CuriousOwl

What is a Marketing Funnel?

A marketing funnel is a strategic visualization of the customer journey from lead to committed buyer. It shows the various steps that a prospective customer takes to move from one stage of the buying process to the next.

Basis of a marketing funnel

A marketing funnel is typically designed based on the 4 stages of a typical buyer journey called AIDA (Attention Interest Desire Action). Visually, a traditional marketing funnel could look like this:

From the company’s point of view, the marketing funnel is a valuable tool for the marketing team to design plans to attract, engage and convert potential customers through relevant marketing material. It is valuable because it is a measurable activity and can help prevent customer leakages, i.e., customers dropping out at different stages before buying.

A marketing funnel can be of two types (as per the end customer):

1. B2B marketing funnel
2. B2C marketing funnel

The growth of digital marketing and growing consumption of content on digital devices has led to modifications in the traditional AIDA model of a marketing funnel. This is especially visible in the B2B segment, as we will see below.

Before we explore the B2B marketing funnel, let us understand the B2B marketing cycle, the factors that affect this marketing cycle, and why a B2B marketing company needs a marketing funnel.

The B2B marketing cycle

Every B2B marketing company needs to be aware of the buyer journey and the touchpoints possible at each stage of the journey. B2B marketing can be effective only when the company sets out goals for each stage of the buyer journey, designs useful and relevant content and offers, and optimizes its digital marketing activities to reach the maximum number of potential customers.

The marketing effort in a B2B segment consists of the following considerations:

1. The client is a company, not an individual.
2. The sales outcome is in large numbers (value).
3. The marketing effort tries to solve a specific problem or necessity.
4. Number of clients is smaller.
5. Purchasing volume is quite large.
6. Decision-making is complex and goes through multiple levels.
7. The purchase decision is mostly based on logic and is rarely an emotional decision.
8. The focus of B2B marketing is to achieve long term goals rather than short term outcomes.

Digitalization and marketing automation have opened a lot of new business opportunities, and smart businesses exploit these opportunities by designing and offering consistent and seamless customer experiences at every touch point. Thus, the B2B marketing funnel needs to be designed thoughtfully and should be customized to the customer’s expectations and requirements.

Challenges and opportunities for B2B digital marketing

A B2B business needs to attract leads, nurture these leads and push sales through the leads. However, a typical B2B marketing-sales cycle can be a long and slow process involving multiple touchpoints and multiple marketing channels. Thus, it is imperative for a B2B business to have a properly designed and structured digital marketing funnel.

There are two main challenges in building a modern B2B marketing funnel:

1. Massive growth in digital communication channels
2. The tendency of B2B buyers to do a large amount of independent research

These challenges can be addressed by understanding the customer’s buying behavior and purchase cycles. The following points can help to overcome possible challenges:

1. Map the buyer journey as accurately as possible so that customers can be moved seamlessly along the funnel
2. Ensuring presence on all possible digital channels that the prospect could use
3. Designing and delivering a consistent user experience across all channels
4. Design and release personalized messaging and content that matches each stage of the buyer’s journey

Key steps in B2B customer journey

The customer (buyer) journey in a B2B situation is not linear. It involves multiple stakeholders and decision-making levels. But it can be condensed to the following:

1. Identify the problem
2. Evaluate solutions
3. Define the requirements
4. Select the supplier

The factors influencing a B2B purchase decision

Let us examine the factors that influence a B2B purchase decision:

1. Internal organization factors
   1. Purchase policies
   2. Structure
   3. Purchasing system
   4. Business objectives
2. Environment or external factors
   1. Political and legal factors
   2. Technical factors
   3. Competition
   4. Economic factors
3. Personal factors (of the buyer)
   1. Seniority
   2. Age
   3. Education
   4. Ability to take risks
4. Interpersonal factors (the influence and interests of all stakeholders)
   1. Status
   2. Authority
   3. Interest

Why does a B2B company need a marketing funnel?

