Category: Uncategorized
by: webmanager
February 26, 2021
In 1898, E. St. Elmo Lewis, the American advertising and sales pioneer, developed a model using the latest scientific management insights. Commonly referred to as the AIDA-model, it was a theoretical map of the customer journey from the time a brand attracted consumer attention to the point of action or purchase. The AIDA acronym stands for Awareness, Interest, Desire, and Action.
We take it for granted now, but this method of defining the customer experience and segmenting sales and marketing efforts was radical for its time and is still well-known to this day. It remains the foundation of the present-day marketing funnel.
What is a marketing funnel:
A marketing funnel is a way of breaking down the customer journey from when they first learn about your business to when they’re ready to buy your product or service, and even after purchase. A marketing funnel is a tool for mapping and understanding the customer’s journey to better serve customers.
Funnels have several stages, where typically a large number of potential customers start as leads at the top of the funnel (ToFu), some drop off as they move through the middle stages, and a few become customers at the bottom of the funnel (BoFu). The core objective of marketing is to fill the funnel and move as many leads down the funnel towards a purchase. The marketing funnel is a model of a system designed to attract and convert leads to customers or clients of your business.
Are Marketing funnel and Customer Journey the same thing?
Marketing funnels and customer journeys are both important frameworks that provide actionable insight into where and how to focus your resources for the highest marketing ROI. They are similar concepts, but not interchangeable. They mean different things.
So what’s the difference?
According to Salesforce, a marketing funnel, a.k.a sales funnel, is a model of your marketing and sales process from your company’s point of view. It maps the stages of the buying process that your company leads your customers through on their way to purchase, and the touchpoints (link) you have with customers and potential customers.
A customer journey is a map of the customer’s path to purchase and it includes all the steps and interactions the potential customer has before, during, and after buying and experiencing the product or service. These interactions are called touchpoints.
What is a touchpoint? A customer touchpoint is any physical or digital interaction between your business and a customer before, during, or after purchase. These can be your brand’s ad, web page, point of sale display, an email, a call from customer service or a customer review.
Even though they aren’t the same thing, your marketing funnel and your customer journey maps should tell the same story. The marketing funnel and customer journey complement each other to provide a better and more holistic view of the customer, and they help identify, design and refine touchpoints. Now that we understand the relationship between a marketing funnel, a customer journey and touchpoints let’s understand the new marketing funnel and its stages.
Reshaping of the Marketing Funnel
The traditional funnel followed a straight line customer journey, from awareness to interest, to desire, ending with action. There was only one entrance (awareness) and one exit (conversion), and that was the end of it.
Enabled by technology, customer journeys of the post-boomer generations have become non-linear and as unique as each customer. Google looked at thousands of users’ clickstream data as part of an opt-in panel and discovered that no two customer journeys are exactly the same, even in the same category.[i] They can be meandering, longer or shorter, depending on the individual customer and the sales cycle.
Today customers may enter the funnel at any point in the buyer’s journey, tightening and expanding their consideration set in unique and unpredictable moments. They may buy from a company they were not familiar with because of positive customer feedback and reviews. Subscribe to a newsletter because of an incentive or purchase because of a new customer discount. They may travel backward, from buying to comparison or go from the online store to the physical store.
Customers turn to their mobile devices to get immediate answers, and in doing so, they are expressing intent and reshaping the traditional marketing funnel. This is especially true of the post-boomer generations starting at Gen X. and more prolific among younger Millennials (Gen Y) and Gen Z.
This has reshaped the marketing funnel adding more stages to it, including post-purchase stages, like retention, expansion and advocacy.
Understanding your marketing funnel
At any given time, a business has customers in various stages of their customer journey. Understanding the marketing funnel helps marketers categorize leads and customers based on where the customers are in their journey in relationship with your business.
Tracking the position of leads in the funnel helps marketers deploy pre-planned tactics to keep their interest, answer questions and address their concerns to push them down the funnel towards a purchase.
Irrespective of the kind of purchase or the budget, customers start at the need recognition stage, their need can range from easily solved problems to issues without clear solutions. They may enter at different stages of the funnel, even skip stages or vacillate between stages before making a purchase, but they follow a somewhat similar path.
