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How to Build an Effective Product Funnel

PUBLISHED

4 January, 2024

Tope Longe
Tope Longe

Growth Manager

Product Funnel

The product funnel is a key concept for mobile app development teams. It allows them to understand and address the needs and challenges of their users, enhance the user experience, and increase user loyalty. 

A study by Localytics found that 21% of users stop using an app after the first time. By applying the product funnel framework, mobile app development teams can fine-tune a strategy that draws users in and holds their attention long-term.

In this guide, we will examine the six stages of the product funnel in-depth and provide tips on how to improve each stage to build a successful mobile app.

Stages of an effective product funnel

  1. Awareness: targeting and brand establishment

  2. Interest: capturing attention through distinctive features and incentives

  3. Consideration: facilitating seamless onboarding and personalization

  4. Retention: strategies for sustained user engagement

  5. Advocacy: transforming users into brand advocates

What is a product funnel?

A product funnel is a tool used to determine how users interact with your product or solution at every stage of their journey. A product—whether physical or digital—can have its version of a funnel, filled with content that falls under these stages: 

Product Funnel
  1. Awareness: Create initial awareness about your app through marketing channels like social media, ads, content marketing, and app store optimization.

  2. Interest: Capture user interest by highlighting unique features, benefits, and incentives such as free trials or exclusive offers.

  3. Consideration: Provide clear information about your app's functionality, user experience, and value proposition to help users evaluate its worth.

  4. Retention: Focus on retaining users by delivering a seamless experience, providing ongoing value through updates and features, personalization, and effective communication.

  5. Advocacy: Turn satisfied users into advocates through positive reviews, ratings, referral programs, rewards for user-generated content, and fostering a strong community around your app.

Don't worry—we will delve further into each stage later in this article.

When it comes to understanding customer behavior and tracking their progress, app developers rely on a product funnel to help them analyze and monitor different aspects of the customer journey like acquisition, retention, and monetization.

For example, a product funnel can tell you how many people who download your app are going on to become actual users, how many make purchases, and what type of content is most popular. With the right metrics in place, product funnels can help you identify areas where optimization could be beneficial for user engagement and loyalty.

Why are product funnels important?

Transparent overview of the user journey

The conversion funnel provides a comprehensive breakdown of the user journey, from awareness to interaction, conversion, and retention. This transparency is invaluable for development teams, enabling them to identify areas that require more attention and optimization. 

In industries like e-commerce and health & fitness, companies have found that funnel analysis keeps them focused on key metrics and KPIs, while also helping them understand the customers’ needs better.

Identification of growth opportunities

Funnel analysis serves as a powerful tool for understanding user behavior and pinpointing growth opportunities. By focusing on key metrics and making data-driven assumptions, development teams can strategically plan for growth. 

For example, MINDBODY used funnel analysis to discover that engagement with their “Activity Dashboard” resulted in a 24% increase in weekly class bookings. Featuring “Activity Dashboards” in various places throughout their website, mobile app, and email campaigns allowed them to drive more revenue from customer bookings.

Optimization of product features

Analyzing conversion funnels is crucial for optimizing product features based on user behavior and preferences. 

Take the case of 8×8, a video conferencing tool. 

They discovered, through funnel analysis, that their Chrome extension was being underutilized. By promoting this feature, they were able to double their Day 7 retention rate. As a result, they adjusted their product roadmap to cater to the demand for spontaneous meetings.

Enhanced marketing and sales alignment

Funnel conversion rates can show if there are any issues with the marketing and sales processes. This helps to improve targeted position campaigns. 

For example, Rappi, a Latin American delivery app, used funnel analysis to do A/B testing in their conversion funnel. They learned a lot about what users preferred when it came to shipping costs and trial options. The insights they gained from this optimization greatly improved their marketing and sales alignment.

How to build an effective product funnel

  1. Identify your target audience (Awareness)

  2. Capture attention through distinctive features and incentives

  3. Facilitate seamless onboarding and personalization

  4. Sustain user engagement

  5. Transform users into brand advocates

1. Identify your target audience (Awareness)

To kickstart the funnel, it's crucial to carefully identify your target audience and create a captivating brand presence. 

