Starting and maintaining a successful business takes time, energy, and a lot of love. But it also requires a deep understanding of the many nuanced elements that make up a business: from the product itself to fundraising to marketing.
Understanding each step of the customer journey and how they react to your product and marketing strategy can help you understand and develop your business more thoroughly. And fortunately, there’s an easy and digestible way to make a start on this otherwise overwhelming task: the marketing funnel.
Important queries like who owns the funnel, how your business experiences it compared to your customers, how it varies from business to business, and how it can be used to generate more sales leads are all built into the framework of the marketing funnel.
So let’s work out how to understand the marketing funnel, covering everything from awareness to conversion, to the customer experience.
What is the marketing funnel?
In short, the marketing funnel helps businesses understand the steps their audiences take as they turn from leads into customers. It’s a key part of any brand’s marketing strategy, but it’s often used by sales teams too. It helps both departments attract wide audiences and then narrow them down to the core group the business wants to target.
American Philosopher John Dewey developed the concept in 1910 as a visual representation of the steps a person goes through before buying a product. The six stages look at the process before, during, and after making a purchase and can help businesses and marketers make their product appear more appealing to the customer from their first point of contact.
Of course, very few marketing efforts lead to an immediate purchase, which is why the marketing funnel is a funnel rather than a cylinder. It begins with the large number of people who have a problem that can be solved by the product, and narrows as the customer researchers, evaluates, and eventually decides which product or business is best matched to their needs.
So, if you have a business that sells a product that you believe people need—and want people to buy—then a marketing funnel that helps you understand how to capture those people’s sales is an essential element of your marketing strategy.
The stages of the marketing funnel
The nature of business means that there is never a one-size-fits-all approach to marketing. But the marketing funnel has remained fairly consistent for over a century. So if you understand and follow these six steps, you should be able to form something that works for your market niche.
The point where your customer first discovers your brand—i.e. becomes aware of you—is where the lead generation begins. A marketing strategy and various campaigns that aim to target the right demographics for your product are usually how this awareness is made.
It’s one of the most important steps as it’s where potential customers will make a snap decision about whether or not they’re aligned with your brand. For some, this could be a good point to gain a customer’s contact information, social follow, or other information that will help you stay in touch so they keep you front of mind.
Once they’re aware of your brand, warmer leads will begin to show an active interest in what you do. It’s where you can start to build a connection, for example sending them relevant marketing emails and other branded content that appeals to what you already know about them.
Now your customer is interested in what you have to offer, they will begin to consider the different opportunities for your product to address their needs or issues.
Trials, discounts, and other incentives are a good way to guide them towards your product or service over the competition.
Intent to buy doesn’t guarantee a sale, so this is your business’ chance to really win the customer over. If they’ve added an item to the cart, completed a free trial, or otherwise engaged with your product directly but not yet clicked ‘buy,’ then you know the intent is there.
Take this as your sign to prove your product as the best option for them. Why is it better than your competitors’? How can you prove that yours is the product they need? It could be sharing testimonials, following up with an automated email, or targeting them with other relevant information that could lead them to make the sale.
You’ve acted on your potential customer’s intent and now they’re making the final evaluation of whether or not to purchase. The key here is to keep positioning your offering as the best option without scaring them off. To ace this step, your marketing and sales team should work closely together to develop a process that secures the sale from a nicely nurtured lead.
As the name suggests, once you’ve reached the purchase stage your customer is secured.
Now, the process is handed from the marketing team to the sales team who take care of your existing transactions. Now, the process begins again as you aim to entice them back and establish their loyalty.
B2B vs B2C marketing funnels
Business to business (B2B) and business to customer (B2C) are inherently different in the way they market their products and services. For example, B2B brands will often have a larger and more connected group to sell to, while B2C audiences are more likely to make purchasing decisions alone or on the recommendation of a very small group of people.
So to help the different kinds of brands adapt the marketing funnel to their audiences, there are a few aspects for marketing teams to consider:
- B2C customers are less likely to have direct interaction with your brand
- B2C customers are easier to reach using wider-reaching methods like automated email marketing
- B2B customers have more people directly involved in the decision-making process, including their own sales team
- B2B customers value recommendations about your brand and competitors made by other businesses
Non-linear marketing funnels
Some marketing experts and analysts now believe that the purchasing process is no longer linear and, therefore, the marketing funnel no longer applies. Due to our increased access and exposure to information, leads can enter the funnel at any step, and are more likely to carry out their own research rather than being swayed by persistent marketing.
A CEB report suggests that B2B customers, in particular, are likely to skip 57% of the marketing funnel, or navigate it themselves before they speak with a sales rep. Theories like this have led to alternative funnels, like McKinsey’s consumer decision journey which represents the modern funnel as a circle in which customers touch into the process at certain points but, overall, the purchasing process is able to fuel itself.
Other funnel alternatives include:
The AIDA model takes the new digital landscape into account and is often used by brands that use social media as one of their main marketing channels. Awareness, Interest, Desire, and Action are the four main cognitive processes customers go through, but this model identifies that the customer and the brand are no longer the only two elements in the relationship. All four steps can be influenced by third parties and other customers thanks to social media.
This pleasingly-named model includes a “Top of the funnel” to generate leads, a “Middle of the funnel” to generate prospects and a “Bottom of the funnel” to generate sales. Each segment of the model leans on SEO and other marketing optimizations to guide users through their funnel. And, rather than focusing on specific cognitive steps, this one takes a broader approach in essentially whittling the six-step funnel down to the Awareness, Consideration, and Decision processes as the three most important times to optimize the user journey.
If you know that your audience is likely to interact with your sales process in a way that is not linear, or doesn’t align in an obvious way with the traditional funnel then it’s worth exploring the contemporary alternatives, many of which have been developed to cater to a largely digital audience.
However, many still argue that the traditional funnel is still an effective way to consider the different stages that a buyer might move through, regardless of where they enter the chain.
The marketing funnel from the customer’s perspective
To truly understand your customer’s journey through the funnel, many brands choose to ‘flip the funnel’ (i.e. experience it from their customer’s point of view) as they develop their strategy. But it’s not as simple as just flipping the existing six steps. A customer doesn’t consider themselves ‘a lead’, after all. Flip the funnel into the customer’s perspective with these four behaviors:
Your customer is already a customer, so they know what you do and, presumably, like it. So the next step is to encourage them to return. You need to consider what steps will nurture their next purchase, which is likely to be similar to your bottom-of-the-funnel activities from the lead generation process.
Loyal customers don’t just come back to make more purchases, they truly identify with your brand and what they do. These customers are more likely to actively engage with your marketing and feel they have a connection with you and your product.
The next step after their own loyalty has been secured is referral. This is where a customer who already loves what you do recommends your product or service to friends and possibly leaves positive reviews for you online.
Not many customers become active advocates for brands, but those who do are highly valuable. Anyone from paid influencers to super-loyal fans can evangelize for your brand. This could involve paid promotions, discounts in return for promotion, or product reviews in return for free items.
Existing customers advocating for a brand is an extremely effective way to convert other potential leads into sales, as they’re more likely to trust another person who has already had a good experience with your brand and product.
Keeping up conversions
The main goal of your marketing funnel is to secure sales—and then to keep bringing those customers back for more. With consumers more dependent than ever on digital content, your sales and marketing teams should work closely together on the purchasing process that customers will take on your website, but also through your social media and email marketing.
With a strong understanding of your funnel, and both teams willing and open to work together to secure sales rather than compete for them, your chances of developing an effective and productive funnel will be exponentially higher.