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A marketing funnel is a visual symbol for the route taken by a lead as he or she moves towards turning into a customer. Every business has at one point or another used a marketing funnel to close a sale. The funnel helps brands visualise their sales process. It is also the best tool to measure overall conversion success between every stage of the funnel.
The width of each stage of the funnel echoes the audience size, with the bottom being the narrowest and the top of the funnel being the widest. Truly understanding the marketing funnel is crucial because just like any funnel, the high volume of leads that enters gets smaller as they move down the funnel.
The overarching question when utilising a sales funnel is always: How can brands keep more leads moving into the funnel and turn them into real customers?
This article will answer some of the most basic questions brands may have about marketing funnels including:
- What is a marketing funnel?
- Why is marketing funnel still relevant?
- Why does a customer convert in a marketing funnel?
- What are the different types of funnels?
- What mistakes should be avoided?
- How can brands build their own marketing funnel?
- How can brands manage and optimise their sales funnel?
- What are the best tools to use in building a marketing funnel that works?
What is a marketing funnel?
The simplest definition of a marketing funnel is that it represents an image that consumers take to become a customer. Companies use the funnel idea as a process to track leads as they move down through the sales stages. They also use it further to align marketing and sales targets, activities and systems.
Thanks to the diverse kind of businesses using the marketing funnel, it is called in different names including “sales funnel”, “lead funnels”, “purchase funnels” and so forth. The names may vary slightly but it all has the same aim, to convert leads into real customers.
The sales funnel process was a concept started by Elias St. Elmo Lewis in 1898. The original funnel that he prepared is still one of the most common models that brands use to this day. In every stage, brands should ask themselves these questions to see if their funnel has been working:
- Awareness – this stage is all about how a brand can make buyers aware of their products or services? What is are the strategies in place that can create brand awareness?
- Interest – How can brands gain the interest of customers? What content strategy can be used?
- Desire – What makes the product or service desirable? How can brands interact with the leads personally so that emotional connection is met?
- Action – What is the call to actions (CTA’s) used and where these buttons placed? Can leads easily connect and where would they expect to find it? Consider what marketing platforms are being currently utilised by the brand to improve engagement like website, landing pages, emails and more.
- Retention – What does the brand offer to encourage loyalty?
Why is marketing funnel still relevant?
The modern sales funnel has fully taken over the traditional model. This means every stage of the funnel is still there, however they don’t look like they used to. Brands still need to work hard to attract leads, generate interest and engagement, encourage desires and call leads to make an action, but not necessarily in that order and not using the same strategy.
Thanks to the surplus of information available, leads are now well-informed about different products and services. They usually learn about the product from different or a combination of sources. And after they’ve become customers, they can also brand advocates or critics.
It is a brand’s job to ensure that at every stage, a customer is delighted – which means the marketing funnel has completely changed from simple awareness and buy to providing customers with unique experiences.
How does a marketing funnel work?
To understand the concept of how a funnel works, a brand should understand what motivates a lead to buy. Leads become customers because of several different reasons. When brands understand how and why leads convert they can provide specific solutions.
- Identity – Consumers buy when the product or service feel that the product or service fits who they are or at least how they see themselves to be (or both).
- Experience – Consumers buy to enjoy a new or unique experience.
- Value – Consumers buy when they see that the product or service has a unique value.
- Need – Consumers buy when the see the product or service can provide solutions to their daily needs.
- Identity/Community – Customers buy products or services that help reinforce their feelings of being a part of a community.
- Jobs-to-be-done theory – When brands effectively create a need – even when customers are still not aware of it, they will most likely convert.
What are the types of marketing funnel?
No single funnel is the same. Each type of business should create a marketing funnel that will fit the objectives of their brand. It is important to understand brand goals to pick the right type of funnel.
- Lead magnet funnel – This is one of the most common types of funnels used by brands online. The brand gives something in exchange for data from the customer, such as an email address.
- Survey funnel – Utilises surveys to engage customers and reel them into the funnel.
- Squeeze page funnel – Designed to “squeeze out” a lead’s email address by giving them a valuable item as an initial point of engagement. The intent of this funnel is to pique the interest of the leads.
There are dozens of other marketing funnel types. It can greatly vary from one business to another depending on how what type of customers they want to get.
What typical sales funnel mistakes should be avoided?
Attracting the wrong leads to the brand
An effective sales funnel can convert leads into customers in no time, but the output of this process will be limited by the type of input the brand makes. Brands must target the right audiences to the top of the funnel to save time, effort and money.
Not nurturing the prospects through the funnel
When leads have begun to move into the interest phase, brands must make it their priority to nurture the leads. According to the report published by HubSpot, “The Ultimate List of Marketing Statistics for 2019“, “74% of companies around the globe prioritise lead nurturing and conversion.” This means any business big or small should consider putting nurturing first to encourage a customer to move further down the funnel.
