Today’s marketing funnel is dominated by digital interactions, fewer personal experiences, and a reduced presence of in-store assistants. But while these touchpoints have changed, the fundamental path to purchase has not.
What is a marketing funnel?
The marketing funnel is a series of stages that guide prospects through the customer journey. It begins with recognizing a need or a problem. This leads to evaluating options and deciding which ones to consider. The journey then moves to the decision or conversion phase, followed by post-purchase stages of loyalty, retention, and advocacy through word of mouth.
Stages of the marketing funnel
The awareness stage, the initial step in the buyer’s journey, aims to educate potential customers about a brand and its products. At this point in the funnel, a customer has recognized that they have a need and are looking for a way to resolve it. They are starting to research solutions to better understand their options. The awareness stage captures the widest audience, but they are least likely to convert at this stage. Capturing their attention through relevant content can help move them to the next stage of the funnel.
The consideration stage is the point in the customer journey when people are conducting more research to determine whether a product or service will fit their needs. Marketers must find ways to maintain this engagement by nurturing leads and establishing trust between the prospect and their brand.
As prospects near the end of the buyer’s journey, the conversion, they may start comparing products across competitors. Here, a seamless customer experience can give brands an edge, but brands should be prepared to counter potential objections and position their brand ahead of similar companies.
During the loyalty phase, customers develop affinities for a brand. In order to foster loyalty, it’s important to move the relationship beyond being transactional. Brands can do this by sharing company values, reinforcing their brand identity, and offering loyalty programs.
50% of US consumers agree that loyalty programs are now more important than ever, per LendingTree’s June 2022 survey. And 20% of grocery buyers had signed up for free loyalty programs in the previous two months to save money, according to our September 2022 Bizrate Insights survey.
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Benefits of a marketing funnel
Identify problems earlier to increase retention and avoid churn
By tracking customers through each stage of the customer journey, you can determine where in the process they might be losing interest. This can help marketers understand how to better engage customers at each step in the process to avoid losing potential customers.
Build customer trust through relevant marketing content
By adapting marketing outreach to where a customer is in their purchasing journey, a customer is more likely to have trust that a brand understands their paint points and has the tools to help them resolve these challenges.
Get meaningful takeaways to optimize future campaigns
By looking at KPIs across various channels and stages, marketers can better understand when to integrate different types of messaging throughout the buyer’s journey to elicit the highest conversion rates.
Types of funnel-based marketing
Top of funnel
Top-of-funnel (TOFU) marketing targets potential buyers unfamiliar with your brand by appealing to a broad audience, providing solutions, and positioning your business as an industry expert to generate leads.
When you want to provide potential customers with information at the beginning of their search journey, there are few straightforward ways to deliver this content. Some examples include blog posts, search engine optimization (SEO), social media marketing.
50% of US B2B marketers believe that social media has contributed most to achieving top-of-funnel goals, followed by Email (43%) and in-person/live events (34%), per Ascend2.
Middle of funnel
Middle-of-funnel (MOF) is the stage between TOFU and Bottom-of-funnel (BOFU) where potential customers are already aware of and interested in your brand, but are not yet ready to buy.
Examples of mid-funnel marketing solutions include positive customer reviews, email nurture campaigns, video tutorials, white papers, ebooks, and webinars.
Bottom of funnel
Bottom-of-funnel (BOF) marketing solutions help demonstrate the value of a product or service and encourage prospects to make a purchase. Marketers must differentiate themselves from competitors by providing specific attributes that make their product or service unique. They should use a strong call to action, as these individuals have already conducted a good amount of research and should be motivated to make a choice.
BOF content may include product demos, case studies, testimonials, and personalized email campaigns.
A full-funnel marketing strategy simultaneously builds awareness, consideration, and conversion. This 360-degree approach guides customers through each phase of the buying process, honing the message for the target audiences as they approach the point of purchasing.
Consider the full-funnel relationship between an ad and a landing page. When an ad piques consumers’ interest in a product, they are likely to click through. However, if the landing page doesn’t align with or fulfill the expectations created by the ad, it’s probable that the consumer will disengage.
What’s the difference between a sales funnel and a marketing funnel?
The difference between the sales funnel and marketing funnel usually pertains to the use case. Marketing is focused around building interest and driving customers down the funnel towards conversion. While this can sometimes entail a paid transaction through a website, in other cases, a customer takes an action such as filling out a form, which notifies a sales representative to reach out to a client. Therefore, the end of the marketing funnel can jumpstart the beginning of the sales funnel.
However, it’s important to note that there is some overlap between a sales funnel and marketing funnel. Some companies have merged their sales and marketing strategies, making it challenging to distinguish between the two. Also, some companies are customizing the stages of their funnels for operational efficiency, which can further blur these lines.
- A full-funnel marketing strategy aligns your marketing so you can develop a better understanding of leads and potential customers at all stages, and it also opens up cross-functional learning opportunities between sales and marketing. For example, sales can share new pain points identified during a pitch so marketers can tailor language to their needs, while marketing teams can share email engagement data to keep sales aware of what is resonating with audiences.
What do you measure in a marketing funnel?
Cost per acquisition (CPA)
CPA is how much money you invest to acquire new customers through a channel.
Customer lifetime value (LTV)
LTV is the continuous value a customer offers a company. This metric has to do with predicting the likelihood that a customer will make another purchase.
- Top of funnel: how many visitors become marketing qualified leads (MQLs)
- Middle of funnel: how many MQLs become more deeply engaged in middle of funnel content
- Bottom of funnel: how many potential customers become paying customers (and potentially brand advocates)
Conversion rate per channel
You can analyze the success of each channel to determine whether you’ve met more specific goals. For example, you can measure organic search, paid ads, referrals by influencers, and more.