Working in product has me thinking about funnels a lot. What makes one compelling? How does it expand? How do we make the experience seamless? I could list questions for hours. But the one I spend most of my time on now is what is the path of least friction from discovery to value.
Funnels can be of all sorts of shapes and sizes, but ultimately have a similar outcome. They’re not exclusively sales focused. Think about Netflix vs. Tiktok, for example - right from the point of signup to value. Netflix’s (left) and Tiktok’s (right) funnels look something like the following:
Neither funnel is right or wrong, but as you can see there are fewer steps in Tiktok’s and noticeably less friction. Netflix has a ton of sign up steps, requires credit card information, and then drops you in a seemingly endless pool of content. You’ve been there, just like me, you spend 30 minutes just trying to pick the movie. Tiktok has minimal friction if you intend to sign up. It prompts you with how to use the product while also educating you that the more you use it the better and more personalized your feed will get. There are certainly implications with that, given that Tiktok is a Chinese company. But macro-threats aside, the ByteDance team knocked their funnel out of the park.
Both Netflix and Tiktok have incredible user bases. Yes despite Netflix’s report, it’s still one of, if not the last, streaming service we’d all choose to eliminate. Each company’s funnel makes us envision the value we’d get using the product. Netflix describes its thousands of titles and original content, while Tiktok displays what kinds of videos we can watch or create.
Once we use the products as well, that value we get comes from being anti-utilitarian. Yes, as it turns out, both Netflix and Tiktok were not designed to be practical. Netflix barrages you with content and plasters originals across the top of the home page real-estate. It plays trailers within the experience. Both of which are features of its wide sub-funnel to get us to watch content. But the browse design isn’t helpful, because it doesn’t particularly help us find what we want to watch easily. Yet, like I mentioned earlier, we’re still going to spend a lot of time finding the right show or movie to watch.
Tiktok is a bit different. Firstly, the homepage isn’t really a homepage, but just a direct trip to a video suited to your tastes. Dopamine. Its videos are full screen, meant to capture all of your attention and “gather really accurate signal from the viewer on each video”, per Eugene Wei. The UX is so simple on the For You Page (FYP) that you’re instantly consumed by whatever is on your screen and thinking about the content almost exclusively. As Nikita points out in the Tweet I shared above, the app is much better at making you crave that delicious looking sandwich or dancing around with friends than actually making you get up from your couch to do so.
Funnels can be great by both minimizing the thinking someone has to do and by minimizing the steps from discovery to value. So how do you measure if a funnel is great? You can take a look at some of the simpler metrics - conversion, retention, CAC, etc. They all depend on the end product of course. From there, things tend to vary. Cohorts need to be created (and honestly do for retention as well), intensity needs to be measured (daily active users, monthly, etc), and much much more. Funnels are different and no two companies use all of the exact same measurements.
The tricky thing about funnels, aside from being hard to nail, is that they’re often REALLY expensive. Instagram or Facebook ads, Youtube ads, subway placements, recruiting, and more cost a lot of money. Especially for e-commerce and D2C brands, they’re most common customers, who have large war chests with heavy allocation to that marketing effort. Exploring new, low-cost top-of-funnel opportunities can change the trajectory of a company, creator, or whomever else is trying to build a funnel.
Take a look at the below, the Google searches for both Tom’s Diner - a song first released in the early 90’s, and Giant Rooks, a band that released [a cover on Tiktok that went viral. The video has 105.5M views, which was actually a ridiculous number to type. But it cost them close to $0 to make, certainly less than a Tiktok ad that would even get half of that view count. Their Spotify song has 91M listens, which shakes out to about $455,000 in earnings in a little more than a month and a half (the Tiktok was published on 3/8). That’s before counting the millions of listens that other songs got. Given that they were hovering around zero prior to the Tiktok according to the chart, I have to assume their song on Spotify had sub-100k listens before as well.
While Giant Rooks is in contention for best use of their funnel ever, or maybe that becomes Tiktok’s GMV somehow, the most important part of the funnel usually are the two points I mentioned above.
1. Minimize the thinking required
2. Minimize the steps
Users got to listen to the song in purest form while on Tiktok and could easily punch it into Spotify. Not technically traditional, but it fits the discovery to value model that each funnel represents. Ingenuity at its finest. Funnels can be simple, and they should be, but the fun part is creating the compelling piece to get someone to go all the way through.
PS: If you can’t tell, I’m OBSESSED with how Tiktok works, it’s amazing. It’s also addictive and fun to use.