For as long as I’ve been working professionally the visual metaphor for moving customers through an experience has been The Funnel. The idea being that we have the most amount of people engaged at the beginning of an experience and as the experience goes on, fewer and fewer people are still participating in it. You’ve heard the terms ad nauseam, I’m sure. Sales funnel. Marketing funnel. Acquisition funnel. All of them designed to give us a mental model to work from and, ultimately, towards.
Teams are instructed to “fill the top of the funnel” to ensure that customers are always “flowing” through the process and that we stand the greatest chance of converting an ever-higher number users to our goal — be it a purchase, task completion or something else.
But something’s always bothered me about this metaphor. In the real world, everything you put into a funnel comes out of that funnel. It takes a bit longer but the idea that some of the liquid (for example) that you pour at the top of the funnel won’t make it out the bottom is ridiculous. Of course it will. There’s a hole at the other end! There had to be a better metaphor.
Recently, while teaching a class together in Europe, my pal Jeff Patton and I were batting around ideas on how to improve this visualization into something that not only made sense to our students but that also made sense in the real world. Out of that conversation Metrics Mountain was born.
The idea of a mountain to visualize the customer lifecycle makes perfect sense because our goal is to get as many of our customers to the top of the mountain. Realistically though, we’re going to lose people along the way. They’ll get tired. They’ll get bored. They’ll get distracted. They’ll defect to a competitor. Not every one of them will make it through (i.e., where the funnel metaphor breaks).
As your customers make their way up Metrics Mountain they are asked to do more and more with your product or service (the climb gets harder). Your goal is to make that as easy a process as possible and to motivate them to keep going. Some of them will do that — especially if you have a compelling value proposition, user experience and business model. But increasingly, as your customers make their way up the mountain, they will drop off.
In the image above I’ve chosen the popular Pirate Metrics framework from 500 Startups to illustrate Metrics Mountain however you can use any metrics framework that makes sense to your work, customer workflow or domain.
At the onset your goal is to acquire customers. You can drive many people to your experience through a variety of sources including advertising, referrals and other incentives. Once there, we encourage our users to activate their experience — to do something to indicate interest like creating a profile, downloading an app, putting something in their cart or following a friend. Not every customer you’ve acquired will do that so we have fewer people at that station on the mountain. Once activated we try to get our users to come back to the product on a regular basis. We want to retain them. Despite getting them to activate, a smaller number of users will be retained. If we’re retaining them it’s safe to say we can try to get them to pay for the service and drive some revenue. While your users may love your service and use it often, when asked to pay only a subset of your retained users will choose that path. And so we have smaller number of folks further up the mountain. Finally, if you can acquire a customer, activate them, retain them, get them to pay and sing your praises to the internet and refer you to their friends, they’ve reached the peak of the mountain. It’s a long climb and you’ll iterate your product’s combination of code, copy, design, value proposition and business model to get as many people there as you can but, realistically, this will be the smallest number of folks yet.
(In case you missed it, the acronym for this framework is AARRR hence the name ‘Pirate Metrics’ because, apparently, this is how pirates talk. I can’t confirm that as I’ve never met a pirate.)
I believe this is a far more realistic visualization than the funnel. It portrays the challenges we face as makers of digital products and services in getting our users through an experience and the risks our service faces along the way. Our goal should be to build the kinds of experiences that get the highest percentage of people to the top of the mountain.
What do you think? Is Metrics Mountain better than The Funnel? Can you see yourself using it in your day to day conversations?
Let me know.
As the year draws to a close, I just wanted to say thank you for reading my posts, engaging in discussions and attending my events and online classes. I’m lucky to have you as colleagues and peers and look forward to doing amazing things together in 2020 and beyond. Speaking of which, don’t forget to check out our Live Online Classes in Product Discovery starting in mid-January and the upcoming CSPO workshops I’m doing with the above-mentioned Jeff Patton in London, Paris and New York City class 1 and class 2.
Happy holidays and a great new year!