The marketing funnel has been tweaked and modified countless times since the concept was first developed by E. St. Elmo Lewis in 1898. But, when you consider how much technology and consumer habits have evolved over the past 120+ years, the marketing funnel really hasn’t changed all that much.
This shows how robust Lewis’ original concept was – and still is today.
The basic principles of the marketing funnel are essentially the same as they have ever been, but the tools and strategies most effective at utilising them are very different now.
In this article, we’re looking at what the marketing funnel really means for marketers today and how you can use it to increase sales in the year ahead.
How the marketing funnel works
The earliest version of a sales funnel that I’m able to find is this one from 1904 by Frank Hutchinson Dukesmith, editor of the Salesmanship magazine:
Here, Dukesmith introduced the concept of four stages that lead to a sale: Attention, Interest, Desire and Conviction. Nearly 50 years later, a marketing and sales executive in the pharmaceutical industry, Arthur F Peterson, published the following illustration in his book, Pharmaceutical Selling, Detailing, and Sales Training:
As far as I’m aware, this is the first time the concept of stages in a consumer journey being illustrated as a funnel and the four stages of Attention, Interest, Desire and Action (AIDA) being used.
This funnel concept would remain one of the most central concepts of sales and marketing for decades.
So how does the funnel work?
Basically, it describes the key stages a consumer needs to go through before buying something. People don’t just wake up and decide to buy a new car for no reason. Likewise, people don’t always wait until they actually need something before buying it. Let’s face it, people buy all kinds of crap they don’t need.
And one of the key reasons people buy things they don’t need is because top brans understand the consumer journey. Not only that, but they know how to instigate this journey and guide consumers through it.
How the AIDA funnel works
Based on the AIDA principle, a basic sales funnel looks like this:
- Awareness: People can’t buy something they don’t even know exists.
- Interest: Once people know about your offer, you need to turn this awareness into interest.
- Desire: With consumer interest, the next stage is establishing an emotional connection that inspires a desire to make the purchase.
- Action: Finally, you show consumers how to turn that desire into reality (sign here, click this, sign up, etc.).
Now, this basic sales funnel offers a simplistic view of the consumer journey and the stages buyers go through before making a purchase. So you can use this as a basic template for your marketing strategy. For example, you create brand/product awareness campaigns to build an audience, target this audience with ads to generate interest and deliver content to build emotional desire before hitting them with the big CTA.
That’s great – a marketing strategy that takes users from A, all the way through I, D and A.
This isn’t the only way you can use the marketing funnel, though. You can also use the marketing funnel to generate leads at every stage of the consumer journey and bring them on board with your brand – including those who are ready to pull the trigger on a purchase right now.
We’ll look at it this in more detail later.
First, let’s take a look at the kind of marketing funnel we’ll be discussing in this article.
What does the modern marketing funnel look like?
There are more variations of the marketing funnel than ever. To be honest, though, I don’t think it really matters all that much which version of the funnel you prefer to use as a template (and they are only templates) because the principles are more or less the same.
It’s how well you understand these principles that really matters and I think simplicity always helps with this. Which is why I’m going to refer to this visualisation, used by Liz Willits in this post on the AWeber blog, as the basis of this article:
Unlike the AIDA funnel, this approach considers consumers after the initial purchase. This is really important because you want your existing customers to keep buying from you and you also want them to help you attract new customers.
This five-step sales funnel will help you do this.
You can call these steps what you like, but every successful sale requires consumers to go through the first three stages. As for the other two, you want every possible customer to reach these stages of the buying cycle.
- Awareness: The moment a user first discovers your brand, product, offer, etc.
- Consideration: They’re interested but not ready to buy now – perhaps comparing you against the competition or waiting for a special offer.
- Conversion: When a user finally makes the choice to buy (hopefully with you).
- Loyalty: Users who regularly buy from you and find it difficult to go elsewhere.
- Advocacy: Users who actively recommend you to potential buyers.
The key thing here is that your marketing funnel doesn’t end with the purchase. There is plenty more work to be done at this stage. You can add as many stages into this funnel as you deem necessary to your brand but, again, it’s up to you how complex your marketing funnel should be. You can also expand it with time as your strategy becomes more efficient and new opportunities arise.