At this stage, UXCam can be a game-changer by helping you understand how new users engage with your app. It provides valuable insights into their initial experiences and behaviors, giving you a competitive edge.

12 kpis to measure onboarding - sessions list

By analyzing user sessions, UXCam can determine which features or content grab users' attention. This valuable insight helps refine your marketing strategies and app design for better first impressions. Plus, it improves your App Store Optimization (ASO) efforts, enhances your social media campaigns, and boosts your online advertising initiatives.

Plus, leveraging UXCam's capabilities can aid in implementing effective referral programs. By studying user behavior and preferences, you can customize referral programs to target specific user segments. This increases awareness and anticipation among your desired audience.

2. Capture attention through distinctive features and incentives

Moving to the interest phase, focus on capturing user attention by highlighting unique features and offering incentives like free trials or exclusive offers. Use UXCam’s analytics to identify user engagement patterns and analyze their interactions with different app features. 

Tracking Active Users in UXCam

UXCam provides valuable insights into what interests users within the app. This information can be used to tailor the app's offerings and highlight distinctive features that align with user preferences. 

Additionally, by leveraging UXCam's data, you can create personalized incentives, like exclusive offers or tailored recommendations, to further engage users and increase their interest in the app. 

3. Facilitate seamless onboarding and personalization

In the consideration stage, emphasize a user-friendly installation process, engaging onboarding, and personalization options. Simplify the installation process for a smoother user experience, design onboarding that's easy and informative, and provide options for personalization.

During the consideration phase, UXCam can help with seamless onboarding and provide insights into user behavior for informed design decisions. 

ScreenFlow in UXCam

With UXCam's user flow analysis feature, you can get a complete overview of how users interact with your app, highlighting the typical steps they take to complete specific tasks. This analysis helps identify any friction points or areas where users might face difficulties, allowing your team to make improvements and create a smoother onboarding experience.

4. Sustain user engagement

After a user converts, it's important to have strategies in place to keep them engaged. One way to do this is by implementing incentives and rewards, and using push notifications to provide timely updates and offers. It's also important to have responsive customer support to address any concerns.

Cohort analysis in UXCam

UXCam is a great tool for identifying why users stop using an app. By analyzing where users drop off and what frustrates them, app developers can make improvements to enhance the user experience and retain more users.

Mobile App analytics - AI Funnel Suggestion in UXCam 2

UXCam offers a great funnels feature. With funnels, you can track the user flow and identify where users drop off. This insight helps you create smoother paths for your users, making sure they have an enjoyable experience. For example, you can use funnels to see how many users successfully complete an online purchase or registration.

You can analyze session recordings of abandoned interactions with UXCam. By watching these sessions, you can easily identify the main obstacles your users face and gain a deeper understanding of why they lose interest. This valuable information allows you to make targeted improvements and address user pain points effectively.

5. Transform users into brand advocates

The final stage involves turning satisfied users into brand advocates. 

Deliver a quality experience, incentivize app sharing and referrals, offer rewards for user-generated content and loyalty, and foster a community around your app. By encouraging users to return to the app, suggest it to others, and share their experiences, you can successfully transform customers into enthusiastic brand advocates.

Mobile app crash reporting 3rd party integration

In the advocacy stage, UXCam assists in understanding what drives users to recommend the app to others. With just a single line of code, our auto-capture feature effortlessly monitors all the in-app interactions of your customers, including gestures, providing you with valuable analysis for user feedback.

Conclusion

A well-designed product funnel streamlines the sales process and enables you to nurture leads, build relationships, and ultimately drive sustainable growth. To elevate your mobile app's performance and refine your product funnel, leverage tools like UXCam to gain valuable insights into user behavior.

Sign up for free and unlock the potential to enhance user experience, identify pain points, and optimize your product funnel for maximum impact.

You might also be interested in these;

Product adoption dashboard - How to track adoption metrics

Product feedback loop - How to implement one for mobile apps

Product prioritization frameworks - A comprehensive guide

Product metrics - How to track and apply them effectively

Product insights - definition, benefits & practical examples

AUTHOR

Tope Longe
Tope Longe

Growth Manager

Ardent technophile exploring the world of mobile app product management at UXCam.

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