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What is the marketing funnel and how does it work?

Updated: Apr 21



The phrase "The customer is always right" may have started simply as a department store slogan in the early 20th century, but it has evolved into the core motto of the society we live in. You may have put your heart and soul into starting a business and create a website to offer your services or products, but if the results are not as expected, it is you, not your customers, who need to change.


This means that you must be able to identify all the pain points on the customer journey to find out where people lose interest in your offer. Then you will want to customize your product based on their feedback and assess whether the issue is resolved. The marketing funnel will give you all the tools and data you need to do that. Read on to learn all about this powerful process and why you should implement it right away.


What is the marketing funnel?


The marketing funnel, also known as the buying funnel, is a visual representation of all the steps a visitor must go through before purchasing a product or service. Its origins go back to 1910, when the American philosopher John Dewey introduced the five stages consumers go through before, during and after the purchase of a good or service.


This buyer decision process included the following stages: Problem / needs recognition, information search, evaluation of alternatives, purchase decision and behavior after purchase. Over time, this idea evolved into the modern marketing funnel, which focuses on the different stages from the moment people first hear about a business to the moment they make a transaction.


But why is it referred to as a funnel? Marketing measures do not involve getting people to buy right away. Instead, they start by capturing leads - potential customers who show interest in the brand. When companies turn anonymous strangers into potential customers, they pull them into the mouth of the funnel. Then they continue to market to these potential customers with the goal of getting some of them to buy.


Of course, only a fraction of potential customers will actually buy the product. As they go through the various stages of the buyer decision process, some of them will leave the effort without getting to the purchase stage. Thus, the amount is diluted, and the resulting visual representation of this process forms the shape of a funnel.


Benefits of the marketing funnel


Now that you know what the marketing funnel is, you are probably wondering if you should start using it as part of your small business marketing strategy. Ask yourself the following questions: Do I have a service or product I intend for customers to buy? If the answer is yes, you should definitely do it.


As a company, your success depends not only on the quality of your offer, but also on the way it is presented and marketed to consumers. Everything from the website's layout and color scheme to the packaging of your products also plays a big role in the customer's journey through the marketing funnel.


Having a clear overview of a customer's journey will allow you to identify any roadblocks that hinder their progress through the funnel. Based on this data, you can make changes to eliminate these barriers and improve your conversion rate - whether it's by making your site more user-friendly, creating a social media campaign, or promoting on various channels. This is why funnel marketing is so effective.


Stages of the marketing funnel

While the overall framework for the marketing funnel has largely remained unchanged for more than a century, there is no global consensus at the various stages. Here we will discuss the different stages that are represented in the template for the marketing funnel above. These stages include:


  1. Awareness

  2. Interest

  3. Consideration

  4. Intent

  5. Evaluation

  6. Purchase


01. Awareness


Awareness - located at the top of the marketing funnel - is the first step. This is where customers first learn about your brand, and this is where potential sales take place.


To build awareness, develop targeted marketing campaigns that target people who may need your product. Be sure to use market segmentation to create tailor-made campaigns for each customer type.


Then use leads registration forms to get their contact information (usually their email address) so you can continue marketing to them. This is one of the most important strategies for generating potential sales, as you will use their contact information to reach out to them and guide them through the rest of the marketing funnel.


02. Interest


Leads that show interest in your business move on to the next step in the marketing funnel, aptly known as interest. At this point, lead generation becomes lead care as brands begin to establish a connection with all the contacts gathered in the previous phase.


One of the most effective ways to build interest is through email marketing. This allows you to start building relationships with potential customers by reaching out to them directly with relevant brand content.


03. Considerations


In the assessment stage of the marketing funnel, the consumer considers the various methods available to them to meet their needs. At this point, they already know about your offer and are familiar with your brand. Now it's your job to convince them that a product like yours provides the best solution to their problems.


To do this, try using marketing automation to send targeted email campaigns with actionable intentions, such as free trials and sales announcements. Another popular funnel marketing technique is to provide them with informative content, such as blog posts and webinars, that cover their needs while carefully guiding them towards your product.


04. Intent


Have you ever left something in your online shopping cart and received an email about it a day or two later? This is how it feels to enter the stage of intention.


Potential customers (known as prospects) move to the intent stage when they show a clear intention to buy a product, for example by contacting a customer service representative, trying out a product demo or adding an item to the shopping cart. This does not mean that they will buy right away, but it does indicate that they are ready for purchase.


With that in mind, the intention stage is the time to prove why your offer is the first option for the potential customer. You need to target them with marketing materials that provide a strong argument for why your product is better than the competition.


05. Evaluation


The evaluation stage in the marketing funnel is where lead nurture meets sales. Here the potential customer makes the final decision whether to buy your product or not.


At this stage, marketing and sales teams must work together to convince potential buyers to take the leap and make a purchase. In the same way as in the previous phase, the focus is on positioning the company's offer as the ideal choice.


06. Purchase


The pot of gold at the end of the rainbow of the marketing funnel is known as the buying stage. This is where prospects finally decide to buy the service or product. At this point, sales teams take over to manage transactions. Be sure to use various sales psychological techniques to get into the customer's head and end the deal.


Additional representations of the marketing funnel


As we have discussed, the six stages above represent one of the most popular ways to divide your marketing funnel. Still, it is not the only version. Other common variations of the marketing funnel include:


  • AIDA: Awareness, interest, desire, action

  • TOFU-MOFU-BOFU: Top of the funnel (generates leads), Middle of the funnel (generates potential customers), Bottom of the funnel (generates sales)


Below we will also talk about how the marketing funnel differs slightly between B2B and B2C companies, as well as a variant known as the non-linear marketing funnel.


B2B vs. B2C marketing funnel


The main difference between the B2B and B2C marketing funnel is the amount of people involved in the process and the level of interaction between businesses and consumers.


In most cases, B2C consumers navigate through the funnel alone with little or no direct interaction with the business. Customer outreach efforts are carried out by targeting large purchasing groups or by using tools for automation of marketing, and very few customers actually interact with a representative.


On the other hand, B2B consumers typically include more than five people from different departments. While the upper stages of the marketing funnel follow the same pattern as B2C consumers, lower-level sales representatives establish direct communication with B2B consumers.


Non-linear marketing funnel


The marketing funnel template above represents the non-linear marketing funnel. While the cone-shaped marketing funnel has been standard for many decades, some experts claim that the market has evolved beyond linear buying processes.


As a result, many companies have begun to abandon the traditional cone in favor of one that resembles a bow or hourglass. This type of marketing funnel aims to tackle the fifth and final phase of Dewey's consumer decision-making processes: buying behavior.


The upside-down cone shape starts with the few buyers who made a purchase and traveled to the end of the traditional marketing funnel. From there, companies look at the customer journey after purchase, and take into account factors such as satisfaction, certificates and feedback.


The goal of this new funnel approach is to create strong relationships with customers, not only to ensure that they do not move to competitors' services, but also so that they become repeat buyers and loyal advocates for your brand.


Although there is no consensus on the different stages of the non-linear marketing funnel, it is still a valuable way to measure consumer behavior and optimize your marketing efforts. No matter what model of marketing funnel you use, the most important factor is that your marketing plan aligns well with each step of the buyer's journey.



Freddy Fix borrowed from Wix

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