Using a poor landing page
Landing pages are a vital part of a marketing campaign. However, many businesses still do not realise its importance. According to the Landing Page Handbook (2nd edition) by MarketingSherpa, “About 44% of clicks for B2B brands are directed to the company’s homepage – not a special landing page. Additionally, the B2B companies that are using landing pages, only 62% have six or fewer landing pages.”
To get the most out of the marketing efforts, pitch to the leads who are ready to convert using a landing page. There are plenty of tools that can used to build a dedicated landing page. Consider the following Landingi, Bitrix24, EngageBay and BigMarker.
Not capitalising on CTA’s
Call to action is a part of a story, ads, webpage or piece of content that inspires the audience to do something. In marketing, CTAs is one of the best way for a brand convert a lead, visitor, viewer or reader into a customer. CTAs can initiate different actions depending on the brand’s goal.
Use CTA’s at the right places and at the right time. The brand must decide the action that leads must take. A good example is using content upgrades. Content upgrades allows brands to offer leads a chance to get exclusive content and sign up to the email list.
Designing the brand’s marketing funnel
Step 1: Research
Creating buyer personas to get a better understanding of the market
Before a brand can design any ad or even draft the first content, they need to have a deep understanding of who their customers are. This initial critical step will lead to the success of the marketing funnel because it sets the roadmap for the entire process.
A buyer’s persona allows brands to know where to look for initial leads. It also gives information on what type of content will be valuable for these potential customers. Finally, buyer personas can help segment the marketing funnel so that brands can prepare tactics for diverse audiences.
Buyer’s persona should include basic demographics (like gender or age), information preferences (like social media or blogs), goals and more. There are different ways to find information when building a buyer’s persona. A brand needs to have the right tools to collect this data.
- Surveys – Survey Legend, My Survey Lab and Survey Monkey.
- Secondary research – Using websites like Think with Google and Statista
- Media Audits – Using applications like Reddit, Quora and Facebook Groups.
Competitor research will help brands emulate successful practices or avoid poor strategies from similar businesses. It is the best way to outperform direct competitors. Competitor research is all about analysing what the competitors do. Information to collect include:
- Where are they are sourcing their traffic?
- What are their social media, SEO, advertising and content strategy?
- What are their retention strategies?
Step 2: Generate traffic
Pulling leads to the top of the funnel
According to the 2019 Ultimate List of Marketing Statistics by HubSpot, “65% of brands consider traffic and lead generation as the biggest challenge in their marketing campaign.” This is why brands must know their leads and where to source these leads to draw them in.
There are typically four types of traffic to choose from:
- Direct traffic – These are site visits that happen when a consumer types the website address into the URL of their web browser. These visitors are those who have heard about the website address offline (such as by word of mouth or from a billboard).
- Organic search traffic – This type of traffic is visitors who click on the site from within a search engine’s organic search results (unpaid or earned). The best way for a brand to improve this traffic is to work on their SEO which will help their website rank high in search results.
- Referral traffic – These visits come from links found on other websites. These links are popularly known as backlinks and can be found a variety of content from other sites like blogs, social media posts, news and more.
- Paid media traffic (PPC) – This traffic includes all visits that are a result of any form of online advertising. This includes social media ads (such as Facebook ads), search engine ads, display advertising (banner ads), Google search ads and video advertising (Youtube pre-roll ads).
The use of lead magnets is another excellent way to pull traffic into the funnel. A lead magnet is an offer that brands can give to leads in exchange for their email address and perhaps other important information. Lead magnets must have high perceived value, provide instant gratification, and demonstrate a unique selling point for the brand. Some of the most common examples of lead magnets are:
- Training Videos
- Free trials
- Case studies
- Coupons or discount codes
Step 3: Engage
Once brands have the traffic, the next move is to prepare the leads towards conversion – with the help of engaging content. The initial engagement happens when the customer consumes the content included in the lead magnet, therefore, it is crucial to make lead magnets very interesting.
Some leads will be ready to turn into customers once they click on the lead magnets. While others, will likely want more content from the brand. The solution is to create prime content to step up the engagement.
There are several ways to deliver this additional content to leads. Brands can also use marketing funnel automation tools to make their work easier.
Email marketing – An email drip campaign should be in place once brands have the list of leads. Every lead can be effectively nurtured through email marketing. Some of the best tools for email marketing are Segmail, Kingmailer, SendX and Omnisend.
Social media – Social media platforms should also be an integral part of a marketing funnel. As a matter of fact, many brands also create a specific social media marketing funnel within their campaigns. Thankfully, social media can be effectively managed using different tools like Bitrix24, NapoleonCat, Hootsuite and Buffer.
