Wednesday, May 27, 2009

A Marketing Funnel: Rediscovered, Improved, Magic or Dead

Despite the facetious title (yes people do all make claims to that affect about marketing funnels - and I don't want to know where you lost your funnel or what is in your funnel either :-)) the traditional concept of a marketing funnel can be a useful tool to appraise your online marketing efforts.

Firstly, put away your "magic" funnel - you won't need it here. What you will need is a bit of imagination and a willingness to consider your customer generation activities as a funnel. Ironically, the analogy of a funnel is not quite accurate as what goes into a funnel inevitably comes out the other end whereas your chances of converting every lead to a customer is next to zero - you've got a porous funnel and it will leak your challenge is to limit the extent of leakage. I digress.

The Marketing Funnel

The diagram (funnel) is a representation of ideal customer behaviour arising from marketing activities. In theory marketing activity (eg a website or online advertising) generates awareness of your services/products, generates interest in those who see it, they think about it weighing up the benefits and disadvantages maybe comparing it to other options and choose to buy it. If you are lucky they will tell others about it too!

So you are effectively trying to address the needs of your potential customers and recognising that the general public effectively need to go on a journey before they become customers. Providing different forms of information for people at different stages of this process is a sensible way of catering to these needs. For example, a potential customer in the evaluation phase may want to know the benefits and disadvantages of particular surgery, whereas someone with a medical condition might not even know of some of the forms of treatment available so simple statements to the effect that there are options may be sufficient to generate interest.

The Conversion Funnel

Another use of the funnel is as a way of representing the steps a potential customer must complete before becoming a customer. Tools like Google Analytics provide representations of the paths that customers follow to achieve a goal. For example below is a process representing four steps before a purchase from a website. In this instance the user must start the registration process, complete it, and then enter payment information.  

At each stage a percentage of users do not proceed - for various reasons such as they don't have enough time, they lack all the information they need to complete that step now or they change their mind. Of the 110 people who started the process only 14 completed it a conversion rate of 12%. If you started the funnel with people who visited the website the % converting would be even smaller.

Conversion path analysis 

Our stats

I've been looking over our statistics and can provide two statistics by way of comparison:
- a conversion rate (the % of website visitors who visit our 'contact us' page as measured by Google Analytics)
- a booking rate (the % of website visitors who make a booking and turn up at the clinic as measured by completion of a patient registration form that specifies they found the clinic from the OGCG website)

The conversion rate is 19%. However our booking rate is only 5%. Why the discrepancy? Obviously there are several more steps between looking at the contact information and turning up at the clinic to complete the patient registration form. In fact we lose three quarters of people between the contact us page and those that book and turn up at the clinic. Mmm room for improvement. Perhaps a percentage of people are just curious about where the practice is but will never make the call, perhaps some call but realise the services don't meet their needs, perhaps some make a booking but never turn up and perhaps some do turn up but have also heard about the practice from other sources so don't select the website option on the form.

Anyway, you get the idea and can apply it to your health business's conversion process. A 5% response rate is considered pretty good by advertisers in general. See the Direct Marketing Association's  industry stats for direct ordering, lead generating and traffic building. 

A word about referrals

In the health market I think there is something fundamentally wrong about soliciting referrals from you customers - after all they are patients, who would, given the choice, prefer not to be seeing you and probably don't care to disclose to all and sundry what kind of medical practitioner they were seeing for what kind of illness.

So discretion folks. If people truly had a great experience they will mention it to their friends and colleagues in an appropriate context without you needing to prompt them!

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