Everything is a funnel (will people come to my party?)
Whenever I hear a founder worry about whether anyone will buy their product, it triggers my own anxiety – but not to do with anything business related. It reminds me of how I feel when I host a party, or you know, used to host, pre-Covid.
The thing is, I get pretty bad event-hosting anxiety, which kicks in at around six people and gets exponentially worse with each additional invite. My worries range from whether people will have a good time, which I feel acutely personally responsible for, or choosing the right appetisers, to showing any of this anxiety on the night and not coming across like my obviously cool, collected, fun self.
But one worry trumps them all. What if no one will come?
Now, of course I know that’s not a rational fear. Sure, a few people may have already agreed to do something else. A few may be out of town. But 80% will probably say they will come. Oh but what if they say they will come, and then don’t? Of course, a few may cancel on the day (because they secretly hate me, obviously). But most will come. How many? I don’t know, but say 90% of those who said they would?
Let’s call this the “party-for-close-friends funnel”. Invite 30 people, 24 will accept, 22 will come. Sounds about right.
If you invite just 4 people, it is more likely that 100% of those who say they will come, will come – we don’t bail on small get-togethers without good reasons, at least not as a rule. But try to invite 300 people, and your conversion rate will drop – assuming you don’t have 300 really close friends, maybe 40% will say they’ll attend, and of those maybe 70% will actually come.
The thing that changes your conversions is both the format of the event and the audience, especially how well they know you.
This is a good way to think about your business. Not, “what if no one will buy?”, but “how many of those who see this will buy?”
And of course, once you start thinking about it this way, it’s worth getting more granular. How many of those who see this ad will click? How many of those who click will sign up? How many of those who sign up will place an order?
Why is this important?
Three reasons. One, it gives your anxiety the finger (my favourite reason). Two, it allows you to forecast your sales and lots of other things as a result (your CFO’s favourite reason). And three, of course, it empowers you to improve any of these conversions, just by investigating what may be wrong and addressing that. This information allows you to build a more successful company as a result, which may be something you care about.
How to actually go about mapping this out? Start by thinking through all the main funnels in your business. Start from the top – the widest channels, such as traffic to your various social accounts, website, landing pages, whether that traffic is paid or organic – and then track it all the way down to actual sales, the narrow end of the funnel. The data points will likely live in various places, but that’s okay – you just need to put them in one place to see things more clearly. Often, it could make sense to measure all this continuously, either manually or through an automated process, and review the numbers on a regular basis, perhaps monthly. If that sounds like too much right now, just have a go at what this looks like for the last month in your business – I guarantee there will be some interesting learnings hidden somewhere in those numbers.
This way, you don’t end up being sad that people didn’t come to your party when you in fact just didn’t send the invite.
Love and cash flow,
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