Podcast Summary: Customer-Led Growth: Why Funnels are Outdated with Georgiana Loudy

Podcast Information:

• Title: Positioning with April Dunford
• Host: April Dunford
• Guest: Georgiana Loudy
• Episode Title: Customer-Led Growth: Why Funnels are Outdated with Georgiana Loudy
• Release Date: October 3, 2024

Introduction

In this insightful episode of the Positioning podcast, April Dunford welcomes Georgiana Loudy, the founder and principal consultant at Forget the Funnel. Georgiana, a seasoned expert in customer experience mapping, delves into why traditional marketing funnels are becoming obsolete and introduces a more holistic approach to understanding and optimizing customer journeys.

Challenging the Traditional Funnel Model

Critique of Funnels: The conversation begins with Georgiana challenging the effectiveness of traditional marketing funnels. She argues that funnels are fundamentally lazy and ineffective because they oversimplify the customer journey and fail to account for the nuanced ways customers interact with products.

Georgiana Loudy [02:38]: “I just think [funnels] are really fundamentally very lazy and ineffective. So lazy. Because it like flattens our view of the customer.”

She emphasizes that funnels categorize customers too generically, ignoring the unique needs and behaviors that differentiate one customer from another. Additionally, funnels often omit critical phases of the customer journey, such as the pre-purchase considerations and post-purchase expansions, making them unsuitable for businesses with recurring revenue models.

Georgiana Loudy [04:23]: “And then on the flip side of it, especially for recurring revenue businesses, if you think about your job as being done when somebody like converts to being a customer that is the bottom of the funnel, you're not in business anymore. Like what, what business are we in?”

Introducing Customer-Led Growth

Concept Overview: Georgiana introduces the concept of Customer-Led Growth, a methodology outlined in her book Forget the Funnel. This approach focuses on deeply understanding customers' relationships with the company and operationalizing this understanding to make informed decisions that enhance customer experiences and drive business growth.

Georgiana Loudy [05:29]: “We call it customer LED growth, but the name doesn't really matter at all. But essentially it starts with really understanding more deeply understanding your customers...”

Key Components:

1. Deep Customer Understanding: Conduct comprehensive customer research to map out their journey from before they are aware of your product to becoming loyal advocates.
2. Operationalizing Insights: Translate customer insights into actionable strategies that align with business goals and optimize each stage of the customer journey.
3. Identifying KPIs: Develop key performance indicators that accurately measure the success of guiding customers through critical moments of value.

Jobs to Be Done Framework

Integration with Jobs to Be Done: April inquires about how Georgiana's approach intersects with the Jobs to Be Done (JTBD) framework, a concept familiar to April and previously discussed with other experts like Bob.

April Dunford [12:19]: “I want you to talk about how this works... how does that intersect with job stuff?”

Application of JTBD: Georgiana explains that using JTBD allows for identifying multiple distinct "jobs" that customers hire a product to perform. Even within a small sample of customer conversations, they consistently uncover multiple, unique jobs that are often overlooked when businesses treat their customer base as a homogeneous group.

Georgiana Loudy [12:21]: “Every single time we've run this... we've identify more than one job to be done...”

By leveraging JTBD, Forget the Funnel helps companies recognize diverse customer needs and tailor their messaging and product development accordingly, leading to more effective and resonant marketing strategies.

Voice of Customer vs. Journey Mapping

Defining Terms: A significant portion of the discussion revolves around differentiating Voice of Customer (VoC) from Customer Journey Mapping. Georgiana highlights that while VoC can be valuable, it must be grounded in specific goals to be effective.

Georgiana Loudy [23:22]: “Voice of customer is great, it's super useful, but it needs to be grounded in a goal.”

Practical Application: Forget the Funnel incorporates VoC into their process by using it to inform JTBD research, ensuring that customer feedback directly influences strategic decisions such as messaging and product enhancements.

