SaaS Cheat Code: Dual Funnels
Another Cheat Code is something I call a dual funnel, which targets both a wide audience at a low price point and a premium or enterprise audience at a high price point.
This works well because the wide, low-touch funnel allows you to bring in customers who can help your product spread via word of mouth. That brand recognition can feed your high-touch, high-priced funnel.
One example is SignWell, an e-signature app with a wide, low-touch funnel bringing in professionals and small businesses who only need a few documents signed. On the flip side, that same e-signature app might target mortgage brokers who need 5,000 or 10,000 documents signed each month.
What often happens in the case of a dual funnel is that in the early days the low-touch funnel brings in the majority of the revenue. As you build your user base and bring in more high-end users, they will become a higher percentage of your revenue base.
At that point, when you’ve developed a strong brand, you can build the business on both fronts, and your growth will be dramatically accelerated.
What If My Funnel Isn’t Working?
You’ll know your funnel isn’t working if your numbers at any phase are below the typical rule-of-thumb ranges. Customers and prospects are spilling out of your funnel somewhere, and you need to fix that leak before you start pouring more money into marketing.
Start by examining the metrics at the bottom of that funnel, then work your way up to see where the problems are.
- How happy are your customers?
- How long do they stick around?
- How many of your trials convert to paid customers?
- How many website visitors sign up for a trial?
- How well does each traffic source earn you website visitors?
If your customers are frustrated and churning out after a few months, it doesn’t matter how many people you’re sending to your website. Everything at the top of the funnel is a vanity metric when the bottom of your funnel isn’t healthy.
Keep in mind that you need to have enough traffic coming through your funnel that reliable patterns appear. If you’re only tracking a handful of customers, you won’t have enough data to see noticeable patterns.
How you fix your funnel depends on where the problem exists. Starting at the bottom of the funnel:
- Are people churning out in high numbers after paying for a month or two? You likely have a problem with onboarding or product-market fit.
- Are people trying your product, but not many are converting to paid? This could be a problem with your onboarding (you’re not getting them to experience value quickly enough) or your sales process.
- Do you have a lot of website traffic, but no one is signing up for your trial? You probably have an issue with your value proposition, marketing copy, or positioning.
Having an outside perspective can be invaluable in helping you troubleshoot the problems in your funnel. Ask members of your mastermind for help, reach out to an advisor or mentor, or even consider hiring a consultant to help plug the leaks before you spend too much time and money bringing in new leads.