Capturing leads at every stage of the marketing funnel
Another important principle of this sales funnel is that we’re not talking about a linear process here. You don’t want to limit your marketing strategy to generate leads at the top of the funnel and then guiding them all to the end. There are thousands or even millions of people out there already who may know your brand but simply aren’t interested in it yet.
There are even more people out there who are interested in what you’re selling but know your brand exists yet.
Each stage of the marketing funnel represents a state of mind. For example, some consumers are still trying to decide which TV to buy or where to go on holiday while others know exactly what they’re looking for and simply need to find the right offer.
You want to capture leads at every stage of the sales funnel and target them with messages that reflect their state of mind. To do this, you need to assign user actions to each stage of your marketing funnel. For example, a first-time visitor on your site will fit into the “awareness” category while someone who has repeatedly visited the same product page probably fits in the “consideration” stage.
By mapping out these interactions and assigning them to each stage of your marketing funnel, you can then target each user – based on their previous actions – with marketing messages designed to move them closer to the purchase.
Where to focus in your funnel?
Before we dive into specific strategies at each stage of your funnel, it’s useful to have an idea of where to focus – at the top (e.g. driving traffic), in the middle (e.g. CRO, lead capture), or at the bottom (e.g. lead nurturing, optimising lifetime value etc.)?
One way to answer this is with data. By modelling your funnel (either in spreadsheets or a tool like TrueNorth) you can run “what if” scenarios to know where your attention is best focused to achieve your goal.
Another approach is to take a broad approach of developing strategies at each stage of your funnel. Either way, it’s important that you define an overarching strategy to focus your time, energy, and marketing budget.
1. Awareness
Marketing goals: Build awareness, target relevant audiences
Stage one of the marketing funnel is all about getting your brand discovered by the right people. Most of the stuff you’ll read online about digital marketing focuses on this stage of the funnel by using strategies like SEO, social media and paid search to bring new visitors to your website.
In reality, this is only the beginning of a complete marketing strategy that turns new visitors into paying customers over multiple touchpoints, sessions and devices.
The most important thing at this stage is making sure you target relevant audiences to bring traffic to your website that actually has the potential to buy into your offer. You’re wasting budget, time and other valuable resources if your stage one lead generation strategies are bringing in traffic with no real interest in doing business.
Building awareness with SEO
Your SEO strategy for building awareness is going to target low-intent keywords from users who may not even realise they’re interested in buying anything yet. For example, a business owner who buys into marketing software in the near future might only search for “marketing tips” or “how to generate more B2B leads” right now.
So your aim here is to build a collection of high-ranking content for the topical interests of your target audience. You may reference your product/service in some way or subtly promote the need for something like them in this content but it’s generally a good idea to keep the sales talk to a minimum.
The goal here is for relevant audiences to discover your brand name and take value from your content.
Building awareness with paid advertising
There are also plenty of low-intent keywords that trigger ads in Google Search and this is an opportunity to increase awareness about your brand. Now, I would describe this as a fairly advanced PPC technique because you really need to have a mature paid search strategy (quality ads, landing pages, conversion rates, remarketing campaigns, etc.) and a solid lead nurturing system in place first.
If you’re not at this point yet, focus on targeting high-intent traffic with your PPC ads and come back to this later.
The reason I say this is because you’re paying for any clicks these ads generate and lower-intent traffic generally has a lower chance of converting – or, at the very least, you’re going to have to work harder to guide these leads all the way through your funnel.
The other thing to keep in mind is that low-intent traffic might be less likely to click your ad in the first place. This means you could end up with a lot of impressions (people seeing your ad) but a low number of clicks, which is detrimental to your Quality Score and overall PPC performance.
So keep an eye on those metrics.
Despite these risks, targeting low-intent keywords in Google Ads can be a powerful strategy because it gets your brand seen at the earliest stage of the consumer journey, giving you a front-row seat, right at the top of the results page.
Better yet, you can do what Leadfeeder has done above and get yourself ranking in the featured snippet and the only ad on the page to dominate the SERPs for a search query as broad as “how to generate more B2B leads”.
This is a perfect example of how SEO and PPC can work together to maximise awareness of your brand.
Building awareness with social media
Social media isn’t a particularly strong channel for the latter stages of the marketing funnel but it’s a powerhouse for building awareness. The key thing is to know which networks are most important to your audience and what kind of content you’re going to need to create in order to capture their attention.
