How to Assess the Effectiveness of a Company’s Marketing Funnel.

Disclaimer: This communication is provided for information purposes only and is not intended as a recommendation or a solicitation to buy, sell or hold any investment product. Readers are solely responsible for their own investment decisions.

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In the world of investing, understanding a company’s marketing funnel is crucial.

A company’s marketing funnel represents the journey a potential customer takes from initial awareness of a product or service to becoming a loyal customer.

By assessing the effectiveness of each stage of the funnel, you can gain valuable insights into a company’s brand health, overall marketing and business ROI.

Here are the various stages and how you can access them

1. Awareness & Consideration: 

   1. Google Search Trends

   2. Website Traffic using Semrush or Finviz

   3. Social Media Following & Engagement using Social Blade
      

2. Conversion & Loyalty

   1. Number of Users & Annual Recurring Revenue (ARR) through Stockanalysis.com > Metrics

   2. Usage statistics using Builtwith

   3. Revenue trend
      

3. Advocacy

   1. Google Reviews

   2. Product Ratings using G2 or Gartner

   3. Mobile App Ratings using App Sensor Tower

Estimating Conversion Rates & Forecasting User Growth

Investors can take a data-driven approach to assessing a company’s marketing funnel by analyzing key metrics across multiple sources. By leveraging data from Google Search Trends, SEMrush organic traffic trends, and the reported number of users from company disclosures, investors can estimate the historical conversion rate—the percentage of website visitors or search-driven interest that ultimately converts into paying users.

Once a company’s past conversion rate is established, investors can use future Google Search and organic traffic trends as a proxy for potential user growth. If search interest and website traffic show an upward trajectory, and the conversion rate remains stable or improves, this provides a basis for forecasting the company’s future user base and revenue potential.

Alternative Data Analysis: A Proven Method for Gaining an Edge

This approach mirrors the alternative data analysis techniques used by hedge funds and institutional investors. Just as satellite imagery has been used to track Walmart’s parking lot traffic to predict sales performance, search trend and organic traffic data can serve as leading indicators of customer acquisition and future revenue growth. [1]

By incorporating these data-driven insights into stock analysis, investors can better anticipate business performance ahead of earnings reports, gaining an informational advantage over those who rely solely on financial statements.

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