Flip the Funnel
By: Joseph Jaffe
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By: Joseph Jaffe
LISTEN
READ
What if this whole “social media revolution” wasn’t about Facebook, Twitter, LinkedIn and Instagram? What if it was really about a change in the way you operate your business? What if, for the first time in history, you could say that you put your customer at the centre of your business and actually mean it?
Well, I know how Joseph Jaffe would answer it: “you’re damn straight that this is what it’s about”. In fact, he would argue that it’s time to “Flip the Funnel”.
Traditional marketers would tell us that we need to lead a prospect through a funnel where they are aware of your product, then take an interest in your product, then have desire that product and finally, take action. Tada! They had the entire world chanting: A…I…D…A! A…I…D…A!
But things aren’t what they used to be, and AIDA is starting to look like a Model T instead of a Ferrari. It’s out of date, oversimplified and incomplete. Why? Because the reality of business tells us we need more people to buy from us, but we also need them to buy more often, to spend more in the process and to tell the entire world about how awesome we are. AIDA focusses solely on the first point at the exclusion of the other three.
So how do you change? You flip the funnel and realise that the Action in AIDA is only the beginning. In fact, you take the traditional funnel, completely flip it over and you get ADIA – where A = acknowledgement, D = Dialogue, I = Incentivisation, and A = Activation.
This is the world we live in now. And “Flip the Funnel” is your guidebook. Learn everything you need to know about how to Flip the Funnel, and win in this new economy where customers actually want to be treated with respect, and are willing to pay handsomely for it. Retention, my friends, is the new acquisition. And as you’ll find out in this book, you can take that one to the bank.
“Third prize is you’re fired.” That scene from Glengarry Glen Ross is etched into my memory. Alec Baldwin standing up in front of a room of salespeople saying: “You’ve got leads. Mitch and Murray paid good money for them. Get their names and sell them...get them to sign on the line which is dotted!”
This scene is obviously over the top. But he goes on to describe something very interesting - the traditional marketing funnel. AIDA. Attention, Interest, Desire, and the light at the end of the funnel, Action. Everything else, like the customer having a great experience - well, that’s somebody else’s problem.
The problem is that this mindset, that marketing’s role is to generate leads at all costs, is still as pervasive today as it was when they yelled “action” on the set and Baldwin started his now famous speech.
We’ve spent billions of dollars trying to get people to travel down this funnel. Superbowl ads, magazine spreads and lately, more than a few viral videos. The problem with this thinking is that it doesn’t really matter how many people see your “kitten on a treadmill” Youtube video - what you need and want are profitable, long-term relationships with customers.
It’s fairly telling that the most glamourous awards for the advertising world (held at Cannes, not surprisingly) have nothing to do with how effective they were in generating business.
The problem with this thinking is that it is severely out of date. It’s oversimplified. It also leads to a company that doesn’t deliver “as advertised”. How many snappy commercials are going to get you over an amazingly crappy experience on an airline? Although it’s become a cliche, the world truly has changed in the past five or so years. If you ignore these new realities, the third prize will shortly be yours.
There are many different ways we could move forward, but only one that would truly capture the new reality we are living through.
The first option would be to extend the funnel. A lot of organisations are here now. We’ll set up a loyalty program for our customers, because “we love our customers”, right? Or maybe we’ll have a shiny new CRM so we can continue to blast our newfound customers with offers, because “we love our customers” right? Or my personal favourite, we’ll do one-to-one marketing where we swap out the “Dear customer” line for “Dear Bob”. Not only do these things not work in the long-term, sometimes they actually have a negative effect on loyalty.
A study by Forrester Research has proven this for the banking, mobile phone and consumer packaged goods categories. What DID have a strong correlation to loyalty? Prior experience, trust, and reliable service.
I think it comes down to something simple and fundamental - actually caring about your customers. If you spend the entire day walking around trying to find ways to trick people to buy from you, you’re not coming from a place of trying to figure out how to provide value. And so you won’t. Third prize is yours.
The second option would be to turn the funnel on its side. Over the past five years the voice of the customer has become significantly amplified. From about a 1 or a 2 up to a Spinal Tap invoking 11. You could do this, but the reality is that this is going to happen whether or not took action or not. Choose this new way forward and you’d probably get second prize (the steak knives) and keep your job.
The last, and the option that makes the most sense, is the completely flip the funnel. We’ve all heard the studies that say it costs far more to acquire a new customer than it does to steward an existing one. So why, oh why, do we focus so little of our attention on it?
Jaffe suggests that if we focus more of our attention on the other end of the funnel - the stuff that happens after the sale is made, we’d be much more successful. But because we hate change so much, he was kind enough to actually flip the entire funnel and turn AIDA into ADIA (see how he did that?). You actually flip the funnel. Brilliant.
So after a customer buys, we now acknowledge them, start a dialogue with them, incentivise them and activate them.
The first thing we do on the other side of the funnel is acknowledge. This is what makes people feel important and like they made the right choice. This acknowledgement can come in many forms:
Now, there’s a right and a wrong way to do this, and it’s all in the delivery. I recently had an experience where the lady behind the counter said all the right things, but the way she delivered it in a way that literally made my skin crawl. Even worse than no acknowledgement at all is acknowledgement that isn’t genuine.
The “dark” side of the funnel contracts as we move down it, while this side expands as we move along. Now that you’ve established a little bit of trust, it’s time to take the next step and engage in dialogue with your customers. We live in what some people are calling the “many-to-many” era, where the conversations are seemingly endless, and our place in them is uncertain. Keep one thing in mind - our job now is to be ready to engage in dialogue with our customers on their terms.
Here are a few things we can do to get the conversation started:
Now it’s time to start rewarding your customers so that they continue to buy from you. Jaffe asks a great question: do you know the percentage of your business that comes from repeat customers? If not, you might want to start measuring. If a company like Coca-Cola can measure this - who know that 12% of their customers account for 80% of their sales - you can measure it too.
You’ll want to reward people not just for buying from you, but also for helping to spread the word. If you have any resistance to this idea, consider this brilliant point from Jaffe:
“You’re already indirectly paying a network, publisher, or radio station money to persuade people to purchase your product. So why not cut out the middleman and pay them directly?”
Up until now the focus has been mainly on the customers themselves. But if you really want to blow the top off the funnel, it’s time to start harnessing the power of the crowd. This is the most uncommonly used part of the flipped funnel, mostly because it’s the part that looks nothing like our old traditional world. So we need to look to those few who are doing it well today in order to get some guidance.
Nike sells running shoes. Millions of them. Yet they’ve created an amazing community around their “Nike Run London”, “Human Race” and Nike+ initiatives. So here’s what the decision process looks like when deciding where to go for their next pair of running shoes: do I buy from another brand, who may or may not have shoes that will be better suited for me, or do I buy again from Nike and get great shoes AND a world-wide network of people who share my passion for running?
Seems like a simple choice to me. Nike has even ingeniously made a critical part of the community an app that tracks your runs and gives you feedback. Then consider what you’ll say to your other friends who are in the market for new shoes. Powerful stuff.
If you think about everything we are attempting to do with the flipped funnel, it encompasses what has recently become the new buzz word in business, “customer experience”. After all, that’s the only thing the customer cares about, right?
One thing you need to do in order to make this happen is to ensure that your entire team is working on it. In this new world of smartphone video and social networks, it’s the front line employees that are the most visible, not the CEO. It’s not enough that you state a commitment to an “excellence in customer service”, you have to live and breathe it so that your customers experience it.