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How Your Startup Can Work to Build a Growth Marketing Funnel

Startups are hard not simply because they’re riskier or more competitive than established companies; it’s because those involved in startups (most notably founders) have to do everything themselves, essentially wearing many hats. 

They have to think about what customers want before their competition does. They need to ensure the product is genuinely innovative and differentiates from the rest of the market. Most importantly, they must be able to execute all these things simultaneously.

As well, since startup founders are so involved in the day-to-day activities, it is hard to establish a high-level corporate strategy or to get them to separate from the day-to-day activities and think strategically. Many variables can decide whether or not a startup will be successful, from the founders’ talents to their dedication and discipline. For startups to succeed, they need to find what works best for them and stick with it. 

Some startups decide on an idea and then start executing without ever questioning if this idea would work in the first place.  

With so many factors at play when deciding whether or not a startup will succeed, it is fair to say nevertheless that there are a number of reasons why establishing a growth marketing funnel within startups is extremely difficult to achieve. Let us examine a few right away.

Why is so Hard for Startups to Establish a Growth Marketing Funnel

1) Lack of a Concrete Market Position:  One of the most common causes of startup struggles with growth is poor market positioning. This includes not having a clear understanding of who your target market is or having the wrong messaging and branding for your target market. This is in part due to what was alluded to earlier about startup founders being so entrenched in day-to-day activities that they lose sight of strategy and positioning.  What it boils down to is that when companies don't have a strong presence in their market, it can be hard to gain traction and grow.

2) Lack of Financing:  Another common cause of startup struggles is inadequate funding. Many entrepreneurs don't have the necessary capital to launch their businesses or to sustain growth after launch. When entrepreneurs lack the resources needed to hire employees, purchase equipment, and create marketing materials, they can find themselves in a difficult position when it comes to growing their businesses, including being so hands-on that they never think strategically or establish positioning.

3) Lack of Established Processes and Systems: Startups also sometimes struggle with growth due to inefficient use of available resources. When companies don't have the personnel or technology to manage their operations and handle customer inquiries effectively, they can quickly fall behind in the competitive marketplace. Without efficient processes and systems in place, startups can find it difficult to keep up with the competition, especially if that remains the case on a day-to-day basis over an extended period of time in the business.

4) Lack of Awareness of Market Trends:  Finally, another cause of startup struggles with growth is an inability to identify market trends and adjust accordingly. It is important for entrepreneurs to stay informed about current industry trends so they can anticipate customer needs and stay ahead of competitors. While it is normal for entrepreneurs to get so lost in the day-to-day of trying to do everything as part of getting traction for a business that lacks resources, the problem lies in the fact that in failing to identify changes in customer demands or industry trends, startups can find themselves unable to keep up with the competition and unable to grow their business.

What exactly is a Growth Marketing Funnel?

Depending on who you ask, the standard growth marketing funnel can either have 4 or 6 stages.  The 6 stage model (AAARRR) focuses on  5 metrics, Acquisition, Activation, Retention, Referral, and Revenues with Awareness being the stage that triggers it.  The standard growth marketing funnel has four stages, but depending on your preferences, you can bundle up the steps to reduce them to three or break them down to come up with new scenes. However, the simplified approach is a four-stage model known as AIDA. 

AIDA works by following the client's journey right from meet-up/first interaction down to conversion. Here's a breakdown of what each of these stages means:



Stage 1: Awareness

It's at the Awareness stage that your would-be customers probably know about their problems. They also possibly know some solutions to the issues, although they have no idea where or how to solve these problems.



Stage 2: Interest

When the prospect is aware of their problems, they'll search for how to solve these problems. If they find a potential solution, most often than not, they indicate interest in the product or service by researching more about it and asking questions, etc.



Stage 3: Desire

At step 3, they already have some information about the brands or service providers that can help them solve a problem. This is where they evaluate and compare brands/competitors to find the one that best fits in their needs.



Stage 4: Action

This is the last stage in the customer's funnel journey. Consequently, here they've done their research and comparisons, etc., and have arrived at a decision as to a final service provider or vendor to buy from.

What is needed to create a growth marketing funnel:

Now that we have set the stage for why establishing a proper framework, and culture and creating a growth marketing funnel are very difficult, let us try to understand what is needed to entrench these conditions within startups.

How Startup Businesses Should Properly Leverage a Growth Marketing Funnel:

Knowing the stages in a marketing funnel is not the end. You still must find out the best tactic to use at each stage to maximize your returns.

However, this is where most marketers are at fault. According to this study, 37 per cent of marketers do not know where to start.

But, no pressure. Nonetheless, you can still build a sales funnel from any stage of your business.

What you should never overlook are your target audience and their preferences. After understanding them, you can subsequently utilize these findings to make the most of your sales funnel.

The best way to go about this is by establishing what is needed for the top, middle, and bottom funnel.