Pretty much every business’ audience in on Facebook, for example, but not many brands produce the right quality of video and visually-engaging content it takes to get results on the network.
Facebook can be expensive in terms of content investment but it’s relatively low CPCs, huge audience and incredible targeting options make it a great long-term strategy for building awareness.
For B2B brands, LinkedIn and Twitter are still the networks of choice, according to Content Marketing Institute’s 2018 B2B Content Marketing report.
While ads are expensive on both networks, the content investment can be much lower and you’re still able to get results from organic activity on both networks – although you will want to run ad campaigns to maximise awareness.
2. Consideration
Marketing goals: Target higher-intent audiences, turn awareness into purchase intent
With awareness building in the first stage of your marketing funnel, you’re now ready to target new users already in the consideration stage. At the same time, you’ll want to target existing leads who are aware of your brand/message and them bring them into this second stage of the funnel.
Target higher-intent keywords
While your SEO and PPC strategies focused on low-intent keywords for building awareness, you’re going to target higher-intent keywords for stage two of the marketing funnel. This is where you target people who show a clear intent, desire or temptation to make the purchase.
You’ll be targeting keywords like “best time-management software” or “business insurance for startups” that show a clear intent to buy – either now or in the near future.
As we explain in our 10 Advanced Remarketing Techniques to Increase Conversions article, the key to successful remarketing is segmenting your campaigns to target specific user interests, based on what you know about them: the ad they clicked, the landing page they visited, actions they took on your websites, etc.
“The first thing you need to know about advanced remarketing is how to segment your audiences. Instead of targeting every visitor with the same ad you’re going to create highly targeted campaigns based on the actions they take on your site and the interests these confirm.”
Depending on your analytics setup, you can track specific user actions and create segmented remarketing lists with messages designed for each audience. For example, if you’re using Event Measurement in Google Analytics (linked with your Google Ads account) then you can place users on remarketing lists based on the page elements they click, as well as the URLs they visit.
Already, this allows you to create remarketing lists for the following types of user:
- Bouncers: People who leave your site within seconds (without viewing a second page).
- Scrollers: Visitors who spend a good amount of time on our landing page before leaving.
- Browsers: Users who visit multiple pages, spending minutes on your site.
- Clickers: People click one of your CTAs but don’t make the final conversion.
- Quitters: Users who start the conversion process (e.g.: filling out your form) but quit before converting.
These actions all indicate the extent of users’ awareness vs interest, which you can use to create relevant campaigns for each audience. And you can use this same tactic to target leads at all stages of your marketing funnel, too, using the actions they take on your website to assign them to remarketing lists.
Capture email leads for lead nurturing
Email marketing is the most important channels for reaching existing leads at the latter stages of the marketing funnel and guiding them from one stage to another.
Before you can do this, you need to get visitors signing up to your email lists.
You’ll find plenty of campaign ideas for building your email list in these two articles: 24+ Best Lead Generation Ideas and 11 Lead Generation Ideas That’ll Triple Your Email Signups.
With a healthy number of email leads every month, you’re going to need a customer relationship management (CMS) system and the right set of email marketing tools to manage these leads as they progress along the consumer journey.
Luckily, you can get all of this built into a single CRM, email and marketing automation platform and we use ActiveCampaign here at Venture Harbour.
This gives you a platform to manage and organise your leads at every stage of your marketing funnel. You can also use ActiveCampaign to track user behaviour, place users on segmented lists and target them with highly relevant email campaigns. And where ActiveCampaign really shines is its email and marketing automation, which means you can automate entire marketing strategies, turning awareness into consideration and guiding leads through every stage of the consumer journey.
3. Conversion
Marketing goals: Convert leads, minimise conversion barriers, turn consideration into action
Everything you’ve done so far has been building up to the point where users take complete some kind of conversion. Purchases are normally the most valuable type of conversion but there are dozens of others you might be targeting with different campaigns: email sign-ups, content downloads, account creations, free trials, demos, upgrades, etc.
Create search campaigns for people ready to buy now
Much like the first two stages of the sales funnel, you’re going to create organic and paid search campaigns targeting new leads at the conversion stage and these are targeting users who are ready to convert right now.
So your SEO strategy is going to create organic content for specific conversion goals – such as guides to getting the most out of your 14-day free trial. Or you might create comparison reviews of your product vs your rivals to rank organically for people ready to do business with your competitors.
