Note: This is an older article. I sold my MCN Power Up TV to Thunder Studios in January 2015. I now work as a consultant. Consider hiring me!

YouTube channels are a business like any other; you need to understand the conversion funnel process in order to fully optimize your efforts and be successful as a small business owner.

The conversion funnel for YouTube content owners looks like this;

YouTube Audience Engagement Funnel

Let’s talk about each type of person in the funnel and how they transform from one type to the next.

Public: This is anyone who sees your video but has not watched it. Your video can be discovered in search engine results like Google, Bing or YouTube itself. They may also see the video on Facebook or Twitter, or embedded into a blog.

The main thing that will determine whether someone clicks on your video or not is the relevancy of your video thumbnail to the interests of the person. If your video thumbnail doesn’t provide enough information to convince the person the video will be interesting to them, they won’t click on your video. This is why having good custom thumbnails for your video is so important.

You must understand that to get a single viewer, it takes a lot of people just seeing your video thumbnail. The majority of the Public will not watch your video, so you need to market your video a lot to get views to it.

Viewer: This is anyone who has watched your video. They were successfully convinced to click because of the information in your video thumbnail and are now watching your video.

Whether the person watches your entire video or not depends on only one factor; how well your video delivers on the promise your video thumbnail image gave. For example, if your video thumbnail is of a beautiful woman but your video is of a dude talking, you will probably lose your viewer immediately. This is because the thumbnail promised a video of a woman, not a man. This is why misleading thumbnails and video titles are a bad tactic to use.

An example of an effective video thumbnail is shown below.

Anatomy of a YouTube Video Thumbnail
Anatomy of a YouTube Video Thumbnail

Subscriber: This is a person who watched your video as a Viewer and decided to subscribe to your channel. This person took the effort to log into YouTube and then click the subscribe button because they want to see more videos from you in the future. Every subscriber is someone who is voting “I like your content“. They are giving you permission to contact them about new videos and other information. They want you to engage with them.

To facilitate the conversion of a Viewer into a Subscriber, you should have Calls to Action in your videos, usually at the end of the video in what is known as an end-slate. An example of an effective end-slate for converting subscribers is shown below.

Prospect: The Prospect is a Subscriber who has the financial means to buy the products advertised in your videos or related merchandise from you. To determine whether someone is a Prospect you must pay attention to their comments; if you are, for example, making a video game review and the person says they are going to buy that game, they have now identified themselves as a Prospect.

If possible you should keep Prospects in their own G+ Circle using the Insights tool of your YouTube Dashboard (only available to channels over 1,000 subscribers). This is so that you can send them videos and information designed to convince them to sign up for a mailing list, so you can directly offer them products.

Customer / Member: This is a Prospect who has decided to make a purchase decision based on your videos. They have bought a product advertised by a sponsor in your video, or they have purchased something directly from you like a t-shirt or an eBook.

They might also be a Member; someone who is opting into your mailing list, following you on all social media profiles like Facebook and Twitter. They might even be on your website forum.

This is one of your most valuable types of subscriber and the people you must cater to. Keeping these guys happy is key to getting them to convert to the next two phases.

Loyalist: This is a Customer who loves everything about your brand. They will watch every video you make, always fund your crowdfunding campaigns, and regularly make purchase decisions based on your endorsement. They make up a small part of your total subscriber base but they are the second most valuable to an..

Advocate: This is the most important type of subscriber. This person LOVES you, because your work has made a meaningful impact in their own lives. They not only make purchase decisions based on you and watch all your videos, but they regularly encourage other people to become Viewers.

The Advocate help you advertise your videos by sharing them, not just on Facebook but also making personal recommendations to their friends. They plug your channel on website forums the first chance they get in topics about great YouTube channels.

The Advocate is the person who will buy convention tickets just to meet you in person. They want your autograph.

The Advocate makes up the smallest percentage of your audience, but they are by far the most important.

What is the product in the funnel? 

The video itself is a product in the sense that you need to sell viewers on the reason to watch your video, but the video doesn’t generate money.

What generates money for your channel is sales of related merchandise to your videos (like t-shirts) and the ads that appear on your videos. These are the products you need to sell, and as you can see from the above chart it is a process to convert a viewer into a loyal brand advocate.

I have seen some YouTubers, in response to complaints about ads from a vocal minority, encourage their viewers to download ad blocking software. Don’t do that. Again, you want to run a business. If people won’t watch your ads they are not customers, so ignore these types of people.

You must learn to filter out criticism from the Viewers and Subscribers who will never convert into a Customer.

Your goal should not be to have everyone like you on YouTube. That is impossible anyway.

Your goal should be to build a sustainable business from the people who appreciate your work enough to support your career as a content creator.

Don’t help people deny your right to be paid for your work by encouraging them to use ad blocking software. That is counter-productive.

 How do I convert one type of audience to the next?

♦ Regularly release videos that reinforce your brand. Your video content must belong to the same niche, for example if you make beauty tutorials you must continue to make videos of interest to people who like beauty tutorials, like hair style or makeup tutorials.

If you make videos about book reviews, try to focus on a particular genre like sci-fi or fantasy.

If you make gaming videos, keep making videos about the types of games getting the most views (shooters, RPGs, puzzle games, etc).

You can make videos about other topics but the bulk of your content must be focused on the type of content your audience is most interested in seeing from YOU.

The quality of your videos must always be rising, never declining. You can’t make one video with top-of-the-line professional After Effects motion graphics and then make another video with title cards you made in MS Paint. Always keep improving your production values. The audience will be upset if your quality drops.

Engage with everyone. Anyone who comments on your video, even if it is a negative comment, you should engage with them as much as humanly possible. This is especially important to do even when you are big. Again you want to engage to convert subscribers into not just customers who buy t-shirts, but people who will become your top brand advocates.

You need to grow a KISS Army type of group; a fan club. You can’t do that if you don’t engage with people. Even engaging with the haters will show your fans that you are a real person who genuinely wants to respond to everyone.

Build a website. It is hard to do things like get people to signup to mailing lists or buy your merchandise if you don’t operate a website that makes the process easy for them.

I would not recommend using cheap auto-template sites like Wixx for your website. You can get cheap hosting for as low as $10 a month for a WordPress site, and purchase your own domain name for as cheap as $15 per year. With a WordPress site you’ll be able to install plugins like content lockers that convince people to either follow your social profile or sign up for an email list.

This is a general article on the process of audience development for a YouTube channel but after reading it, you should have the general idea down. I hope this article helps you!

Have any questions or comments? Feel free to leave them in the field below.

*Also consider purchasing my book, The Lean Channel: YouTube for Entrepreneurs if you’d like more information about how to build a business by running a YouTube channel. 



Carey Martell is the President of Martell Broadcasting Systems, Inc. He is also the founder of the Power Up TV multi-channel network (acquired by Thunder Digital Media in January 2015). Carey formerly served as the Vice President of Thunder TV, the internet television division of Thunder Digital Media. In the past he has also been the Director of Alumni Membership for Tech Ranch Austin as well as the event organizer for the Austin YouTube Partner monthly meetups. Prior to his role at MBS, Inc. and his career as a video game developer and journalist, Carey served in the US Army for 5 years, including one tour of duty during Operation Iraqi Freedom. Carey is a member of the Veterans of Foreign Wars. Carey also moonlights as the host of The RPG Fanatic Show, an internet television show on YouTube which has accumulated over 3.7 million views.