Thursday, April 06, 2006

Funnel vs. Hub-and-Spoke Conversion Visualization

Shane Atchison of ZAAZ proposed a new way of thinking about conversion today, called the "hub-and-spoke model." He describes it this way:

The hub-and-spoke model places the product page at the hub, with multiple inbound spokes to products and outbound spokes to desired conversion paths and points. When you shift to this model, you get a more sophisticated view of your customers' interaction with your online business.

I think this is an interesting concept, but it is valuable as an additional view of visit or visitor conversion behavior, instead of as replacement to a funnel view. The funnel concept is still valuable in that it recognizes that there is a flow to the decision making process that consumers go through, and that your site needs to push people through that flow, whether it's literally a linear flow or not. If you think of the funnel as visitor based, not visit based, and you think of the funnel steps not as pages on the site, but qualification levels of the visitor (or how close they are to making a decision), you see that it is an extremely valuable visualization.

For example, your qualification levels might be:

  • Visitor (just the state of being a visitor - this isn't tied to a specific page of the site)
  • Browser (visitors who get to the category level or product level of the site -- or visitors who exhibit some other behavior indicative of a higher degree of engagement)
  • Shopper (visitors who add something to the cart, or who begin an application process)
  • Buyer (visitors who finally make a purchase, or who complete an application)
  • Repeat Buyer (buyers who buy again)

Although this looks linear, it isn't entirely linear in nature, as some consumers may enter the "qualification" funnel much more qualified (further down in the funnel) than others. There is no need to assume that a visitor must progress through each level, starting with the top. A visitor may become both a visitor and browser with just one page view, depending on where they land in the site.

And this is where the hub-and-spoke model that Shane proposes would seem to provide additional insight -- where do visitors enter the site, and how do they interact with the tools, features, and content that exist ultimately to drive purchase conversion (this is where revenue comes from, after all).

At the end of the day, each visualization is answering different questions and enabling a different kind of decision making. The visitor funnel answers macro-level questions about the level of engagement of prospects, and efficiency of the site at pushing prospects toward making a purchase decision. The hub-and-spoke answers micro-level questions about exactly how prospects arrive at the hub-level and move away from it. Together, the two views give marketing and site strategists the data needed to understand both raw visitor behavior, and the impact of visitor behavior on the conversion (and, by extension, revenue) performance of the site.

One note for banks and other financial services companies: Buyers in the example funnel above should be analogous to the revenue generating event you want your prospects to accomplish, or the closest thing to it on your site. For banks with online application processes that do not provide an approval decision online, "Appliers" is a good final step. For those that do provide an approval online, "Closers" would be a more appropriate final step of the funnel, and it should represent not only those that are approved, but those who actually accept the product and close the deal. Appliers, then, would be a good second-to-last step in the funnel, and this would give you insight into not only the efficiency with which your site encourages people to apply, but the quality of those people who do apply. It won't do you any good drive more people to apply if they're not credit-worthy.

1 comment:

customer experience company said...

These are great points. visualization can be especially effective throughout an association's website as well. If your looking to increase engagement, this is where to do it.