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How to Use Marketing Funnels in Early-Stage Product Development

idea marketing May 14, 2019

Who said you need an agency to start marketing your product? Here’s how to build a tried-and-tested marketing funnel — without hiring anyone.

We all know that Facebook and Google will get our product in front of potential customers, but the art of paid ads remains a mystery to many people. Does it take an expert to build a marketing funnel? And how much should you spend on a marketer to get you going?

It turns out that growth marketers aren’t sorcerers, conjuring up new users in a puff of smoke. No magic potion is needed to get your first advertising funnel started, and you’d be surprised by how many marketing agency claims don’t live up to expectations.

Building an ads funnel early can have a big return on investment. A funnel will help you validate your value proposition and reduce the tendency to over-engineer your product. It will open up access to a wider pool of prospects sooner and involve them in your product development. By quantifying your assumptions around your cost of acquisition, it will help you better understand your unit economics and improve your pricing decisions.

Because many founders believe that creating a marketing funnel is expensive and time-consuming, they put off marketing until ‘later’, i.e. a future time when it’s typically too late. In my essay, ‘Why Founders Market Their Products Too Late’, I confess how my bias against marketing my product led to the eventual death of my company.

How to build a simple ad funnel in a day

As I’ve said, marketing is not magic. If you can start a business, you can create a simple marketing funnel in about a day, without needing to spend any money on agencies.

I’m going to share with you how I build my marketing funnels, to show you how easy it can be. You can use it to add value straightaway — even if you haven’t launched your product yet.

Note: The following approach can be adapted to other social ad networks, such as Google and LinkedIn.

Step 1: Work on your one-sentence product description

In The Art of Writing One-Sentence Product Descriptions, I explain why describing your product in terms of a simple input from the user and a desirable output from your product is an effective way of quickly showing how your product works and why it’s valuable.

As with most communication, it’s more important to be clear than to be comprehensive. So, when describing your product in a single sentence, don’t try to cover everything — be definite, and as specific as possible.

But what happens if your product has several desirable outputs?

When you’re starting a product or company, it’s often unclear what your ‘killer feature’ is going to be. But having several lead feature candidates isn’t a problem and I’ll show you how to figure out which resonates most with customers.

Step 2: Create basic Facebook ads

At its basic level, a Facebook ad has two components: some copy and an image. In your first version of Facebook ads, I recommend using your one-sentence product descriptions as the copy — one for each potential ‘killer feature’ of your product.

Many novice marketers try to be too clever by using bold claims and fancy language to lure people in. But you don’t want to mislead Facebook users with false promises and big claims. Start by describing what your product does in simple language.

When using a funnel to test copy, remember that you only want to change one variable in each iteration, so I suggest using the same image for each of the ads. I use Unsplash to find licensed, royalty-free images that look appealing.

Note: for B2B-facing products, create your ads with the end user in mind, to get early feedback from the people who will eventually use your product.

Step 3: Prepare your landing page.

After clicking an ad, customers need to land somewhere that explains how the product works, why it’s effective, and how they will benefit from using it. This is called a Landing Page, and it needs to be as clear and simple as possible.

For a detailed primer on how to build a landing page and what it should include, check out my essay onThe Smart Way To Test Product Ideas. In particular, all landing pages need to include a call to action, and for a basic marketing funnel, this action should involve your customer giving you their email address.

Examples of calls to action you might include are:

  • Buy now
  • Sign up for a free account
  • Get in touch
  • Attend a webinar
  • Book a demo

Even if your product isn’t ready, you can direct prospects to a Google or MailChimp form to collect their email addresses. I tend to make sure that filling in a form sends them to a special ‘success screen’ with a specific URL, that might, for example, say, ‘Congratulations on signing up!’ This makes it easier to configure Google and Facebook to track successful conversions.

Step 4: Setup Facebook Ads and Google Analytics

Setting up accounts on Google Analytics and Facebook Ads Platform is relatively straightforward. As part of the setup, Google and Facebook will provide snippets of code that you can enter into your HTML to allow them to track users on your page — and even retarget them with ads later on.

Facebook’s snippet of code is called a ‘Facebook Pixel’ and Google’s is called an ‘Analytics ID’. They both work by triggering cookies that track users as they interact with your website.

Most website builders such as Squarespace, Wix, and WordPress make adding these snippets easy. Just google, ’How to add your Facebook Pixel to [your website builder]’, for instructions.

Step 5: Create ‘Lookalike Audiences’

I’ve implemented Facebook Ads in several companies and Lookalike Audiences routinely get the best results. A Lookalike Audience takes your existing customers, in the form of Facebook IDs or emails, or customers tracked by your Pixel, and finds other users on Facebook who have similar properties. Unlike other custom audiences, you don’t need to identify the user’s characteristics — Facebook’s complex machine-learning algorithms do that for you. And they work really well.

There are a lot of myths about how big a Lookalike Audience needs to be for it to work. In my experience, it’s far smaller than most people believe. I’ve had results with as few as 50–100 users, so that first cohort of signups are on you. Post into Facebook groups, write a great blog post, or even use Facebook’s custom audiences until you have enough to create your first Lookalike Audience.

Eventually, you’ll set up a custom audience using conversions tracked by your Facebook Pixel, which means your audience will improve as Facebook learns who converts and who doesn’t.

Step 6: Start and Measure Your Funnel

Now you’re ready to run your Facebook Ads. You don’t need to start with a huge budget — just five dollars per ad per day is enough to get some basic signals.

Facebook will help you measure your ad click rate, the cost per click, and the cost per conversion. Google Analytics will help you measure your website conversion rate, which I use as an additional sense check.

After a few days, create a simple dashboard of these metrics and ask yourself the following questions:

  • Which ads have had the best performance?
  • Where are the biggest issues in this funnel? Are people clicking the ads? Are they signing up? Are they purchasing?
  • What are my hypotheses for why this is happening?

It’s easy to over-optimize the funnel before you even begin, by imagining potential issues that don’t yet exist. But by starting with the simplest funnel possible, you’ll be able to focus your optimisation efforts based on data.

Step 7: Learn and Iterate Your Copy and Images

There’s no greater source of learning than direct interaction with customers. As you build your mailing list, you develop a channel for emails, conversations, and for surveys.

Listen carefully as they tell you about their issues and ask you their questions, as this reveals insights into their buying journey. And take the opportunity to ask them questions to help you understand their profile, their intentions, and what triggers their interest.

My best ad copy has come from open survey questions such as, ‘What does winning look like for you in the context of [activity]?’ My customers are more articulate than I am, and playing their words back to them in the form of ad copy can work wonders.

Pre-launch marketing

Just because you haven’t launched your product doesn’t mean that you won’t benefit from marketing. As you collect email addresses ahead of your launch, keep the base warm by emailing them frequently.

When it’s time to push your product out there for the first time, consider building hype with a marketing campaign. Teachable, a platform that helps instructors market their online courses, has developed an eight-day campaign called the ‘Crazy 8’ which outlines a playbook for email marketers to build hype ahead of the launch.

Build your marketing funnel now!

It takes guts to get a product out early and in front of people. Building a marketing funnel takes about a day, but by doing so you’ll demystify the black box of acquisition marketing . . . and you’ll improve over time.

So, the next time a marketer promises you the world with a sprinkling of fairy dust over your Facebook account, why not spend a day creating your own funnel first, before handing over the cash? You might be surprised at the results you can achieve by yourself.

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