Symptom of poor positioning: A leaky funnel

If you’re getting leads but each stage of your funnel seems to have a low conversion rate, that is a clear sign that there might be a positioning problem. The reasons a leaky funnel can signal a positioning issue are similar to why high churn is a sign of positioning issues: There is a disconnect between people’s expectations about the product and the reality. If the prospect figures out that the assumptions they’ve been making are incorrect — in a bad way — before they buy, you have a leaky funnel. If it happens after they buy, you have churn.

In an ideal scenario, someone enters your marketing / sales funnel and becomes a lead after hearing about your product in some way and determining it might be a good fit for their use case. Chances are, they don’t know a ton about the product at that moment, but what they do know is your general positioning. Whether they’ve read an article about you in The New Stack, heard about you on a podcast or had a friend recommend they check you out, the thing they will remember is your core positioning. The friend, article or podcast will describe your product as “an X to do Y.” Based on that statement, they will make a series of assumptions about what features the product has, what types of workloads it is appropriate for and what types of companies would benefit the most from the product.

If these assumptions are affirmed every time they have an interaction with the company, from visiting your website to talking with a sales engineer, they feel like they’re in the right place. If every interaction with the company confuses them, makes them question their original assumptions and/or reveals that in fact the use case or feature they are most interested in is not supported, they will get the heck out of there.

Not all deals will close in the first scenario, but much more of them will than in the second.

There are other reasons you might have a leaky funnel: Not all startups have a well-defined funnel to begin with and you might have trouble taking people on the conveyor belt from webinar attendee to buyer. But if it seems like people are dropping off in the sales process and you can’t figure out why, evaluating your positioning and the assumptions it creates is a good idea.