Jacques Mattheij

Technology, Coding and Business

The Funnel

Running a freemium website is probably best compared with taking water from the sea to some point inland in a very leaky bucket. Every step you make, you lose valuable water, and by the time you reach your destination your bucket will be almost empty, with some luck it is still slightly wet.

The water in the sea in the analogy represents the masses of people that might visit your website. The first bucket full is the people that actually visit your website, and each and every step you make represents one step in the process that leads to ‘conversion’, the point where people become paying users.

As indicated in the previous chapter, there are many ways of paying, so typically the water that leaves the bucket should be put to some form of use to minimize the value of the losses that you will inevitably have.

But the real goal is to lose as little water as possible on the way the cash register.

Some of the ways in which you can achieve this are probably best described as minimizing the number of holes and reducing the size of the holes. You can also use a larger bucket, or have multiple buckets. Technically, this is a trick of sorts because we’re talking percentages here, not absolute numbers, but I’ll add them anyway for contrast.

The normal representation of this process is called the ‘sales funnel’, an upside down pyramid with people ‘abandoning’ the funnel at various stages. I don’t think that picture does justice to what’s going on though, because people that abandon the funnel go somewhere else, and as long as they haven’t left the site yet, they’re still in the race to the final goal, it’s just that they may get there via an alternative route. In the bucket analogy, it’s going to be buckets all the way, under every leak there is another leaky bucket that attempts to convert the users towards the goal, or towards an alternative goal (such as a click on an ad or a contribution in the form of content or ‘buzz’). Until the user or guest has left your site permanently they are still in the funnel and can still potentially be converted.

On our own site we’ve experimented a lot with different strategies to see which work best, we’ve found a mix of being blunt (offer to sell the product right on page one!) with more subtle tactics (features that present, but that will only ‘unlock’ when you’re a paying member) seems to be optimal. But that does not mean that this holds true for every website out there and if you go this route be sure to test and verify every assumption.

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