The Future of Funnels

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1:03Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantz. My guest today is Mikel Diaz. He's a digital marketing expert and founder of Funnelytics, a software company revolutionizing the way marketers optimize their strategies. Through Funnelytics, he simplifies complex marketing concepts, making it easier for businesses to understand and optimize their customer journey. So, Mikhail, thanks for joining me. Oh, thank you for having me, John. Looking forward to our conversation. So the term marketing funnel has been around, I've been doing this 30 years, it's certainly been around at least that long, changed dramatically.

1:43There's some that say it's not even a relevant concept given all the changes in the way people buy today. I'm curious, how do you think about or what are the key components in your mind of a marketing funnel or a customer journey? Or are they two different things? So that's a good question. I think the marketing funnel as a whole has, to me, evolved into more of that customer journey and really kind of thinking about what are those different touch points that take a random stranger to become a customer for your business, right? And if you were to take one person and you were to work backwards from the moment they became a customer, what are all the different touch points that they had all the way through to the very first time they saw your company?

2:26Well, you could put that kind of on a timeline in a sense, or, you know, you could kind of see it in a series of steps. Well, really, to me, what we're really doing here is we're trying to orchestrate what is the most ideal journey to get as many of these random strangers to become customers for our business. So a lot of times we think about sales funnels in the sense, especially nowadays, in the sense of, you know, ClickFunnels, Russell Brunson, you know, that world of, you know, webinar funnels and free plus shipping funnels. And it's these little individual tactics. But really, if you strip out the fancy words around it and you just focus on what is this actually trying to do?

3:07Well, it's trying to get this random person who's never heard of me before to go through a series of steps to eventually become a customer and then keep going through another series of steps to become a repeat customer or maybe through another series of steps to ascend to the next level. And really, it's just a timeline of that person's journey. So that's how I look at marketing funnels. They haven't gone away. They're never going to go away because that's all fundamentally it is. How do I get a random stranger to become a customer and orchestrate the best journey possible? So that's no question.

3:39The simple, like, how do I get somebody who doesn't know me to become a customer? Where in between there is, how do I get an ideal customer to want to pay a premium to become a customer of mine? I mean, where are there steps in that funnel or in that journey that really focus on getting the right people, you know, who understand why they should pay a premium, you know, rather than just get somebody to say, yeah, I want to buy from you. Well, I think it depends what kind of business you're in. There's not every business is in the premium, you know, business, right? So it depends on where you're at and what you're trying to do.

4:11Now, if we're talking about marketing services and you're talking about kind of, you know, or even me looking at my software, you know, trying to get the right people who are going to go on the top tier of my software, for example, Well, part of that journey has to be, number one, do we have the right proposition for our ideal prospect to sign up to? That's the number one thing. Because all we're really doing in this marketing game is we're bridging a gap between where somebody is today in terms of their pains and their desires to where they want to be. And our solution is just there to bridge that gap, right, fundamentally.

4:50lead. It's kind of marketing and, you know, offer creation 101. A lot of times what happens though, is people assume the lowest common denominator. And what they'll do is they'll say, well, this person just wants more leads and sales as an example, right? In marketing. Well, of course, everybody wants more leads and sales, but if you kind of go a couple of layers deeper, when you look at the, your ideal customer and what their core pains are and their core desires, well, they've probably already gotten to a stage where they've tried things that get them leads and sales. Maybe it's beyond that.

5:24Maybe, you know, you're looking at somebody who is in the software space and they don't say leads and sales, they say the word demos. And maybe they've already got a, an inbound strategy or an outbound strategy because they're doing demos. And what they're really wanting is an inbound strategy to generate demos, right? So the more you can speak to those customers, the more you can identify what are those pains and those desires. And our job should be to position our service or our strategy or our offer to bridge that gap. Now, how do I find out whether they're the right fit? Personally, I really don't like having any sort of funnel or any sort of customer journey where there's no segmentation that occurs at some point, right?

6:11So it's great to get somebody's name and email, but that means not much because anybody can give you their name and email. At some stage in the journey, I want to find a way to segment them. Are you an agency? Are you a business? Are you this type of business? Are you looking for this? The more I can segment, the easier it becomes for me to look back on my metrics and say, okay, we spent this much. we got this many leads, but out of all these leads, only 10 % of them fit this particular profile. And those 10 % went on and maybe became customers or whatever it is. So now how can I reverse engineer to understand, can I get more of that 10 %?

6:54Absolutely. You're hitting on them already, but let me ask it more directly. What are some of the comments? You see a lot of funnels. So what are some of the biggest mistakes that people make or the most common mistakes. Like I said, you've probably hit on a couple of them, but let's talk about them as mistakes. Okay, so the biggest one is the notion that a funnel is something I launch once and it will work. My God, the amount of people who just assume that I can go and spend$10 ,000 and make$30 ,000 and it's just going to work is crazy. What really you need to understand is that there's this continuous cycle that you have to go through when it comes to optimizing these customer journeys.

