Jacques Mattheij

Technology, Coding and Business

Fewer Holes

Every hole in the bucket causes a loss, so one obvious strategy to reduce the loss is to reduce the number of holes.

The most blunt sites have a ‘free’ product that is paper thin and a single step from the homepage to sales. Other sites take a more gradual approach.

Personally I’m a big fan of a very simple, but useful, free product with an extremely feature complete up-sell that you present at every possible turn. So, typically, my ‘funnel’ has exactly two abandonment points, the first, when people ‘bounce’ off the homepage, the second, when they become free users that never bother to pay.

In my experience - but your mileage may definitely vary - if you don’t manage the up-sell right away, it likely will not happen at all. Unless you offer a feature that that particular user was waiting for, if the deal isn’t closed on the first day, it likely never will.

So, then, you identify this user as a loss leader, unless you can find a way to put them to work for you in another way.

Another strategy is to try to move abandoned users to another funnel, one that you yourself own, or that you get a commission on. That way, even if the user didn’t make money for you, they might do so somewhere else. If you manage to recoup the money you put down to attract this person, or a substantial fraction of it, then you will be able to increase the number of people flowing in to the top of the funnel much further than if you did not.

A very crude way of doing this is using exit traffic, pop unders, and so on. I would very much caution against such strategies, they are likely to backfire. Much better to try to keep the user as a ‘free’ user and to show them ads over the lifetime of their account, and to still try to get them to up-sell somehow.

HN Submission/Discussion
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