A guide to the marketing funnel
Reema Trivedi
Senior Marketing Leader | Strategic Marketing Growth Catalyst | Lead and Demand Generation professional
The marketing funnel is a visual representation of the consumer purchasing process. It provides a roadmap for businesses to nurture leads from the initial awareness (top-of-the-funnel) stage through the middle-of-the-funnel stages, where potential buyers research and compare their options, and ultimately to the bottom of the funnel, where they make a purchase.?
Ideally, the lead-nurturing process would extend beyond the purchase stage, with businesses encouraging customers to become loyal advocates of their products, services, or brands. Many marketers consider this an additional stage of the funnel.?
Depending on the type of business and the goods and services it provides, the activities and outcomes at each stage of the funnel may look different.?
Let’s just say that you are selling four main products:
It’s highly unlikely that somebody comes across your name, researches everything that you have to offer, and then immediately decides to buy your most expensive one-on-one coaching program.
In fact, that hardly ever happens.
For customers to purchase your products, they first need to be convinced that they are making a good investment. They need to trust you. They need to feel like the risk is relatively low.
In short, they need to ‘get to know you’ through a process. They need to have different touch points with you over time. They need to see consistent value from you over time.
And that’s what a marketing funnel does.
It takes your customers from the first point of hearing about you (e.g. through your blog or through an interview you gave on Youtube) and takes them through all the steps until they become frequent buyers of your products.
For example, inbound marketing plans may use search engine optimization to drive traffic to a website or build a social media platform to?generate?brand or product?awareness, whereas outbound marketing strategies rely on more traditional methods of prompting customers toward the top of the funnel. These tactics may include?billboards, direct mail,?or?cold calling.?
In both cases the marketing funnel is a tool to help businesses narrow down a broad group of potential customers to those who will take some sort of action. In most cases, this means handing over their money in exchange for the company’s product or service.?
The action could, however, be any of?a number of?conversion goals, including:?
Regardless of the strategy or the outcome, the marketing funnel is a?key component of business operations?that allows companies to track the customer journey and provide effective, appropriate touch points at each stage.?
The three layers of a marketing funnel
1. The prospecting system.
A prospecting system is basically a way of getting a prospective customer to know you and getting them to receive regular updates from you (e.g. by subscribing to your e-mail list or by following your Medium account).
Once you have gotten people through this stage, you can:
2. The sales conversion system.
A sales conversion system is basically everything that happens once you have gotten somebody to subscribe to one of your channels. What you want to do is to slowly build trust with your potential customers and then eventually to convert him or her to buying one of your products.
You continuously provide value through things like free weekly newsletters, podcasts, free reports and so on and so forth, and then you occasionally share one of your products with your target customer.
Your system automatically keeps track of who bought and who didn’t buy.
If somebody didn’t buy, you can send them follow up e-mails asking why they didn’t buy and what their objections were. You can use these as data points that will tell you more about how you should market your products in the future.
Obviously, customers sometimes just aren’t ready to buy.
They might really want to join your coaching program, but they just don’t have the money to pay for it. A good system will allow you to track such things and then get back to your potential customers later.
You will have to find subtle ways of reminding your potential customers on a regular basis that your book is still available for purchase.
They might not buy the first time you offer it to them. But they might buy it the seventh time.
Again, a good system keeps track of where your customers are in the life cycle and then adjusts your offering accordingly.
3. The system to maximize customer lifetime value.
The people who have already bought from you also are the people who are potentially the most valuable to your business. People who buy from you once and are happy with the experience, are much more likely to buy again.
So you need a system that caters to people who have already purchased one or more products from you.
You need to keep track of who purchased what products.
And you can offer these people those products, which they haven’t bought yet.
Obviously, you can’t keep track of such things for every single of your customers by yourself. That’s why a good marketing funnel automates this process for you and keeps track of the data automatically.
Visualizing the Customer Journey
Marketing funnel, sales funnel, purchase funnel, AIDA model or customer journey. What these conceptual models all have in common is that they are attempts to map out the cognitive and behavioral process that customers go through when searching for a certain product or service that would fulfill their needs. The theory behind it states that customers go through several stages or phases before making the final call to purchase a company’s product. By mapping out these stages and by stepping into your customer’s shoes, you can see your company from the customer’s point of view and improve where needed. This article will explain a more widely applicable version of the marketing funnel and how to use it yourself.
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Awareness
The Marketing Funnel starts off with the Awareness stage (sometimes called Attention). The goal of this stage is to gain presence and to introduce your brand to potential customers: they need to know that you exist. You could either actively reach potential customers through marketing campaigns or help them discover you more easily with their own (online) search. Awareness can be created through advertising, trade shows, direct mail, social media campaigns et cetera. In order for customers to more easily find you online, Search Engine Optimization (SEO) and Search Engine Advertising (SEA) are advised.
Interest
Now that you have the consumers’ attention, you want to create some interest. The goal of this stage is to show who you are and what your brand stands for. You are trying to build a relationship with your potential customers and gain trust. Give people valuable information, but don’t focus too much on selling your product yet. Throughout this stage potential customers begin to develop attittudes, opinions and hopefully interest in your company. Content creation is often used for this stage. Think about blogs, webinars, infographics, free e-books, newsletters et cetera. Keep in mind that customers can also develop negative feelings towards your brand, so be careful with what kind of messages you convey to potential customers.