7:42First, you have to plan, right? You have to architect, like, what is this journey in my best possible guess? Because it is just a guess. Hypothesis, right? Your hypothesis, right? And then once you launch it, once you actually build all the pages and set up the ads and do all that stuff, now you've got to measure. You've got to look at your data. You've got to understand what's working, what's not, what are the numbers showing me. Then I've got to, from measure, make some decisions, get some insights in order to run an experiment and try to optimize. So it goes plan, measure, optimize. And it loops back.

8:23right? Here's a good way to think about it. It's imagine I decide I want to lose weight, and I'm going to go and set up a plan, right? I'm going to work with a personal trainer, set up a plan. I'm going to start executing on that plan. But I'm not going to measure whether or not I'm losing weight. I'm just going to go with it, see what happens. And maybe I'll lose weight, maybe I won't, but I'm not going to measure or track my progress, right? That doesn't really make much sense. And then what happens if I do track my progress, but then I don't make any decisions off of that. So it's like, I'm not losing any weight.

9:03Let's keep going, right? I don't tweak, I don't make any decisions. And then what happens if I actually start making some progress, or here's a better example, let's say I'm lifting weights, and I have this plan, I'm doing my bench press, I'm getting stronger. And then I look in the mirror and I'm like, man, my chest is pretty big, but it looks like I haven't worked out my legs at all. And I have a big torso, small legs, but I'm not going to readjust my plan. I'm just going to keep this going forever. Right? Well, that's the issue. And that's what most people think that a funnel is just a one-time thing.

9:39I launch it, it works, but it really has to go through this cycle over and over again. Yeah. So, so even if you get one that's really working, it's eventually not going to work, right? As you scale it, as you, in order usually to get it to work, you're going to have to optimize it and you're going to have to run through some tests and experiments. And also most people don't factor that in when they launch their funnels. They don't factor in that in the beginning, I'm most likely going to lose money because I'm experimenting. I'm testing. I don't know what the metrics are. Maybe my opt-in rate is 10%.

10:12Maybe it's 50%. Maybe I nailed everything. But the most likely what will happen is I'm going to spend five grand and I'm going to lose that five grand because I'm going to use that five grand to learn some stuff. Maybe generate leads, but nobody converted. Nobody became a customer. So it's just a matter of iterating consistently. You mentioned it, but hit again on this idea of testing. How does somebody go about properly testing, right? Because you build a landing page and you think, oh, well, I got a headline, I got a video and I got a call to action and I got like, I'm going to test everything, right?

10:45But is there a proper way to test and optimize after you test? Yeah. So there's a process that I follow that really helps with the optimization process. The first foremost, I always work backwards from the sale. So wherever the conversion occurs, so let's say it's a purchase on an order form right i always want to work backwards from there all the way back to the very beginning of the funnel most people flip it most people say i'm going to start trying to optimize the ads first but here's a very simple example of why that doesn't work now this is very generic and simple but it kind of illustrates the point let's say i'm i don't know it cost me five dollars to get somebody to my landing page right five dollars is a click or something like this.

11:36And I'm going to say, you know what, it's not really working. I really need to lower my cost per click. Well, simple way to do that would be, let me just go and target India or a different country. My cost per click will go down. I'll get a whole lot more traffic to my site. Does that mean that it's going to convert any better? No, it's just going to mess up the rest of the conversions across the funnel, right? If I go to the next step, which is trying to tweak the landing page, same thing. I could just change the headline to be some crazy, you know, bold headline that's going to get a whole lot of people to opt in, but no intent on the back end, and they're just not going to follow through.

12:14So the first thing I want to do is work backwards. Okay. Is there enough people who've gotten to my order form or my conversion page that I can look at? Now, every step of my funnel, at very minimum, I'm not making a decision unless there's at least 100 people. And that's the bare minimum, right? So I want to see at least 100 people go to my order form. Then I can see, okay, how many people from the order form actually went and purchased. Then I take a step back, and it's the sales page that drives people to the order form. Okay, was there 100 people that went there? If so, is there a way to improve this and look at this?

12:53Then I want to take one more step back, which is what is the follow-up process to get people to that sales page? So usually retargeting ads, emails, then a step back, which is my, the way I get these leads in. So my lead capture, and then at the very beginning is the ads. So I always work backwards from these five optimization steps. Now, each one of these has a different thought process, right? Like a sales page, for example, you're not thinking about in the same way that you would look at an email follow-up sequence, et cetera. But these are, to me, the five core points of optimization that you should be looking at.