A B2B customer also moves through a set of defined stages as he progresses through his purchase cycle. Each stage of the B2B purchase cycle requires a different or specialized content type. What works for one stage of the cycle will not suit another stage.

Thus, it is imperative that a B2B company has a marketing funnel in place to ensure that the right message goes to the customer at the right time and at the right place.

The B2B marketing funnel

It is clear from the above points that a B2B digital marketing funnel cannot be just a simple AIDA based model. It is important to identify the main pain points of the B2B customer to develop a useful B2B marketing funnel.

The ideal B2B marketing funnel has 4 key stages, covering customer acquisition and retention. Note that the funnel for a B2B company is a hybrid marketing – sales funnel, as both teams need to work in tandem along the customer acquisition and fulfillment journey.

The four stages are:

1. Lead prospection (Top Of The Funnel)
2. Lead generation (Middle Of The Funnel)
3. Lead conversion or deal closure (Bottom Of The Funnel)
4. Repeat business and referrals (Customer retention)

 A B2B marketing funnel can be represented visually as under:

This funnel structure helps the company to map the business buyer journey accurately and design a marketing approach that combines digital channels, messaging, content and offers in a way that helps the buyer make a purchase decision easily.

How to build a useful B2B marketing funnel

We will examine here what is the customer mindset at each stage of the marketing funnel, what the company objectives should be and the tools that can be used.

1. Top Of The Funnel (TOFU)
   1. Stage where potential customers are searching for solutions to their problems
   2. Increase brand awareness
   3. Attract new potential customers
   4. Build awareness of the company or product
   5. Educate prospect customers on how the product can solve the specific pain point
   6. Tools: YouTube videos, blog posts, e-books and other free content
   7. These will help the company identify and bring in genuine leads who have agreed to be contacted and are willing to engage with the company
   8. This could give a higher ROI without wasting money and effort
2. Middle Of The Funnel (MOFU)
   1. Stage at which the product or service should be introduced to the prospective customer
   2. Build relationships with prospects
   3. Show how the product or service can solve the problem for the customer
   4. Highlight the key proposition that differentiates the product offered from others
   5. Tools: Product videos, case studies, white papers, webinars, email marketing
   6. This will help “warm up” the lead and get him closer to a decision
3. Bottom Of The Funnel (BOFU)
   1. Stage where the prospect has shortlisted a few options and is about to make a final purchase decision
   2. Help the potential customer take a decision by removing obstacles, responding to objections and push to take action
   3. The marketing and sales teams need to work together at this stage
   4. Tools: Consultations, free product or service trials, testimonials from other customers, quotations, training and tutorials
   5. These will help the buyers justify their decision, and will also address any objections that the final buyer may have before taking a decision
4. Customer retention
   1. Stage at which existing customers are encouraged to repeat their business or provide referrals to new customers
   2. Remember, retention is extremely important for B2B businesses because of the high acquisition cost and long sales / purchase cycle
   3. It is cheaper to retain an existing customer than to get a new customer, and the company’s marketing and content should pull the customer to visit the website or engage with the company again and again
   4. Loyal customers know what to expect from their company or brand and do not need to go through the earlier stages of the funnel.
   5. Tools: A robust CRM process, outbound digital marketing, loyalty programs, newsletters, email marketing
   6. These will motivate customers to provide referrals, advocate the product or company and give out positive word-of-mouth feedback to other potential customers.

Conclusion

B2B marketing is all about value selling over the long term. B2B buyers make a purchase decision to improve their business or gain a competitive edge in the marketplace. They have access to a lot more information and can control the final purchase decision in a much better way.

The investments of a B2B customer are considerably larger and more complex than that of a B2C customer, and the marketing funnel must be designed keeping these considerations in mind.

The digital marketing tools and content for each stage of the B2B marketing funnel need to be customized to the logical requirements of the customer. B2B marketing cannot use a “same size fits all” approach and use the same marketing funnel for all customer types.

Buyer behavior and funnel stages can change in B2B marketing, but the essential parts of a B2B marketing strategy do not change: identify the customer’s problem, map his journey to arrive at a solution and offer a solution that works.