Likewise, you can create Google Ads campaigns including your rivals’ brand/product names as keywords to steal leads at the last moment. You’ll also want to target keywords that signal immediate purchase intent like “buy,” “free delivery,” “in my area,” “best price” and anything else that suggest a user is ready to commit.
Do CRO the smart way
Conversion rate optimisation (CRO) is a strategy that can transform business results. Unfortunately, it’s also a strategy you can waste huge amounts of money and time on if you do it poorly. Above all, you need to know your tests and optimisations are going to result in enough additional income to pay for themselves and generate more profit.
Too many businesses and marketers make the mistake of getting bogged down in design details that don’t really impact conversions or sales. You might end up with better user metrics and an improved UX but this means nothing if you’re not making more money from your CRO changes.
So make sure you focus on the aspects that truly influence conversions. In our 9 Simple CRO Fixes That Yield Big Results article, we run through the following areas that are almost guaranteed to make a genuine impact on conversions, profits and the KPIs that actually matter:
- Reduce loading times
- Switch to single-column layouts
- Use the ‘magic number’ technique
- Use the ‘inverted pyramid’ for CTAs
- Switch to multi-step forms
- Remove navigation from landing pages
- Test CTA placement
- Test secondary CTAs further down the page
- Try exit-intent pop-ups
You’ll also find some great examples in our 10 CRO Case Studies You Can Replicate to Increase Conversions article.
Above all, focus your attention on increasing incentive and removing conversion barriers. Test and optimise your page copy to find the most compelling message and ensure obvious UX issues like loading times are in order.
You can also use tools like Hotjar and its heatmaps feature to see what users are getting up onto your website. This means you can check whether users are seeing your CTAs and determine which elements they’re clicking on (and not clicking on).
Start with the most important elements on your key pages (content, CTAs, forms, loading times, navigation, etc.) and get these in order first. Then, you can move onto smaller details like smaller layout changes, images and finer tweaks to find those extra performance boosts.
4. Loyalty
Marketing goals: Get customers to buy again, reduce churn rates, build loyalty
A lot of brands make the mistake of thinking the marketing funnel ends once their primary conversion goal is accomplished – normally a purchase of some kind. However, this is just the beginning of the customer experience and your return on investment from all the work you’ve put into accomplishing that conversion goal.
Now, you need to maximise that ROI.
With your marketing strategy generating and closing leads from the first three stages of your funnel, the emphasis shifts towards customer retention and maximising the value of each customer. In other words, you want your existing customers to keep buying from you.
Make customer service a priority
Strong customer service is at the heart of any commercial relationship and we’ve touched on the importance of this before.
“No matter how good your products/services are, customers are going to experience problems from time to time and how you deal with these is going to be a major factor in your retention rates.”
Look at a review site like Trustpilot and the vast majority of negative feedback comes down to customer service and support. You can see that customers don’t expect a product to be perfect but they do expect a company to be there for them when something is critically wrong.
This shouldn’t come as a surprise.
You can learn a lot from software companies that excel in customer service and support. Users are always going to run into problems with software – a complex mix of user error, configuration issues, integration problems, service outages and all kinds of technical troubles. Some of these are critical, others not so much.
The software companies that nail customer service provide an extensive online library of guides, troubleshooting and FAQs to help their customers get the best experience from their product and deal with any basic user errors.
What this also does is save the company from its support lines and email addresses being clogged up with basic user queries, allowing it to deal with more pressing customer problems.
You’ll also see a lot of software companies use chatbots and live chat widgets to provide an instant response to basic customer problems. In many cases, these will simply point them to the relevant online resource or connect them with technical support if their issue is more serious.
This helps the company automatically filter customer cases more effectively.
Of course, the most important aspect of customer service is providing person-to-person support where necessary. Your support team should always be ready to jump in when customers can’t get what they need from your online channels and these interjections should be both rapid and effective.
Achieving this can be tricky if you’ve got a large customer base but this is another area where a good CRM platform shines. By automatically keeping track of customer statuses and interactions, your sales and support teams always know when they need to jump in and provide that human touch.
This is is the kind of support that is going to keep your customers thinking they made the right choice when they decided to do business with you.