Consideration
Once the customers’ interest in your company has grown, they might be willing to consider purchasing your products or serivces as well. In order to establish that, you first have to help them realising that your product is meeting a?need?or?desire?that they might have. Furthermore, you have to explain that YOUR product is the best option for meeting that need.?This stage is therefore all about positioning and showing off your unique selling points (USPs): what extra value do you have to offer to customers compared to competitors? People usually consider only 3-5 different brands before purchasing one, so you want to make sure your brand is among those. Persuasion skills and a good sales team can be very helpful during this stage.
Evaluation
Now that your brand has made it to the Consideration set, customers are likely to evaluate the options based on some personal criteria they might have. Even though selection criteria may vary from person to person, you might be able to find some general patterns by looking at the most often used criteria. Continious customer feedback, surveys and focus groups will help you figuring out what customers in general find most important about a certain product. Once you are aware of these attributes, you could guide your marketing efforts in such a way that you highlight these features when showing off your product. Often used attributes that customers use to evaluate products are: price, quality, appearance, durability and after-sales service.
Decision
Finally the customer will make a decision to either buy or not buy from you. Important to note here is that the one making the decision does not allows have to be the same person as the one?purchasing?the product or?using?the product. Think for example of a child who wants a Nintendo console from the toy store. Even though the child might become the?user, it is the father who might?decide?whether he will get one, whereas the mother might be the one who will have to go to the store and?purchase?it. It is crucial to keep that in mind when targeting your marketing efforts to certain groups of people. The child for example should be targeted with news about the amazing games you can play on the Nintendo, whereas the father should be informed about the relatively cheap price and the durability of the Nintendo console.
Purchase
The actual purchase phase has been kept separate from the decision making phase because of two reasons. The first one has to do with the difference between the buyer and decision maker as explained above. The other one is because potential customers might still decide to NOT purchase your product even after they decided to actually purchase your product. This could for example happen when a customer is searching online for your webstore and has trouble finding it. Or because they have issues with the payment options on your website’s check-out page. Once your prospects have decided that they want your product, it is up to you to make it as easy as possible for them to make the purchase. In case of a webstore, try to get rid of unnecessary and distracting features and make the path to the check-out page as clear and simple as possible. This will help you to boost the conversion rate.
Repeat
Many marketing funnels stop after the purchase has been made. However, in the hypercompetitive and dynamic environment of today, it is key to keep customers with you for as long as possible. Repeat purchases and the retention of customers are therefore just as important as the initial purchase. Good after-sales service and customer relationship management (CRM) enlarge the chance that customers will become repeat customers. You could for example start by sending out an email a week after the purchase has been made asking for customer feedback. People generally love to give their opinion on subjects. From there on you can get to know the customer better and see if he or she might be interested in a repeat purchase. Depending on the nature of your business, calling or even meeting up face-to-face with customers are considered more personal and more effective. This latter is for example more appropriate in the auto or consulting industry where larger transactions are being made.
Loyalty
In the loyalty stage, customers start to develop a preference for your brand or company. They do not make repeat purchases anymore because you remind them of it, but because they genuinely like your product. Customer loyalty is therefore far more favorable than repeat purchasing. Loyalty means customers are hanging in there even when there may be some problems or negative rumours about your company. In order to create loyalty, your customers need to see the relationship between you and them as more than just a transactional relationship: connecting with your customers on a personal level is therefore crucial. Strong engagement, personalization, loyalty programs, community development, social identity and the sharing of values can help with that.
Advocacy
The final and optimal stage to reach with customers is the Advocacy stage.?Advocacy happens when your customers become something more than just customers: they become fans. Fans are usually so excited about something that they tell their friends and family all about it, they share positive reviews on social media, and they might even try to convince others to become fans as well. In other words, they are now helping you creating awareness just like at the beginning of this marketing funnel. When customers decide to become your own brand’s ambassadors, you know you are doing something right!
Marketing Funnel In Sum
The marketing funnel is a great tool that helps visualizing the customer journey or the path that prospects take as they become more familiar with your company and products, from awareness to purchase to (hopefully) the advocacy stage. It allows marketeers to map out the marketing campaigns that need to be considered in a more structural approach. Keep in mind that this is a general version of the marketing funnel and that you might need to adapt it somewhat to fit the business you are in. Let the marketing begin!
Though the customer journey may not be as linear as the simplified one expressed in the marketing funnel, the concept is still important. The digital path to purchase is anything but linear, and the digital marketing funnel accounts for the fact that consumers enter and exit and move around the funnel, and their shopping isn’t limited to a single store or geographic area.
With customers’ ability to shop anywhere at any time, brands should think about how they can reach them at all stages of the customer journey. The consideration phase in the digital marketing funnel alone can involve extensive research and comparison online by consumers, and is no longer limited to comparing products in store. Many brands have adjusted to this new way of shopping, and embraced this less-linear path to purchase by connecting with customers in authentic and valuable ways across the funnel.
Marketing funnels are also important for both lead generation and lead nurturing. In the awareness and consideration phases, brands use campaigns to attract new leads. In the decision and loyalty phases, brands use campaigns to nurture current leads and, eventually, help grow customers into brand advocates. Digital marketing and the marketing funnel are critical to connecting the dots between what channels, tactics, and content is driving the most attention, conversations, and, ultimately, sales for their brand.
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