Top of the Growth Marketing Funnel:  

To build an effective sales funnel, it is important for you to establish the ToFu MoFu BoFu sales funnel


Studies suggest that over 96 percent of leads on your website are not prepared to listen to offers yet. For this reason, if a prospect doesn't realize that they have needs or problems to be solved, they won't make any purchase.

What if we told you that you might make them spot a problem you can help them solve? Consequently, this is where the awareness aspect comes in at the top of the problem.

As a marketer, therefore, your focus here would be to create awareness about the problem at hand and how you can help tackle it. You must get yourself in front of these prospects for them to realize the need, though.

In that case, you can use any of these tactics to get the word out about your brand and how you can solve problems:

Paid advertising campaigns that directly target specific groups of people looking for solutions.

Social media to increase the amount of social traffic to your web content that addresses the problems.

Demand generation marketing to grab attention.

SEO and blogging to bring organic traffic to your website.

Influencer marketing for brand awareness and help you reach more people.




Middle of the Growth Marketing Funnel:


After interest comes in after a prospect has recognized his/her need and is searching for solutions or information to solve the problems, this is what is referred to as mid funnel marketing.

For instance, 70 per cent of customers use Google at least 2 or 3 times when researching about their problems and possible solutions to them. As a marketer, this gives you the perfect position for staging yourself as a subject matter expert (SME) who will solve these problems quickly.

To point out, you can use any of these tactics:

• Provide case studies that touch on how you discovered a problem and solved it.

• Leverage the use of user-generated content like reviews etc. to build social proof for your brand and build a rapport with the client base.

• Connect with influencers and agree with them to do trial videos for your products/services so the prospects can understand how to use a product or how a service you offer can improve certain aspects of their lives or businesses.




The Middle of the Growth Marketing Funnel (The Desire Stage)

. Expounding on what we mentioned earlier, the prospect will only arrive here after interacting with your content or hearing about your brand, etc.

The prospect hasn't decided to make a purchase yet. But then again, they have a couple of options they're evaluating, for example, comparing the products/services you offer with those of a competitor.

Nevertheless, your goal here is to prove to the prospect that they can trust you with their investment and win them from your competitors. They should also see you as a valuable option compared to the others they have at their disposal.

You, therefore, need to keep in touch with them, engage them, and build connections with them.

Some of the strategies you can use to win the would-be customers here include.

• Showcasing the demos of your products or services.

• Offer freebies.

• Create guides on how to use certain products to show your understanding of their problems. 

• Create valuable content about your products/services.



Bottom of the Growth Marketing Funnel (Purchase/Decision):  



At this point, potential customers are already interacting with your brand. They know you're capable of solving their problems and are ready to make a purchase or subscribe to your premium services.

Notably, a slight mistake in the delivery of how you present a service could ruin all the trust you've built all along. Therefore, your focus should be on offering the product or service most appealingly.

It would be best if you also focused on making them repeat clients. Here are a few tricks to achieve this.

• Create a scarcity. You can accomplish this by leveraging the Fear of Missing out (FOMO, without manipulating your customers.

• Provide upsells of other products related to the one you're selling. You should, however, be keen not to appear like forcing these products on them as this can cause a severe breakdown of trust between you and the customers.

• Offer discounts.

• Give freebies/offers/promotions when they make a purchase or subscription.


The stages explained above form the backbone of any successful marketing funnel. With all things considered though, you must follow a specific growth framework or pattern, and this brings us to the steps of creating a growth marketing or sales funnel.




Steps to Creating a Growth Marketing Funnel:


Now that we have established what it would take for startup businesses to leverage a growth marketing funnel in an ideal scenario, now let us examine the different steps needed for startups to create a growth marketing funnel.




Step 1: Clearly define the steps  

The first thing you must do while setting up your growth marketing funnel is to define the various steps relevant to your business. What does this mean?

Basically, take some time out to look at your business and make note of all the important steps a person takes when they come in contact with your brand, which in a general sense is what we did earlier in this article.

For example, signing up for your newsletter or as a user on your website, adding an item to their basket, scheduling a call with your business, etc. Once you have this list ready, assign these actions to different steps in your growth marketing framework.

Or alternatively, at the acquisition stage, you can define the number of people visiting your website, at the activation stage, define the number of people who take an action like signing up for your newsletter or scheduling a call, or making a purchase, and so on.   

Keep in mind that each step of the growth marketing funnel should be associated with a measurable parameter. Once you have identified a measurable parameter at every stage of the growth funnel, we are ready to move on to the next step.   

Step 2: Understand the different metrics in the growth marketing funnel and assign your values  

To understand each step of the funnel better, let us take the example of a newly launched app. Below we will break down the different metrics of the growth marketing funnel in relation to the app to help you understand it better.

Acquisition: Generate new users  

The acquisition is the first stage of the growth funnel and it is essentially the first point of contact between your business and your potential customer.

For a newly launched app, the goal here would be to generate new users for your app. At this stage, you could even break down the acquisition stage into two, new user downloads and new user engagement.   

