnels are also a good way to monitor and manage staff activities to optimize conversion rates.

    Would love to see ways that this kind of analysis can incorporate ROI. So much noise about social media... yet very few ways to develop a simple ROI metric -- like cost of lead or cost of sale.

  2. @olinhyde Thanks for the comment. Yes, I'm thinking to dedicate an upcoming post regarding social media ROI. this kind of funnel analysis is good for capturing the outcomes and how other users and influencers impact the marketer, but it doesn't incorporate the input into the interactions from the marketer's side which is very important in social media. That piece needs to be included in the analysis to explain the ROI.

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  6. It's not optimal to drill your clients to look only for ROI of Social-Media campaigns. Most of them are brand campaigns, where the main purpose is awareness and not leads. For example; Youtube in-stream video advertisements are measured by views and not lead generation or even cost per lead!

  7. Awesome explanation with the concept of Funnel formation towards the comparison with the our business sales of eCommerce development. Thanks for sharing this useful post.

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