HOW THE MARKETING FUNNEL WORKS FROM TOP TO BOTTOM
There is a lot of debate surrounding the marketing funnel from who owns it, be it marketing or sales, to whether or not it’s still relevant to today’s consumer buying process.
Here, we’ll explain what you need to know about the marketing funnel, and dive into recent changes and rising challenges for marketers. I’ll compare B2C and B2B uses of the funnel, break down the hype around the marketing vs. sales ownership debate, explain how the funnel can be flipped to create more leads, and explore nonlinear approaches to the funnel.
First, let’s establish a basic framework for the funnel, so we can better address these issues.
Source: skyword.com
WHAT IS A DIGITAL MARKETING FUNNEL?
The marketing funnel is a visualization for understanding the process of turning leads into customers, as understood from a marketing (and sales) perspective. The idea is that, like a funnel, marketers cast a broad net to capture as many leads as possible, and then slowly nurture prospective customers through the purchasing decision, narrowing down these candidates in each stage of the funnel.
Ideally, this marketing funnel would actually be a marketing cylinder , and all of your leads would turn into customers. Though this is not a reality for businesses, it is part of a marketer’s job to turn as many leads into customers as possible, thus making the funnel more cylindrical.
It’s important to note that there is not a single agreed upon version of the funnel; some have many “stages” while others have few, with different names and actions taken by the business and consumer for each. In the diagram below, we’ve done our best to pull out the most common and relevant funnel stages, terms, and actions so this information is useful to as many marketers as possible.
THE EVOLUTION OF THE DIGITAL MARKETING FUNNEL
The marketing funnel is so mysterious that there’s not one model universally accepted by all business professionals. The most basic can be separated into three stages:
You’ll hear marketers talk a lot about “TOFU” (top of funnel), “MOFU” (middle of funnel) “BOFU” (bottom of funnel) metrics and processes. This is the model they’re referring to when they do.
In this three-stage model, the “interest” and “desire” stages from AIDA have been lumped together to form the “consideration stage.” The “awareness” stage remains the same (as it does in most models), and the “action” stage is identical to the “decision” stage in all ways except the name.
But if you examine the customer journey a little more closely, you’ll see the funnel is made up of more components than Elias St. Elmo Lewis initially proposed:
In this one from Aweber , you’ll notice the added “loyalty” and “advocacy” stages. Why? Because today’s businesses have finally realized the importance of customer lifetime value . Research shows that even a 5% increase in customer retention can boost a company’s profits by 95%.
A positive customer experience beyond the “action” (or “conversion”) stage results in not only repeat purchases, but glowing testimonials. And considering that almost 93% of consumers are more likely to purchase after reading trusted reviews , those two added stages are crucial to widening the top of that funnel to attract more potential customers.
That’s why more and more businesses are connecting an inverse funnel to the bottom of the traditional one. The folks at TrackMaven call it “ the customer experience funnel The result of combining the traditional funnel with this upside-down “customer experience” one is what Duct Tape Marketing’s John Jantsch calls “ the hourglass However, there’s something crucial to a business’s growth that this model doesn’t take into account.
Source: journeys.autopilotapp.com
DECONSTRUCTING THE MARKETING FUNNEL
Like an orchestra counts on each individual musician to play their part correctly, the marketing funnel’s success depends on each stage to contribute to the next. When it doesn’t, the end goal of turning prospects to customers to advocates becomes unattainable. Here’s what you need to know to guide your customer through each stage:
MARKETING FUNNEL STAGES AND CONVERSIONS
I’ll take you through the funnel stage by stage so you have a full understanding of how it works.
Awareness: Awareness is the uppermost stage of the marketing funnel. Potential customers are drawn into this stage through marketing campaigns and consumer research and discovery. Trust and thought leadership is established with events, advertising, trade shows, content (blog posts, infographics, etc.), webinars, direct mail, viral campaigns, social media, search, media mentions, and more. Here, lead generation takes place, as information is collected and leads are pulled into a lead management system for nurturing further down the funnel.
Interest: Once leads are generated, they move on to the interest stage, where they learn more about the company, its products, and any helpful information and research it provides. Here is an opportunity for brands to develop a relationship with the people in its lead database and introduce its positioning. Marketers can nurture leads through emails, content that is more targeted around industries and brands, classes, newsletters, and more.
Consideration: In the consideration stage, leads have been changed into marketing qualified leads and are seen as prospective customers. Marketers can send prospects more information about products and offers through automated email campaigns, while continuing to nurture them with targeted content, case studies, free trials, and more.
Intent: To get to the intent stage, prospects must demonstrate that they are interested in buying a brand’s product. This can happen in a survey, after a product demo, or when a product is placed in the shopping cart on an ecommerce website. This is an opportunity for marketers to make a strong case for why their product is the best choice for a buyer.
Evaluation: In the evaluation stage, buyers are making a final decision about whether or not to buy a brand’s product or services. Typically, marketing and sales work together closely to nurture the decision-making process and convince the buyer that their brand’s product is the best choice.
Purchase: You’re here! This is the last stage in the marketing funnel, where a prospect has made the decision to buy and turns into a customer. This is where sales takes care of the purchase transaction. A positive experience on the part of the buyer can lead to referrals that fuel the top of the marketing funnel, and the process begins again.
WHAT CAN YOU USE A MARKETING FUNNEL FOR?
You aren’t limited to using a marketing funnel strictly for signing up and/or purchasing. You can put funnels all over your website to see how visitors move through a specific website flow.
