what the f*ck is the marketing funnel?
Welcome to the first topic in a series of content designed to help new marketers learn the foundations of marketing with straight-to-the-point and easy-to-digest content. Today, we’ll start with one of the most fundamental topics of marketing – the 3 stage funnel.
*While some funnels have 4 stages, this model is meant to help new marketers really grasp the fundamentals and the general journey a consumer will take before conversion
Why is it called the marketing funnel?
The marketing funnel received its symbolic name due to how leads or potential customers move from the first stage of the funnel (awareness) to the final stage (conversion). Just like a real funnel takes a large amount of liquid/ material at the top and guides it down to the bottom in a smaller stream, the marketing funnel starts with a large amount of leads or potential buyers, and ends in a small stream at the bottom.
Let’s dive into the stages of the marketing funnel from both the perspective of the marketer and the consumer so you can understand why that is.
Stage 1: Awareness
Overview
The awareness stage is the top part of the marketing funnel when your potential customers become aware of a problem or a need they have.
From the consumer perspective:
This is where your potential customer identifies a problem or need that they require a solution for. They typically move through this stage by conducting research on solutions via reading blogs on their problem, identifying companies and brands that can provide the solution, and doing a bit of comparison between solutions that might work for them.
From the marketer’s perspective:
Marketers know that this stage consists largely of problem/solution research and comparison. So, in this stage, marketers employ tactics to get in front of their potential customers to make them aware of both the problem the customer is experiencing and how their product or service can solve that problem for them.
Common marketing strategies at this stage:
- SEO: Optimizing your blog and content to be easily found in search so that if/when the prospect identifies the problem you solve, they can land on your website and be introduced to your brand.
- Social Media/ Youtube Marketing: Social/ Youtube ads are great for getting in front of your potential customers if you know who they are. By targeting users based on interests, age, geolocation, and more, marketers can show their ads to people who may be unaware of the problem they need solved.
- Influencer Marketing: Influencers that are related to a brand’s service or product offer marketers access to a large pool of qualified potential customers. Simply posting a product or service can get a brand name in front of this pool of people for low costs or an exchange of goods.
Ultimately, the name of the game for awareness is exactly that, building awareness of your brand so that potential customers can be introduced to your product or service and move into the next stage of the funnel.
Stage 2: Consideration
The awareness stage is the middle part of the marketing funnel when potential customers are already aware and interested in a brand. These prospects are in the process of evaluating whether or not a brand is a good fit for them. In this stage, it is critical to gain trust, set the product/ brand apart from competitors, and push the customer in the direction of taking action and converting.
From the consumer perspective:
Consideration phase customers are looking to identify the best fit for the solution they are seeking. In this stage, common actions the consumer might take are checking the reviews for your product/brand/ service – for example – are there enough reviews? Are the reviews good or do they tell them to stay away?
Other actions the potential customer may take are to narrow down their choices and look for key purchase decision factors like price, value for the price, and reputation. Further along the consideration stage, the consumer may have decided on your brand, but is now considering the different products, services, etc. that are offered and now needs to decide the specific service/ product is best for them and their needs.
From the marketer’s perspective:
Marketers understand that this stage is extremely important to building trust and confidence in their product. It is no longer enough for potential customers to be aware that your service/ product provides a solution – you need to set it apart and help the customer understand why they should choose you.
Common marketing strategies at this stage:
- Utilizing Social Proof: Showcasing case studies of success stories, building up ratings and reviews, and showing the brand in major publications or news outlets.
- Focusing on USPs (Unique Selling Proposition):Now is the time to hit home on why your product/ service is different from the rest. Create and share comparison charts, show the product in use, and call attention to why this unique aspect of your brand makes other products/ services less desirable.
- Targeted Remarketing: Because potential customers in this stage have already engaged with your website, signed up to your newsletter, or interacted with your brand in some other way, you can start to show these customers ads that speak to their consideration via social media, email, SMS, and other channels.
At the end of the day, this stage is often lengthy and requires marketers to think outside of the box in order to maintain the potential customer’s attention, educate them further, and build trust to the point that they move into the final stage of the marketing funnel – conversion.
Stage 3: Conversion
The conversion phase is the final stage of the funnel and it’s where all of a marketer’s work builds up to. Potential customers at this stage have essentially identified a single brand as the one they will choose, but are on teeter-tottering at the point just before conversion.
From the consumer perspective:
This stage is typically short, but the truth is that there are many reasons why they choose your brand but have not yet converted. In this stage, they may be one click away from adding their credit card information and purchasing, one small doubt preventing them from buying, saving their money before purchase, or waiting for the right timing (like a sale).
From the marketer’s perspective:
At this point, marketers have to do everything in their power to tip the balance and bring their potential customers to convert. At this stage, marketers are optimizing their websites, remarketing strategy, and messaging, to crush any potential customer objections, and get the lead to convert.
Common marketing strategies at this stage:
- Creating seasonal or targeted sales: For the consumer saving money or looking for a bargain, sales can push customers who want a better deal over the edge. Marketers can either do this seasonally where this is expected (major holidays) or use granular remarketing strategies to only show sales to people who are just about ready to convert.
- Utilizing a payment plan or trial: Some potential customers value the results above all else. By offering a payment plan or demo that allows the consumer to get in and test the product or service, marketers can influence their leads to “convert” at a non-committal level.
- Offering unique incentives: Marketers can also offer non-monetary incentives to push people over the edge. This is common for products or services that may not be “needs” like fashion clothing or jewelry. Examples include offering a free shirt with purchase, a coupon for next time, or a related product.
- Using scarcity as influence: Marketers can also take advantage of the perception that the consumer needs to act now. Tactics include seasonal products (think McDonalds shamrock shake) or low inventory (this makes the consumer want to avoid missing out on the product).
Ultimately, this stage is where marketers identify and take action on any reasons why a potential customer may want to convert. As the last stage of the funnel, this is where most potential customers are likely to convert, so putting a large amount of effort into this stage is crucial to marketing success.
Before we conclude though, here are some FAQs about the funnel:
Why is the funnel bigger at the top?
Marketers cast a wide net in the awareness phase because they want a greater chance of reaching their ideal customer. Additionally, some people are naturally going to fall out of the funnel if they choose another brand or service, so the funnel naturally gets smaller in size. Instead of thinking of the funnel as a hard guideline, image small holes in the funnel that people can naturally flow in and out of.
Does a lead have to start in the awareness phase?
Nope! Your potential customers can enter and exit the funnel at any stage. That’s why your marketing should be optimized at every level – not as if it was a set path they have to follow.
Key Takeaway: the marketing funnel is a guide, not the truth.
Now, before you leave to tell your mother or roommate how much of a smart marketer you are for understanding a basic concept, it’s important to consider that while the funnel tends to look like a funnel, consumers may not stick to this journey. Every customer is different, and each customer is a human that experiences life along the way.
Consumers may do research in the awareness stage and decide they don’t need to prioritize the problem you are solving and come back a few months later when it becomes more of a priority. Consumers may also get attracted by a competitor late in the funnel and leave without you ever knowing.
The key takeaway is this. Each consumer is unique, and their experiences are unique. You can’t tailor your marketing to every single consumer, but you can build a funnel that is effective and efficient that works for consumers at any stage – whether they enter at awareness, or jump straight to conversion.
Focus your efforts on learning about each stage and making your funnel better at all levels, and you’ll see a remarkable return on investment.