Reward your customers
Rewarding customers for their ongoing purchases makes them feel valued and encourages them to keep buying from you. By incentivising loyalty you increase motivation to keep buying and you prove that this relationship isn’t a one-way deal.
You value your customers and like to give them a little something extra now and then (in addition to your usual stellar service, of course).
Starbucks excels at rewarding its customers with points, free drinks and other incentives to keep them coming back for more mediocre coffee. If this isn’t proof that top service can even trump the quality of the product itself, I don’t know what it.
Run upselling/cross-selling campaigns
To maximise customer value, it only makes sense to encourage them to buy your most profitable products for as long as possible or the highest quantity of products possible. This is where upselling and cross-selling campaigns aim to increase the value of every existing customer.
- Upselling: Encouraging customers to purchase a more profitable product or service than their usual/recent purchases.
- Cross-selling: Encouraging customers to buy additional products or services, based on their previous purchase decisions.
If you’re an e-commerce brand, you’ll do the whole Amazon thing and make relevant product recommendations to tempt customers into making further purchases. If you’re a SaaS company, you’ll try to upgrade as many customers as possible to the premium version of your software product.
An example of upselling from video online video platform Vimeo
With the email marketing and automation tools available today, you can basically automate these campaigns entirely. You can even create new segmented lists based on how customers respond to your upselling/cross-selling emails to target those most likely to make the desired purchase and keep the rest of your leads warm.
5. Advocacy
Marketing goals: Turn happy customers into a lead generation strategy
Happy customers are more likely to keep buying from you but they’re also more likely to recommend you to other people – and 83% of buyers say recommendations from their friends/colleagues have the biggest influence on their purchase decisions.
Meanwhile, separate studies show that 76% of consumers trust online reviews as much as personal recommendations. These two stats should tell you everything you need to know about turning your existing customer base into new prospects.
Build a profile of positive reviews
Yes, we’ve already touched on reviews in this article and this has become one of the most important marketing strategies for brands across all businesses in the digital age.
Having a profile of positive reviews on platforms like Google Reviews, Trustpilot and other popular third-party platforms is invaluable and you don’t need to stress about achieving 5-star ratings either.
Online buyers are a scrutinous bunch and studies have shown they’re less likely to trust a brand that has a gleaming profile of 5-star reviews. In fact, it turns out the review scores between the 3.5 to 3.7-star mark have the most positive influence on buyers.
So concentrate on providing a quality level of service and generating as many positive customer reviews as possible. Be quick to respond to negative reviews on the platform users leave them and try to resolve issues as best as you can – but don’t worry about perfect scores.
Get success stories from your customers
Another area where your existing customers can help you attract new ones is through testimonials, success stories and case studies. B2B businesses generally want a good collection of customer testimonials on their homepage and possibly even specific service or product pages to entice conversions.
Case studies and success stories are a good resource for leads at the interest stage, too, who might want to know more about how you operate or compare you to competitors. You can also create and optimise these pages for organic search and use them as part of your awareness campaigns to generate new leads.
Create referral campaigns to turn customers into new leads
Earlier, we mentioned the power of personal recommendations and this is something every business should leverage. The consumer journey shrinks considerably when your existing customers recommend you to their friends or colleagues – and this is especially true in the B2B environment.
Best of all, this strategy is simply to implement and easy to manage with customers referral campaigns.
Here we have an example of a referral programme TransferWise used to run, which not only rewarded customers for using its platform but also incentivised them to invite their friends to the service and bring more customers on board for the company.
To incentivise referrals, you reward your existing customers every time they bring a new customer onboard for you. You might even offer both parties some kind of a reward to increase this incentive further and the reward doesn’t even have to be that big.
Forking out £100 for a new customer that’s worth thousands to you annually is a pretty good investment.
Maximising leads & conversions at every stage of the funnel
The sales funnel we looked at earlier from AWeber might be a simplified version of what many brands are using these days, but the same principles apply. The only thing that’s really changed over the years is that the best brands pick up leads at every stage of the funnel in order to maximise leads and conversions.
There’s more focus now on lead nurturing and optimising each stage of the consumer experience to keep leads moving towards the purchase. This is the best strategy for preventing leads from slipping away and buying elsewhere.
The other key principle is that the consumer journey doesn’t end with the first purchase; this is where the customer journey begins and your efforts move to maximising further purchases and customer value.