You may want to track newsletter signup (Viewing newsletter signup form > Submitting form > Confirming email) or a simple page conversion (Viewing a signup page > Submitting signup).
Figure out what your goals are and what you want visitors to do on your site, and you can create a funnel for it.
Once you have the data, you’ll be able to see where roadblocks are and optimize your funnel. Let’s dig a little deeper into that.
Source: neilpatel.com
WHY ARE MARKETING FUNNELS ARE BENEFICIAL?
Marketing funnels provide access to data, called a marketing funnel report, which lets you can see where you are losing customers. This is sometimes called a “leaky” funnel because it allows customers you want to keep to escape the funnel.
Let’s take your average SaaS business as an example. Here’s how a funnel may look for them:
Visited site
Signed up for a trial
Used product
Upgraded to paying
Do people have to use the product before paying? They don’t, but it’s a good idea to track it so you can see if it’s a roadblock.
For example, if you are losing a lot of conversions after the trial stage, you might need to update your onboarding process so people understand how to use the tool or even adjust the top of your funnel so you aren’t attracting people outside of your target audience.
THE IMPORTANCE OF A MARKETING FUNNEL
The way in which consumer behaviors are changing in terms of their purchasing decisions makes it nearly impossible for businesses to experience growth without a marketing funnel online. Business leaders and consumers are on the web every day looking for solutions to their problems, and your digital funnel is the key to placing your business right in front of them.
An effective marketing funnel cultivates trust between the customer and business. It is very unlikely that a prospect will be motivated to buy from you after seeing your business for the first time. There is no trust and you haven’t given them a reason to want or feel like they need your product or service.
You have to convince customers that they are making a good investment when choosing your business.
This can ultimately be done through an inbound marketing funnel.
With that said, it is through this marketing funnel that prospects will get to know your business.
Source: bristolstrategy.com
HOW DOES A MARKETING FUNNEL CONNECT WITH A SALES FUNNEL?
Many businesses get confused about the difference between marketing and sales funnel. These two funnels are alike in a lot of ways. However, a marketing funnel increases your business’s visibility by introducing it to a diverse audience. In the end, the marketing funnel works to identify those who are interested in your product or service. Once this has been initiated, the sales funnel process can begin.
Essentially, the bottom of the marketing funnel marks the beginning of the sales funnel. Without nurturing prospects, it will be significantly difficult to convince prospects to engage with your sales team. You want to garner qualified leads because, without this, a lot of your sales time and money will be wasted.
HOW A MARKETING FUNNEL HELP BUSINESSES GROW
For one, a marketing funnel will increase sales through personalized nurturing of leads. Offering content and messaging that is tailored to your audience’s interests and actions make it easier to move them along your funnel. This personalization gives you an opportunity to learn more about your audience and ensures that your products or services are suitable for them, as well as, addressing any pain points they may have.
Another benefit of a digital marketing funnel is that businesses can gain more insights into their target audience’s behavior, making it easier to close deals. However, in order for that to happen, the company must have the right analytics and automation tools in place to gain that visibility. The more you know about your customers’ interests, where they spend their time, and what type of buyer they are, you will see an increase in how many prospects you can convert into customers.
With that said, marketing funnels don’t just work to nurture people through the sales process but it also brings awareness to your brand, which is extremely important to develop and maintain a competitive advantage. The internet is home to so many businesses trying to connect with customers. For this reason, businesses need to focus on increasing their visibility and cultivating trust among their audience. This helps create brand value that not only leads to a sustainable business but much higher business growth.
HOW GOOGLE ANALYTICS MARKETING FUNNELS WORK
Google Analytics offers funnels, and I’ve written extensively about it in the past . This is an incredibly simple way to track the path prospects take before they convert. Sign in, then head to Admin > Goals > +New Goal > Choose a Goal to create a Google Analytics goal.
Here are a couple of things you’ll need to know when creating funnels in Google Analytics:
It’s a pretty basic funnel: If you don’t want to dive deep into the data and optimize, you can go with this.
You cannot go back and retroactively view data: Once you create your funnel, you’ll only be able to the funnel going forward as the data comes in.
Overall, if you are just getting started with marketing funnels, Google Analytics is a solid place to start.
Learn how to set up a conversion funnel in Google Analytics.
What is a marketing funnel?
A marketing funnel is a visual representation of the steps a visitor takes from first finding out about your brand until they convert.
What are the different types of marketing funnels?
Sales funnels
Webinar funnels
Email funnels
Video marketing funnels
Lead magnet funnels
Home page funnels
Why do marketing funnels matter?
Marketing funnels provide access to data, called a marketing funnel report, which lets you can see where you are losing customers.
What is an example of a marketing funnel?
Visited site > Signed up for a trial > Used product > Upgraded to paying customers How to use Google Analytics to create a funnel Sign in, then head to Admin > Goals > +New Goal > Choose a Goal to create a Google Analytics goal.
Source: neilpatel.com
CONCLUSION
The way in which consumer behaviors are changing in terms of their purchasing decisions makes it nearly impossible for businesses to experience growth without a marketing funnel online. Business leaders and consumers are on the web every day looking for solutions to their problems, and your digital funnel is the key to placing your business right in front of them.
An effective marketing funnel cultivates trust between the customer and business. It is very unlikely that a prospect will be motivated to buy from you after seeing your business for the first time. There is no trust and you haven’t given them a reason to want or feel like they need your product or service.
You have to convince customers that they are making a good investment when choosing your business.
This can ultimately be done through an inbound marketing funnel.
With that said, it is through this marketing funnel that prospects will get to know your business.
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