13:31Exactly. So this is a scenario I run into with a lot of people. I work with a lot of agencies and they optimize and they're tracking and they've got attribution set up, but the sale itself actually happens with the sales team. It goes like off the web to the sales team. And in some cases, they don't even know what happened. How do you fix kind of that last mile problem that a lot of folks end up experiencing? Yeah, so good question. Number one, use a proper tool that looks at customer journeys, not attribution. Because the problem with attribution tools is attribution tools are designed to look at clicks and they're designed to look at revenue.

14:11But there's a fundamental problem with this, right? So I'll give you a very simple example. let's say somebody spends a thousand dollars with me right the first ad that i showed them was facebook then they went in through my email sequence and clicked on an email and then eventually maybe went to my page and didn't buy or didn't put in their you know fill out their demo request or whatever call with my sales team but then they clicked on a google retargeting ad and went through and then eventually my sales team closed them right a typical attribution model will basically say, okay, well, there are three core touch points.

14:49There was Facebook in the beginning, there was an email, and there was also this Google retargeting ad. The person spent$1 ,000. First click would basically say, Facebook, you get all the credit. Last click, Google, you get$1 ,000. Congratulations, you made this person$1 ,000. Linear would basically say, 333 here, 333 here, 333 here, right? Okay, what if it's one person who spent$1 ,000? How does that work now? Was Facebook the reason this person became a customer? Was Google? Or was it the whole sequence? Like all of those touch points contributed to this. So that's the first thing. You have to have a tool that measures and looks at the entire customer journey.

15:35First. Second is that tool has to plug into your CRM to look at your sales pipeline. It's got to be able to tie and basically tie that data back to that sales pipeline. That's something that we built at Funalytics from the beginning because, well, it evolved over time, but it was part of our vision because a lot of sales occur offline. So if I can't create a profile of this person of what they did online, but then once they go offline, pass that data back to that same profile, I will not be able to see the whole journey. Over the years that I know I've had interactions with, they've read my books, have done stuff, you know, but then they clicked on a Facebook ad, you know, because I was running Facebook ads and then they became, that's actually how they became a customer.

16:19That's the path, but it was all so many other things that, you know, that, that really led to it. That just was like the convenient way. Yeah. And the reality though, is would they have ever clicked on that Facebook ad and became a customer if everything that, if they never bought your book? Oh, probably not, right? We could eliminate all of those touch points. And now you have to say, well, how many of them actually would have just clicked on a random Facebook ad and just became a customer? That's why you have to look at the whole journey as much as possible. So this isn't going to be fair to ask you this as we're winding down, but what role does Funnalytics play in what we've been talking about today?

16:56How does it plug in? Oh, good question. Thank you for asking. So basically, Funnelytics was designed to help you plan, measure, and optimize your journey, right? So everything I just kind of talked about. So the first thing you got to be able to look at is what does my journey look like? What are all these different touch points? It's really hard to kind of describe this in words, right? So Funnelytics is like a diagramming tool, a whiteboard tool that allows you to map out these traffic sources, these pages, the actions that people take. then the second part is well i need to be able to overlay data on top of that picture on top of that strategy so funnellytics tracks all of these different touch points it'll pull in data from your crm it'll track what happens on your website and it'll basically visualize that entire journey and then we've built some really cool analysis features to basically be able to say hey if i only isolate let's say the facebook traffic what happens if i only look at the people who made a purchase?

17:53How does that like increase my conversions? If I were to increase this conversion rate by 5%, how much more money would I make? Right? So it allows you to run these scenarios and basically optimize and make some decisions as to what to do next. So it just kind of sits in the middle. It's this command center that's on a digital whiteboard basically. Yeah. And the way you were talking about working backwards, you know, just what you said, I mean, you run in those scenarios, it almost kind of says we better fix this part because if we fix this part, you know, so much magic, you know, will happen.

18:26Or if we even fix it 1%, you know, so much then attributes. So it's kind of, you can do some what ifs and scenarios, can't you? Which is really cool. Yeah. It's makes it so much easier to make decisions. Well, Mikkel, I appreciate you taking a few moments to stop by the Duct Tape Marketing Podcast. Is there anywhere you want to invite people to connect with you or obviously find out more about Funalytics? Yeah. If you want to find out more about Funalytics, go to funalytics.io and you can learn a little bit more about what we do there and how the tool works. And in terms of connecting with me, LinkedIn is my social media of choice.

18:58I try to stay away from as much social media as possible, but LinkedIn is where you can find me. Yeah. Awesome. Again, I appreciate you taking a few moments and hopefully we'll run into you one of these days soon out there on the road.