Georgiana Loudy [24:22]: “We have to put it together. Like it's part of our process to take those conversations and parse it through the lens of the jobs to be done.”

This integration allows companies to not only collect customer feedback but also to actionable insights that drive customer-led growth.

The Role of AI in Customer Journey Mapping

Exploring AI Capabilities: April brings up a contemporary concern: can artificial intelligence replace the in-depth customer journey mapping process? She notes that many companies are tempted to rely on AI to analyze vast amounts of customer data.

April Dunford [24:56]: “Like, we can't just do this with the AI?”

Georgiana's Perspective: Georgiana expresses caution regarding the reliance on AI for understanding customer journeys. She points out that while AI can assist in data analysis, it lacks the ability to grasp the emotional and contextual nuances that human-driven research uncovers.

Georgiana Loudy [25:31]: “If you're relying on AI to pull meaning out of a conversation, that is, that is what is scary to me.”

She emphasizes that a foundational understanding of customer motivations and contexts, often achieved through human-led research, is indispensable and cannot be wholly replicated by AI.

Case Study: Transformative Results with Customer-Led Growth

Success Story: Georgiana shares a compelling case study illustrating the effectiveness of their approach. A company with outstanding content and high traffic but stagnant revenue was struggling because they were targeting a broad, low-quality customer base. By refocusing their efforts on high-value customers through refined messaging and strategic website updates, they achieved dramatic improvements:

• Signups Increased: Nearly 90% increase after updating three key website pages.
• Conversion Rates: Trial-to-paid conversion rates surged by 40%.

Georgiana Loudy [31:57]: “We updated three pages on their website... the signups on their website increased nearly 90%. ... their trial to paid conversion rate increased 40%.”

This case underscores how precise targeting and understanding customer needs can lead to substantial business growth without escalating marketing spend.

Conclusion and Contact Information

As the episode concludes, Georgiana provides information on how listeners can engage with her and her consultancy. Interested parties are encouraged to visit forgetthefunnel.com for more details and to initiate contact.

Georgiana Loudy [32:09]: “Forget the funnel dot com. Check out our website. Get in touch with me. Gia, forget the funnel.”

April wraps up by reiterating her own consultancy services, inviting listeners to reach out if they need assistance with positioning.

April Dunford [32:30]: “If you're interested in learning about how we might work together, you can visit aprildunford.com/consulting.”

Key Takeaways:

• Funnels are outdated because they oversimplify the customer journey and ignore critical phases.
• Customer-Led Growth emphasizes deep customer understanding and operationalizing insights to drive growth.
• Jobs to Be Done framework is essential for identifying diverse customer needs and tailoring strategies accordingly.
• Voice of Customer is valuable when tied to specific goals but must be integrated thoughtfully into broader strategies.
• AI cannot replace the nuanced understanding achieved through human-led customer journey mapping.
• Focused targeting on high-value customers can lead to significant improvements in signups and conversion rates without increased marketing spend.

Notable Quotes:

• Georgiana Loudy [02:38]: “I just think [funnels] are really fundamentally very lazy and ineffective. So lazy. Because it like flattens our view of the customer.”
• Georgiana Loudy [05:29]: “We call it customer LED growth... understanding more deeply understanding your customers...”
• Georgiana Loudy [12:21]: “Every single time we've run this... we've identify more than one job to be done...”
• Georgiana Loudy [23:22]: “Voice of customer is great, it's super useful, but it needs to be grounded in a goal.”
• Georgiana Loudy [25:31]: “If you're relying on AI to pull meaning out of a conversation, that is, that is what is scary to me.”
• Georgiana Loudy [31:57]: “We updated three pages on their website... the signups on their website increased nearly 90%...”

This episode provides a comprehensive overview of why traditional funnels are becoming obsolete and how a customer-centered approach can lead to more effective marketing and business growth. Georgiana Loudy's expertise offers valuable insights for entrepreneurs, marketers, and business leaders aiming to enhance their understanding of customer journeys and optimize their strategies accordingly.