A marketing funnel is a strategic visualisation of the customer’s journey from being a lead to becoming a committed buyer. It shows the various steps that a prospective customer should take to move from one stage of the buying process to the next.

From the company’s point of view, the marketing funnel is a valuable tool for the marketing team to design strategies to attract, engage and convert potential customers through relevant marketing material. It is valuable because it is a measurable activity and can also 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

Basis of a marketing funnel

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

However, customers today have become increasingly digital and consume content, shop and watch movies on a digital device. Therefore, it has become mandatory for most companies to have an online presence and market their products or services to customers digitally.

The AIDA process still works for the digital age customer journey. The only difference is that this journey is now carried online. Companies use a slightly modified marketing funnel and various digital marketing and online content generating tools to move consumers from one stage of the journey to the next. 

This revised structure can be represented visually as under:

However, it is important to note that regardless of how the specific stages of the marketing funnel are identified or labelled, the funnel’s function remains the same: to attract, engage and convert all possible leads to become customers!

Marketing Funnel Stages Explained

Let us delve deeper into each stage of the digital marketing funnel to understand how the customer journey progresses from lead to conversion. We will also examine the various tools or content strategies used at each stage to improve the conversion rate.

Stage 1: Awareness

This stage is aimed at a large pool of potential customers. The goal at this stage is to generate the maximum number of leads from various sources of customer traffic.

This is where a potential customer learns about the brand or the company, not always while actively searching. This usually comes about because the prospective customer is searching for a solution to a pain point that they are experiencing. So, at this stage, the company or brand needs to target the right customers.

The company must know its customers – it cannot have an “everyone is a customer” approach. Customer personas (or profiles) are extremely important at this stage to ensure that the company is engaging the right customer at the right time with the right message through the right channel.

It is better to use inbound marketing tools at this stage to pull customers towards the company/product/ brand. Some of the tools that can be used in this process include:

1. SEO (Search Engine Optimization) to optimise content for higher and better visibility on search engines.
2. Blog posts to educate potential customers on insights or information relevant to the industry or business in which the company is operating. Blog posts also boost the company’s credibility by showcasing its expertise or knowledge of the specific industry.
3. Infographics to present dense statistical or numerical information in a visually appealing and easy to understand manner.
4. Social media to create word-of-mouth visibility and build or engage a community with similar interests or desires.
5. Online banners can also help develop visibility and draw people’s attention to your company website or online promotion.

Stage 2: Consideration

The goal at this stage is to engage the customer deeply enough to capture their interest. The potential customer is still not completely sold on the product or brand and requires more information to decide. Therefore, relevant information and a way of using that information are important at this stage to strengthen the initial engagement that has happened.

At this stage of the funnel, the company must focus its efforts on educating customers on why it is the best solution to their problem. A company can use several tools to achieve its goal at this stage:

1. Case studies that offer real world examples of how the company’s product responded to a customer’s needs. Case studies confirm or validate the effectiveness of the product being considered and reinforce the customer’s interest.
2. Retargeting to engage leads who visited the company’s website. This is an effective way to remind the visitors of the company’s products and follow up with them to push them further on the marketing funnel.
3. Email marketing that uses marketing automation to engage potential customers on a direct, one-to-one basis with relevant and useful information. Email marketing can also provide valuable reports on the performance of the email campaign.

Stage 3: Conversion

This is where the customer actually buys the product. The goal at this stage is to pull the maximum number of people from the first two stages to this point. Remember, the customer will always have an option, so the focus at this stage is to convince the customer that the particular product is the best solution or response to their requirement.

The conversion can be best achieved by:

1. Reducing friction at the purchase point to ensure higher conversion and less “shopping cart drops”.
2. Offering an incentive to the customer to make the purchase decision.
3. Avoiding asking for excessive information, which could be a point of dissonance and drive the customer away.

Stage 4: Loyalty

A properly designed marketing funnel will always ensure that a customer becomes a repeat customer, i.e., it will ensure customer retention. 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. Loyal customers know what to expect from their company or brand and do not need to go through the earlier stages of the funnel.

Customer loyalty can be built and maintained by using the following tools:

1. Newsletters that are delivered regularly to customers and carry useful information plus incentives to drive more purchases.
2. Loyalty programs to reward customers for purchasing repeatedly. Loyalty programs keep customers locked into the product/brand and discourage searches for alternatives.
3. Email marketing to keep existing customers updated with information on the product or brand. Emails also help engage customers with useful incentives such as purchase discounts.

Stage 5: Advocacy

This stage can work only when the company’s customers are engaged and convinced enough of its reliability and purpose and are willing to “promote” it to others in their social circle. The effort at this stage is to encourage existing customers to recommend the particular product or brand to others and create new customers.

Recommendations by existing customers help companies get new customers directly to the consideration stage, leading to faster conversions. A company can drive advocacy from its existing customers through a variety of methods:

1. Referral programs that reward customers for bringing in or recommending new customers.
2. Surveys to find out what the customers think of the product and to use the feedback received to make improvements in the products. This makes the customers feel part of a select group and that their opinions are important to the company.
3. Process improvements that use feedback from surveys to smoothen or simplify the customer journey and reduce areas of friction that could turn away customers or lead to a negative experience. This makes the customers happy and confident in recommending the product or company to their friends and acquaintances.

Conclusion

Remember that a marketing funnel is not always a linear channel. Customers may go directly to the purchase stage upon becoming aware of the product or company, or they may spend more time at the consideration stage to evaluate several options before making a decision.

Every company today needs to place the customer at the center of its business operations. The trend towards online purchases requires all companies to go beyond the traditional AIDA model of customer acquisition and include the “post-purchase” stage of the customer journey as well. This covers loyalty and advocacy to ensure that the company can retain existing customers and acquire new customers at a lower cost. It also helps prevent post-purchase dissonance, which is possible since there is little or no direct or personal engagement with the brand or a company representative.

The marketing funnel is not the same as the customer journey process. The marketing funnel should ideally be derived from the customer journey to understand and simplify the customer buying process, eliminate the maximum friction points and boost the ROI or effectiveness of marketing campaigns.

A marketing funnel is a valuable source of customer data, and every company needs to ensure that it has developed the correct metrics to judge and evaluate the effectiveness of every stage of the marketing funnel.