Relevance, Not Volume
Funnel is a popular word in the world of tech. You can “funnelize” everything these days. Everyone has a sales funnel, a customer funnel, a talent funnel and so on. But I think we’ve failed to appreciate how the dynamics of funnels have changed dramatically in the past 10 years.
Funnels have long existed but have been characterised by two main problems: volume and relevance. For most of history volume was the main challenge. There were serious logistical, financial and other barriers to building up volume for your funnel, whatever funnel it might be. Think about a recruiting funnel for 18th century militaries. You had to have recruiting offices in every major town and city in the country — staffed and organized into a coherent system. Worst case scenario you would have to conscript. Imagine pulling up the list of all adult males in the country and meticulously going door-to-door to enlist them. That’s a monumental effort.
What about for a corporation in the 1960s? Well you’re sales funnel was probably very “Mad Men-esque.” Your executives invested a tremendous portion of their time, at tremendous cost, in schmoozing and building a network that eventually culminated in sales.
Social networks have dramatically changed the equation. They have solved the volume problem. Now for a couple hundred bucks you can reach hundreds of thousands if not millions of people anywhere on earth. Even at a 1% conversion rate that’s thousands of new leads into whatever funnel you’re building. That is truly extraordinary. The capital-intensity of creating volume is orders of magnitude less than before.
But relevance has come to the forefront as a result. It’s always been an issue but has been on the backburner, because getting enough volume for your funnel has been so expensive historically. But now it has taken center stage. You can get thousands of leads into your funnel but that doesn’t mean you can get them to the end of the funnel and convert them.
Now you can post a job on Indeed.com or Monster.com and get hundreds of applications. But are all these applicants relevant? Are they likely to be good fits? Do they have the right experience? The vast majority likely don’t. But you have to spend dozens of employee hours figuring out who is, even before you begin interviews.
I’ve noticed a shift recently. I’ve talked or seen a whole new generation of companies being built to fix the problem of relevance in funnels. Why? because funnels are broken. The education funnel is, the social funnel is, the employment funnel is and so on. There aren’t volume problems in these spaces, rather there are inefficiency problems.
All the companies I’ve talked to have committed themselves to solving the same problem — getting the right people into your funnel. That is to say getting relevant people into your funnel. Growth marketers want to create brands with social media communities made up of members with a genuine interest in the brand and with a desire to engage. Businesses want applicants with the right backgrounds and career goals to apply to their jobs.
These companies envision doing this in different ways. Some are building in friction into the funnel so that weak leads dropoff. Others are using machine learning and hunting for patterns. Others still are building niche communities of users that are highly-relevant (e.g. Amino Apps).
Relevance is always contextual. Who and what is relevant depends on the goals of your funnel. But since volume is for the most part a solved problem, I think we should all be paying more attention to relevance when building our own funnels. Because volume carries with it a tremendous processing cost that can distract you from your business. Don’t mistake a funnel with high volume as necessarily being one that is successful. Relevance, not volume is the key metric.
If you liked this, click the💚 below so other people will see it here on Medium.