At the acquisition stage, you want to get into details about these new users signing up for your app. Where do they come from, Apple Store or Google Play. Next, you want to break down how they find your app, whether it is from Google search or from different advertising channels.

This will help you calculate the conversion rate for each channel and make it easier for you to understand the customer acquisition cost.

Now that you know how many users found your app, from those how many of them actually went ahead and downloaded it, next you want to know how many went a step ahead and registered on your app.   

Once you’ve analyzed the acquisition stage, your next step is to activate the interest of the registered users by showing them how your app can solve their problems.  

Activation: Engage users and keep them interested   

Activation is the second stage in the marketing funnel wherein the growth hacker studies the data to understand how many users who registered actually use the app. It is important to understand that not everyone who registers will use the app..   

So, at this stage, it is important to get the user/potential customer to understand the unique ways the app can be useful to the user and ensure that they are engaged so that they continue to come back and use the app.

A great way to do so is to give the user a quick tutorial explaining all the features of the app and getting them to try it out right there.   

Note: Remember to convert your new customers or existing customers into engaged customers.

Retention: Make visitors stick around  

As a marketer or a business owner, you know the importance of having an engaged audience. The users who use your app regularly add to your data pool, understand your value proposition, and are more likely to recommend your app to their friends and family.  

During this stage of the growth marketing funnel, the question that arises is how can you get your users to come back and use your product regularly. For mobile apps, the one way you can do so is by using push notifications.

At this stage, what you want to keep track of is the number of users who have opted in for push notifications and the number of users who have opted out. Additionally, from the ones who have opted in, how many of them actually click and get on the app following the notification sent out.  

These are important metrics to keep in mind while calculating the retention rate of your product. To calculate the retention rate, you will need to compare the percentage of users who returned on the 1st day after registration and how many returned on the 7th day after.   




Revenues: Create avenues for income  

The next stage is the revenue created from your app. How many people using your app are subscribing to an additional or premium upsell service? Are you meeting your revenue goals? Is your product fit for the audience using the app?

Dive into the data available and see how many users have shown interest, but have not proceeded to make the purchase. All of the relevant data needs to be mentioned in this section of the pirate metrics.   

Come up with ideas on how to convert regular customers into paying customers and therefore, increase the customer's lifetime value. Consider your growth marketing strategies and sales process and how they can be improved to convert more users into spending more money with you.

Referrals: Get your customers to endorse your app  

This is the final stage in the pirate metrics framework where the growth hacker looks at the referral scheme developed to boost the growth of the app. At this stage, the goal is to get existing users who find the app valuable to invite their friends and family to download and use the app.

Referral programs are known to drive viral growth. So, under this section, dive in and check the data to see how effective your referral scheme is and if it is driving the desired growth.   

Once you’ve filled in all the details in the pirate metrics, the next step is to get to the analysis.   

Note: A powerful referral program can be a game changer for your business, so pay attention to that.

Step 3: Find your bottleneck  

Now with the growth marketing framework laid out, you will be able to easily analyze the data and look at the big picture. The best way is to look at the percentage that survives from one step to the other in these growth marketing steps.

Once you have calculated this data, you can check which percentage is the lowest and which is the bottleneck that will need to be fixed.   

Step 4: Dive away from the problem in order to investigate the cause of the problem, in order to find the right solution  

Once you have identified the problem, you want to take a closer look to understand why you’re losing customers at that particular stage. To do so, you need to turn to the soft data and observe what people are doing.

You can use a tool like Hotjar for that, or you can send out a survey to understand the issue better. Once you’ve pinpointed the cause of the problem, you need to do the following listed below. 

  • Brainstorm ideas on how to solve the problem  

  • Rate them based on the ease and potential to problem solve  

  • Create an experiment to see what works better to solve your problem  

  • Execute the experiment and collect all possible data  

  • Study the outcome and react accordingly  

This, in a general sense, is how you solve your business problems and work on accelerating growth using the pirate metrics or the growth marketing funnel.   

Understanding your potential customers: The key to creating a growth marketing funnel within your startup

As a growth-focused business, you need to understand the customer journey, so you can adjust your marketing efforts accordingly. There are many types of marketing funnels out there, but there is no point in replicating an existing strategy that worked for another company but may not necessarily need to work for you.

This is where growth marketing consulting can provide extraordinary value. It’s important to have a deep understanding of the customer journey and all the different parts of your marketing efforts. Meaning, that you need to be on top of your sales teams, a customer success team, paid ads consultant, as well as having a thorough understanding of what would make for an effective content marketing strategy.

In terms of creating a growth marketing funnel within your startups, understanding your customers, the process they undertake in terms of learning about the products and services that benefit them, how customers find out about you, who helps them makes a decision on such matters—these are all key factors.

If your startup needs any help in terms of understanding any of these, and in terms of creating a growth marketing funnel within your business, we can help.  Reach out to our expert growth marketing consultants today to book a free no-obligation growth-marketing consultation.