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Conversion is king – and it’s not always easy to stay alive in the kingdom

You are a young entrepreneur, on the verge of finding your life accomplished by the fresh start-up you are about to set up. Well, congrats on that!


What you should know is that, although exciting, the road to success will sometimes be paved with disappointment, unfulfilled hope and even frustration. Because, most of the times, what you believe and hope to be accomplished the very day of your product launch will most certainly take months and sometimes years.

I mean, look at Mailchimp. They are a wildly successful company today, but - remember - they started in 2001, and the bulk of their growth was achieved during the past 3 years.

If you are reading this, then probably your road to success starts with getting people on your website. This is already hard enough as it is. Let’s have a quick look at what actually happens along the way, so that we make sure you manage your expectations and calibrate your efforts.

If you get 1000 customers to pay 20$ / month, then it’s going to be a huge profit and a great startup.

Let’s do a very (very) simplistic calculation on an imaginary conversion funnel with some rather optimistic assumptions:

  • For 1000 users to pay for you product, you need maybe 5x more active users
  • For 5000 active users, you need maybe 5x more registered users
  • For 25,000 registered users, you will need maybe 20x more visitors on your website
  • To sum up, you need to get 500,000 on your website

This is usually the moment when reality kicks in.

In 2012 SaaS Conversion BenchmarksTatango, an SMS marketing company, detailed typical conversion rates in SaaS, confirming that the funnel presented above can be a bit pessimistic but nevertheless representative for Best in Class conversion.

If every visitor you get to your website costs 0.10$, you will need to spend at least 50k on marketing (plus HR and other indirect costs) and it will probably take a long time before you find the winning recipe for only spending 0.10$/visitor.

In our experience, a lot of entrepreneurs don’t plan for this and hope their product will go ‘viral’ by sharing it on their Facebook page. So far, we've only experienced this possibility one time. And the real reason this happened was only because the product was a “social media” type of product and a huge tech publication endorsed them.

Of course, maybe you will be able to marginally improve this conversion. But remember, you are a start-up, and you will be fighting with marketing and pricing concerns, while at the same time trying to provide an excellent MVP to your early customers.

As a side note, I can recommend The 10x Product Launch article by Ash Maurya for a great explanation on how to do a controlled rollout of your product.

conversion funnel

If 1000 people have landed on the website, 100 of them will probably become customers.

Not always. Google Analytics is your first ‘go-to’ tool for “actionable metrics” and, if you haven’t already started, you should try spending a few minutes there every day. It definitely helps to count how many people have landed on your website or how many have hit your link following a Google search. What you should focus on, however, is how many of these visitors have actually clicked the “purchase” button on your website.

In another article, Ash explains some of his conversion funnels:  out of 4200 signed-up users, 3400 will download an online-available app, 1880 will share the product with a friend and only 375 will actually purchase the app.

Consequently, you need to look at each level of your funnel and see what you can improve in order to make more people go from stage one to the next. This is the key. Optimizing and improving the experience at each step, so that visitors unconsciously 'slip' into the buying phase. An extremely useful analysis tool for this is Cohort Analysis. Keen.io, a data analytics platform, has published a great article on how to track data and run a weekly cohort analysis on your user base.

Finding out what needs to be done at each stage of the funnel is hard and time-consuming. If you just ask some potential customers what they think of the functionalities of your MVP prior to the website launch or shortly after, you will definitely get some answers. But, if you think that you will be able to translate them into a long-lasting business model, well, that’s (usually) wrong.

What works for some will not work for all, so try to build data collection and analytics tools into the product from the very beginning, and you will have hard, actionable metrics. Because, remember - no correction, no conversion.

Herein lies the essence of online marketing. At 1000, then 5000, then 10,000 visitors you don’t necessarily get a specific conversion rate of x%. You will need to look into the more delicate aspects of your online marketing strategy: how to tease visitors into accessing free resources and afterwards wanting to pay for the more complex ones.

What I am trying to say here is that there is no universal recipe that guarantees technical and marketing success starting from Day 1 or 5 or 120. What is certain, however, is that a conversion funnel works its way in time by constant and targeted marketing or sometimes by a complete rethinking of your business plan.  And, like everything else in life, a balanced mix of various practices (content marketing, PPC, display, social media, etc) will fuel the top of your conversion funnel.

The reason why visitors don’t convert to buyers even after months and months of hard work has got to be the result of bad karma.

conversion funnel

Possibly. But it’s also due to the lack of constant and consistent marketing along a road in which conversion funnels were partially or totally neglected. Otherwise said, sitting and waiting for people to convert out of the blue won’t help your moral or your company cash flow too much.

What helps, on the other hand, during the thorough analysis of your customer’s journey on your website, is trying to determine what makes them more attentive to what you have to say.

How about transforming the body of text describing what you do into an exciting video in which you briefly explain your Unique Value Proposition? And now, how about making 30 improvements like this every week and measuring the results?!

Of course, there is a natural moment when all these practices and optimizations make sense and don’t feel like overkill. There is no universally-accepted number, but I guess you can start to track your experiments at even a few tens of visitors per day. Eric Ries explains in Lean Startup how they used to run experiments on the website with a Google AdWords budget of just a few dollars per day.

Marketing-tracking-analysing-marketing is the path you need to follow 

To conclude, one thing is for certain: once you've accepted your fate and decided to listen closely to what your conversion funnel has to say, you have significantly improved your chances of success.

Marketing-tracking-analysing-marketing is the path you need to follow.

That, plus a vast array of other qualities you will need to develop, so as not to fall victim of post-launch depression: patience, determination, attention to detail and the power to change horses in mid stream. So quit dreaming of the self-fulfilling conversion and get to work.


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Ilie Ghiciuc, Founder & CEO

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