Media subscription – this tactic is best for brands who have the hardware and enough time to create regular media content. Some examples of great media content that customers will love are video series, webinars and podcasts. Some of the best video hosting sites to look into are Youtube, Vimeo, Wistia and Hippo Video.
Content – how it plays an integral role in a marketing funnel
The right content can help reach the right consumer at any stage of the funnel, despite the misconception that it is only useful during the awareness stage. In fact, as leads continue to engage through content, it can help widen the funnel further down.
At the top of the funnel, the main aim of the content should be to educate the leads. The type of content that can be used during this stage are:
- Blog posts
- Comprehensive guides
- Email newsletters
- Big content (games, long-form content, tools)
Once customers are “aware” and moves further down the funnel, the brand should supply them with content that helps evaluate and learn more about the product. This is the perfect time for brands to “show-off” and makes sure customers remember them.
- Case studies
- Product descriptions and data sheets
- How-to content that showcases your products
- Demo videos
At the bottom of the funnel, right before the brand makes a sales pitch. This is the point when the customers are already convinced of the product and just need that extra “trigger” to buy. Some of the best content to use are:
- A streamlined, comprehensible, and trustworthy sales process
Step 4: Conversion
Turn leads to customers
Finding the right conversion transition is crucial at this stage of the funnel. Throughout the other stages of the funnel, the brand should have provided enough high-value content, engaged, entertained and educated the audiences. Once the brand has built enough trust and relationship, it is the perfect time to pitch the offer.
Marketing funnel examples to emulate
Even some of the most popular brands around the world are using a marketing funnel that works. Here are some of the best working funnels that have consistently earned customers for brands.
Content leader Netflix uses a 2-step marketing funnel to pull leads into the sales funnel. Netflix uses a one-month free trial offer to encourage customers to submit their email addresses and credit card information. By giving a very high-value offer, leads give out their information and will have no way out of it except to cancel the subscription before the trial period ends.
MailChimp uses a unique funnel by allowing brands to use its services for free. They watermark every email sent by adding the words “Powered by MailChimp”. This way, every customer who receives the content through MailChimp can help create a viral loop.
Crazyegg is a powerful website optimisation tool that can help brands understand more about customer behaviour. The main force which makes CrazyEgg’s marketing funnel is the excellent content that it produces. Aside from content, they also give out a 30-day trial offer for customers to use the CrazyEgg tool. This combination of high-value content and service compels leads to turn into customers.
Best practices when building a marketing funnel
According to the report by Demand Gen titled, Lead Nurturing Benchmark Study, “Just 29% of brands invest in nurturing their current customer base.” However, with the changes in customer’s buying behaviour, nurturing leads should be a priority.
According to Forrester, Lead-To-Revenue Management Platform Vendors Report, “Brands see a 20% increase in sales opportunities when leads are nurtured.” The same report revealed that “companies that excel at nurturing their leads can gain 50% more sales at a 33% lower cost.”
Lead nurturing is all about prioritising the process of engaging a target group. It can be done by giving leads relevant information at every stage of the buyer’s journey.
A brand’s marketing funnel is a living and breathing entity that can change any time. Therefore, it is crucial to monitor key metrics. Keeping a close eye on any possible threats or difficulties that may clog the funnel to help identify areas for improvement.
Aside from the typical KPIs that brands should be consistently monitoring, these key metrics will also help push brand marketing further.
- Social Selling Index – If any stage of the sales funnel includes social selling on LinkedIn, this metric is crucial. SSI measures specific elements that will help brands understand their progress this includes branding, connecting, relationship building and social selling engagement.
- Customer Lifetime Value – For brands that worry about high acquisition costs, CLV is an important metric. It shows brands how effective each marketing method is from the first stage to the last. It is also a great way to alert brands about any problems with offers or value propositions.
- Sales funnel flow – This metric will show how long it takes for every lead to convert into a customer. It helps show the number of leads, the number of qualified leads, average response time, closing rates and the average amount of time it takes for a lead to move down the funnel and convert into a customer.
Apply customer loyalty
Brands need to continue to add value and provide quality service to customers – even well after they have completed a purchase. No sales funnel is complete without implementing a working customer retention strategy.
According to the Loyalty Report 2019 by Bond, “the most successful brands like Waze, Airbnb, Lyft, Netflix, and Nike all use a customer loyalty program”. Smaller and even start-up brands should not miss out on this opportunity.
Applying customer loyalty and retention strategies into the marketing funnel creates a loop in which drastically improves the buying journey of customers.
Optimise every stage
When brands are optimising the sales funnel, it is important to understand what stage each user is in. If there’s a mismatch between what leads are expecting and what the brand is optimizing for, the marketing efforts won’t be successful.
Every customer should be given several chances to make a purchase and it should be presented to them as often as possible. Brands should consistently and offer the product and services for purchase.