No two funnels are alike even within the same category and B2B and B2C funnels have different stages and touchpoints. However, customers in the same stage of their journey don’t necessarily encounter the same touchpoints, which is why a marketing funnel is a generalized and simplified model out of necessity.
Here are the typical stages of a four-stage marketing funnel.
Top of the Funnel (TOFU)
Stage 1: Awareness
In the awareness stage at the top of the funnel, a buyer typically has a need or problem and is seeking a solution. At this point, their value as a lead is low, and the probability of buying is uncertain, but they are open to receiving brand messages.
The objective of this stage is to generate awareness for the brand and start collecting leads from your target segment. The content should be attention-grabbing, but informative, interesting, fun and memorable. Channels and touchpoints used at this stage create broad awareness. Here are the typical channels and touchpoints to help you build brand awareness:
Middle of the Funnel (MOFU)
Stage 2: Consideration
Once a lead has identified their need and has become aware of your brand, they enter the consideration stage to evaluate the best solution. The value of a lead in the consideration stage is higher as they are interested and actively researching and evaluating the available solutions. While they have a higher probability of making a purchase, they are not ready yet, and they may have questions or concerns.
The marketer’s objective at this stage is to build a relationship with your new lead, understand their needs and provide relevant information that enables them to determine that your product or service is the best solution to their problem.
As the leads start to become more familiar with what your offer and how you can help solve their problem, they’ll begin to develop a greater interest in certain products or services.
Here are some typical channels and touchpoints to help you build brand awareness:
Bottom of the Funnel (BOFU)
Stage 3: Action
Up until the Action stage, your leads have been moving through the funnel, taking smaller actions, like signing up for offers, newsletters or eBooks, which are referred to as micro conversions.
In the action stage, the leads are deep into their customer journey. They have shortlisted the brands they are ready to buy, but may not have made their final choice yet. At this point, they are looking for reviews, prices, warranties, offers and more information to make their final decision. They may also be ready to speak to a salesperson.
The marketer’s ultimate objective at this stage is to persuade your leads to convert and makes a purchase. To achieve this, you must build a relationship with the new lead, understand their needs and provide relevant information that enables and persuades them to conclude that your brand is the best solution to their problem. A significant churn at this stage would indicate that your lead nurturing tactics need improvement.
Here are a few kinds of content to include at the action stage of the sales funnel:
Step 4: Re-engagement
In the traditional funnel, the Action stage was the endpoint, but the cotemporary funnel continues even after purchase to build retention, expansion and advocacy. This is because acquiring a new customer can cost five times more than retaining an existing customer. A study by Bain & Company and the Harvard Business School found that a 5% increase in customer retention can increase profit by 25 to 95%. This is because the cost of acquiring a new customer can be five times more than retaining an existing customer and the probability of selling to an existing customer is higher than 60% and less than 20% for new customers. Keeping customers loyal and engaged helps re-selling, but also helps cross-selling and up-selling (expansion).
However, the benefits of re-engagement don’t end here. A happy and loyal customer is a gift that keeps on giving because not only do they buy more, but they also talk about your brand and endorse it within their circle of influence. That’s not all, it gets better, customers that are referred usually convert at a much higher rate than brand new customers.[ii]
Here are some ideas to re-engage customers:
Wrapping Up
Marketing funnels and customer journey maps inform each other, and while they are different, they both tell the same story. Tracking customer journeys helps understand your leads and their buying process:
Answers to these questions, along with the data collected at the touchpoints in the customer journey, help design an efficient lead nurturing process. A well-built marketing funnel targets customers with relevant messages at different stages, and create a frictionless path to purchase and provides a better customer experience
[i] “Search Behavior Has Changed the Path to Purchase – Think with Google.” Google, Google, www.thinkwithgoogle.com/feature/path-to-purchase-search-behavior/.
[ii] Gallo, Amy. “The Value of Keeping the Right Customers.” Harvard Business Review, 5 Nov. 2014, hbr.org/2014/10/the-value-of-keeping-the-right-customers.