A marketing funnel is a framework that shows a customer’s journey from being a potential customer, being aware of the brand, to finally purchasing your product or service. This involves various stages of customer engagement with a brand.
In marketing, a funnel is the sequence of stages that a customer goes through before they make a purchase. The steps, in order, are awareness, interest, consideration, intent, evaluation, and purchase. Marketers are responsible for managing the steps of teh tunnel to ease movement through them.
The concept is like the funnel where marketers cast their nets to capture as many people as possible and slowly integrate and nurture them to become regular customers. Companies utilize marketing funnels to understand customers’ needs in each stage and craft excellent marketing strategies that lead to more revenue.
What is an example of a Marketing Funnel?
Imagine you own an e-commerce store that sells organic spices, and you know that your target market is individuals between 30 years and above. You then run ads on YouTube and Facebook that drive traffic to your landing page. Once on the landing page, you request the visitors to sign up for your email list.
Once they fill in your form, they change from prospects to leads and move slowly down the funnel. Over the next few days and weeks, you send content that educates your subscribers on the nutritional benefits of organic spices. At the end of this, you decide to offer a 20% discount on the customer’s first order.
This attracts many people to make purchases, as everyone is interested in what you are selling. You then move the same customers to a new email list and repeat the process with a different product.
How Does a Funnel Work?
There are a lot of words that are used to describe the various marketing funnel stages. The process is sequential in which each stage has different operations. When an individual gets to know about your brand through a marketing campaign or visits your website by clicking an ad or after a Google search, at this point, they become a prospect.
The visitor might research your brand by reading blog posts or checking product listings. After some interaction, you offer them a chance to sign up for an email list. If they sign up for your email list, they become a lead. This gives you the opportunity to market to the customer outside your website through email, text message or phone call.
Leads tend to come back to your website when you give them details on special offers or other intriguing messages. The funnel narrows as prospects move through it. This is because there are more prospects at the top of the funnel than there are buyers at the bottom.
Stages of the Marketing Funnel
At the end of the 20th century Elias St. Elmo Lewis, an advertising pioneer, created the AIDA model. This model describes the stages of a customer’s relationship with a business. The acronym stands for awareness, interest, desire and action. However, the model has evolved over the years and the most relevant model in today’s world marketing includes the following stages.
1. Awareness
This is the topmost stage of the marketing funnel. This stage is where people get to know about your product or service. Potential customers are captured into this stage through marketing strategies such as advertising, social media or referral. This is known as casting the net.
Whether these people will move down the funnel ultimately depends on the sales and marketing teams’ ability. They move into the middle and lower part of the marketing funnel. An example of how one may get to be aware of the brand is by clicking an ad, watching an advert on television or hearing a friend talking about your brand. This, in turn, creates interest, which is the second stage.
2. Interest
Once the potential customers have information about your brand, they learn more about the company, its products and any relevant information pertaining to it. At this stage is where a company can build with potential customers. This can be through sending emails and newsletters to people in its database.
3. Consideration
In this stage, potential leads have been converted to qualified marketing leads and are seen as prospective customers. Therefore, marketers can send more information about their product base through targeted email campaigns, text messages, phone calls, free trials, and many more.
4. Intent
This is the fourth stage of the marketing funnel, where the prospective customers have shown interest in purchasing a company’s product. This can be demonstrated through a product being placed on the shopping cart in the case of an e-commerce website, or after trying out a free trial or through a survey. This provides an opportunity for the marketing team to demonstrate why their product is the best choice for the prospective buyer.
5. Evaluation
In the evaluation stage, the prospective buyer decides whether to buy the brand’s product or services. The marketing team should build a good case about the product to influence the buyer’s decision.
6. Purchase
This is the last stage of the marketing funnel, where the prospective customer makes the final decision to purchase the product. This turns the prospective buyer into a real customer, and the sales team takes care of the purchase transaction. At this stage, the customer should be handled well because a great experience by the customer will lead to referrals that initiate the process again.
Importance of Marketing Funnels
Marketing funnels have immense benefits to businesses. It can be a game-changer to your business. The following are ways the marketing funnel can influence a business.
Assist in Deciding on a Marketing Strategy
The purpose of a marketing funnel is to understand customer needs at every stage of the customer’s journey. Understanding their needs enables you to know why prospective customers do not translate to being buyers. This will help in finding the best marketing strategy that will increase their engagement with your brand.
Consistent Promotion
A marketing funnel ensures the marketing team is consistent with its promotional strategies. This is because they are aware of what to do, as there is a well-laid marketing plan for each stage of the funnel. This helps in ensuring they drive prospects to become customers of your brand.
Increase in Sales
Having a marketing funnel leads to an increase in sales for your company. This is because by handling customers’ needs at each stage, they ultimately purchase your products or services. Failure to have a marketing funnel leads to the loss of potential customers as they drop off before making any purchase. This, in turn, leads to a loss in revenues.
Efficiency in Marketing
Understanding your customer’s needs at the various funnel stages enables creating a strategy for the sales and marketing teams. This funnel enables them to be consistent and well prepared to convert the leads into customers. This is because they are prepared on the best way to close a deal.
Marketing is more like a game, and the well prepared you are, the better your chances of getting great results. Also by understanding your customer’s journey and having plans for each stage allows you to automate marketing activities.
Predicting Future Sales
Having a marketing funnel enables you to understand better the results of your marketing activities. One can use the results of previous marketing activities, which will enable you when you initiate another marketing campaign. This enables you to know the lead conversion rate for every stage.
Retaining Customers
A marketing funnel enables a brand to have a post-purchase marketing strategy that keeps customers engaged and makes them remain loyal to the brand. This ensures business continuity and leads to decreased costs as retaining customers is much cheaper than acquiring new ones.
What Does Funnel Mean in Business?
The steps towards converting a customer are referred to as funnel this is because, at the initial stage, there are a lot of people that take the step. As the prospects take the next steps, some of them drop out along the way, and the size of the crowd narrows.
To businesses, losing customers is always seen as bad and viewed as a loss. However, by understanding the funnel, an entrepreneur will know that not everyone in the funnel will translate to being a customer. The top of the funnel is where everyone captured either through a marketing campaign or through visiting your website. This means a lot to businesses, as they understand the importance of widening the funnel to capture more people.
Conclusion
A marketing funnel has numerous benefits to businesses and brands. However, creating and optimizing the funnel requires an investment of both time and effort. It is a challenging task to build a marketing funnel for a business, but it is the only way to remain competitive in the marketplace. Businesses should take time to make a market funnel that takes into consideration the needs of customers at each stage.
Devote time and effort to fine-tune it to ensure that it works for your business to reap the benefits associated with it. In addition, marketers should focus their efforts beyond a customer making a purchase, as they should have a retention strategy to ensure the hard-earned customers stick with the brand for a long time. This will ensure the business remains profitable for a long time.