What is a marketing funnel and why it is important for you as a business owner to understand how it works?
You have probably heard about the marketing funnel in one of your business courses in the past. Or perhaps you heard about it when you spoke to a marketing or sales consultant. And if you haven’t heard of it yet, you should know that the marketing funnel is an important piece in any marketing strategy.
When I first heard about it, I thought this is just theory, I don’t really need to know this stuff, I want to get to the fun part: the sale! Well, it turns out that most of your potential customers are not ready to buy. In fact, LinkedIn says that 95% of your audience is out of market. This means they are your potential customers, but it will take them some time to think about buying your product or service.
"The 95-5 rule shows that 95% of your potential buyers aren’t ready to buy today. These 95% are “out-market” today, but will be “in-market” sometime in the future."
That’s why we need to think about a full marketing funnel strategy, even if our intention is to sell, we need to think of all the stages in which our potential customer is right now.
So what exactly is a marketing funnel?
A marketing funnel is a journey that a customer takes from awareness of a product or service to purchase. Let’s look at the components of a marketing funnel, shall we?
The funnel is made up of four different components, including:
1. Awareness: The customer becomes aware of the product or service.
2. Interest: The customer is interested in the product or service.
3. Desire: The customer wants the product or service.
4. Conversion or Decision: The customer buys the product or service.
The top of the funnel: Awareness
The funnel begins with marketing activities that create awareness of the company and its products or services. The goal is to drive the largest number of potential buyers through the upper part of the funnel, where they can be filtered into smaller and smaller groups.
The middle of the funnel: Interest
When it comes to marketing, the middle of the funnel is all about interest or consideration. This is the stage where you start to pique your audience's curiosity and get them interested in what you have to offer.
To do this, you need to create content that is relevant and interesting to your target audience. This can be anything from blog posts and infographics to videos and eBooks.
The key is to focus on providing value and building relationships with your audience.
The middle of the funnel: Desire
The desire stage is when a consumer begins to take an active interest in your product or service. They may start researching your company and looking at reviews. This is the point at which you need to make sure your product or service is meeting their needs and desires.
If you can successfully guide a consumer through the desired stage, you are three steps closer to making a sale. But it's important to remember that each stage of the marketing funnel is important in its own right.
The bottom of the funnel: Conversion
This stage can also be called Decision as it is when the decision-making process takes place in the marketing funnel. This is when customers have decided what they want and are ready to buy. The bottom of the funnel is all about helping customers make that final decision, to close the sale or to convert the client.
There are a few things businesses can do to help customers convert into new clients. First, they need to make sure they have a clear and concise message. Second, they need to provide relevant information that will help customers make informed decisions. Finally, they need to be available to answer any questions or concerns that customers may have.
Making sure you have a strong bottom-of-the-funnel strategy is essential for any business that wants to succeed in marketing. By taking the time to understand your customer’s needs and providing them with the information they need to make a decision, you’ll be able to close more sales and grow your business.
Below you can see a hypothetical example of a customer journey, as you can see, there is no direct line. There can be many touchpoints before the sale is made. Some of them can include word of mouth, a post on social media, a video call, an email, etc.
The customer in the image below goes from unaware to aware of the brand, then perhaps a follower, considering buying. And finally, a client who might become an ambassador if she/he is happy with the product or service.
Let’s talk about a specific real example.
I belong to different women communities of business owners, founders and entrepreneurs. I often see people promoting their products or services on social media, in the groups I belong or in person. Last year I saw a post about a woman running a retreat, the retreat was going to happen in 3 months from the time I saw the post.
I had been thinking about a retreat, but I didn’t know the woman at all. The post piqued my curiosity. I clicked on her profile to read more of her posts. That led me to her website, where she had some testimonials and great pictures. I decided to send her a message. We had a virtual call and I liked her. After our conversation, I felt I could spend a long weekend retreat with her in the lead. I decided to tell a friend about it. She was game. I spoke to my family and made some arrangements to be free on those days. Then I booked the retreat.
Now, let’s analyse this example as a full marketing funnel strategy:
First, I was unaware of this retreat. I did not know of its existence. I did not know the woman running it either. At this stage, I was out of their funnel.
Then, when I read the social media post about this lady promoting her retreat, I became aware of it (first touchpoint). And I remembered that I “needed” something exactly as what she was describing. But I still didn’t know her, so I could not know if I liked her, or trusted her.
As I was curious, I dug deeper, I wanted to find out more about her and the retreat. I visited her website and her social media account and started following her on social media (second and third touchpoints). I went to the interest and desire stage.
I messaged her (fourth touchpoint), and when she kindly replied and suggested a chat (fifth touchpoint) I liked her and eventually trusted her.
We continued the conversation via email and messages until I bought the retreat (many more touchpoints). At this time, I had already taken a decision and I converted into her new customer. I was now in the Conversion and last state of the marketing funnel.
I can’t remember exactly how long I went through all the stages, from being unaware to converting, but I believe it was around 10 days. Of course, not all customer journeys work so fast.
I hope with this example you can think of your own customer journey and identify where you might be weak. If in my example, the lady in question didn’t have a website, didn’t respond so quickly, or didn’t suggest a meeting, perhaps I would have never converted.
I invite you to identify what elements you have in place for all the different touchpoints your potential customers might have before deciding to become a client. Is your website working properly? Do people know what you offer? Do people engage with your content? Do people see the value in what you offer?
The way you communicate in person, on social media and on your website should be coherent and you should remember that not everyone who comes to you is ready to buy just now.
Before running any marketing campaign it is worth checking first if there are any cracks in your digital eco-system. Fixing those cracks first will save you a lot of money and time!
Do you need help identifying what is missing in your strategy? Book a call with me and let’s find out!