The Marketing Funnel

The Marketing Funnel

A user’s interaction with a company and it’s product is like a journey with milestones. Each milestone brings the user a little closer to the product. The user’s understanding or curiosity about the product increases as they reach more milestones. The Marketing Funnel enables organizations to look at users through the lens of these milestones.

What is a Conversion Funnel?

A conversion funnel is a way to visualize a user’s journey with the brand and the product. You can build a conversion funnel to better understand how the user is interacting with the product. There are a number of different conversion funnels that are common in both B2B and B2C. You can have one big funnel. Or you create micro funnels to better understand a particular stage. Some examples are:

1.Website Conversion Funnel
2.Free Trial Conversion Funnel
3.Checkout Conversion Funnel
4.Marketing Conversion Funnel
5.Sales Conversion Funnel
6.Upgrade Conversion Funnel

What is the Marketing Funnel?

A marketing funnel looks at a user journey as they become aware of the brand and start interacting with it. It visualizes this journey in a way that it becomes easy to find where the funnel is leaking and users are dropping off. There are four stages of a marketing funnel. In the next section we will go through each of them.

What are the Stages of the Marketing Funnel?

You can have as many or as little stages in a funnel. You will find the marketing funnel being created in 3 stages or a marketing funnel in 5 stages or in 7 stages. The important point here is that you are able to capture all the user’s interaction. Whether you club then in 2 or 10 stages is completely up to you. It will in most cases depend on the unique nature of your business. So let’s look at the 4 common stages of the marketing funnel. Another way to look at funnels is to divide them into top, middle and bottom half. Each half contains a grouping of stages.

Awareness

This is the first stage and right at the top. As the name suggests this is the stage at which users become aware of your existence. The awareness comes as a result of marketing activities that your team does. The activities vary depending on where users in your  industry go looking for solutions for their problems. Examples of awareness activities are:

1.Paid Ads on different media online channels- google, youtube, facebook, instagram etc.
2.Activities that bring organic traffic to your website- blogs, articles, social media shares, whitepapers etc.
3.Partnerships with other companies to advertize your product
4.Tradeshows and events where prospects go to evaluate solutions
5.Old school commercials,newspaper ads, flyers and billboards. Yes it’s true! For some companies this still forms an important part of their marketing budget

So do you start spending time and resources in all these medians? Absolutely not! That is never going to work. Run tests to see the conversion of various channels and overtime you will be able to identify the ones that work the best. Once you know which median works the best, double down on it.

Interest

At the beginning of this stage the user knows that your brand or product exists. At this stage they are curious about what your brand stands for and what your product does. For example- You have a website and the user lands on it. This act alone does not mean they are interested in you. Users landing on your site is the successful completion of the awareness stage. When the user lands on your site they can do two things:

1.Bounce off without doing anything else. This means they have shown zero interest in you. Their journey has ended at the awareness stage 😭 .
2.Users decide to browse across the different sections of your site. They spend time on different sections. At this point we can say that they are interested in what your product offers.

So how do to you nudge the user to move from being aware to being interested? The following helps:

1.A clear your value proposition
2.Messaging that expresses the value proposition clearly to users
3.User Experience that enables them to find useful information

At this stage the user has become a lead.

Consideration

The user has spent enough time researching your product and is pretty convinced that you are one of their “potential choices”. At this stage the user may:

1.Reach out to you through a lead form
2.Go over the demo of your product.
3.Signup for a free trial of your product
4.Contact your team through the “contact us” form

Generally the consideration stage is where the sales team takes over the baton.  If you are a B2B company then at this stage your sales team will start talking to the prospect. Your sales team is likely to undertake the following activities during this stage

1.Exploratory calls to find out the problem faced by the prospect and if their use case is a good fit for your product.
2.Give sales demo to the prospective customers
3.Setup demo system for the prospects and get them to try out your product

For B2C businesses it might look a little bit different. For example for an e-commerce site the following actions by a user can be considered as consideration:

1.Visit the product details page(PDP)
2.Checking out listing reviews
3.Browzing through PDP photos
4.Adding the listing to favourite
5.Adding the product to cart
6.Saving the listing for later

For your business consideration can be one or more of the examples listed above. It depends on the unique behavior of your users. The definition of these stages need to be agreed upon by the sales and marketing teams. These stages are often represented as Marketing Qualified Lead (MQL) or Sales Qualified Lead(SQL).

Conversion

This is the final stage of the marketing funnel. In the end this is the one that eventually matters. Will the user/lead/prospect signup and become a customer? Or will they choose a competitor instead 😭 . In B2B companies sometimes at this stage the product manager actively works with the sales team. Depending on the size of the opportunity your team might need to fill gaps in the product for the customers. This requires the product manager to:

1.Understand the gaps in the product
2.Calculate the size of the opportunity
3.Find the scope of the project
4.Set the relative priority of this compared to everything else that is on the team’s plate
5.Get back to the sales team with a final GO NOGO decision. This decision isn’t made by the product manager in isolation. The product manager works with the key stakeholders to come up with the decision.

How do you create a Marketing Funnel?

You need to do the following to create the marketing funnel

1.Have a clear understanding of how users interact with your brand and product. If you are not sure then start with what you think is the user flow and then modify it based on what the data tells you
2.Define each stage and make sure everyone is on the same page.Identify milestones that represent each stage.
3.Prepare a plan for activities that the team will undertake to drive the users at each stage
4.Identify metrics that you will measure to find how effective each activity is.
5.Start tracking the metrics and evaluate your marketing funnel’s performance at regular intervals
6.Find the part of the funnel which needs attention
7.Make changes to fix the issues
8.See if your changes are having the desired impact

Some of the common metrics that companies measure as part of their marketing funnel are:

1.Total website visitors
2.Cost of Acquisition
3.Organic traffic
4.Paid Traffic
5.Conversion Rate

Marketing Funnel is a great concept. But in the real world it doesn’t work linearly. For example:

1.A lead might be stuck in a particular stage for a long time. As a result tracking it over a period of time can get challenging and a bit murky.
2.There is confusion on the definition of each stage. It is important that all the key stakeholders get together and identify the milestones that represent each stage.
3.Attribution is another aspect of the marketing funnel that everyone needs to agree on. This is important because it helps you gauge the effectiveness of your marketing activities. You can look at first touch, last touch or multi touch attribution models. And find the one that works best for you.

What is a Sales Funnel?

Sales funnel visualizes how a lead travels through the sales pipeline and becomes a customer. Some stages of the sales funnel might overlap with the marketing funnel.  The lead travels from the marketing funnel to sales funnel at which point the sales team takes over the engagement. At the end of the day all teams need to work together to get more customers.

Conclusion

The goal of creating the marketing funnel is continually learning from it. As you see users go through the funnel you need to analyze the data and find where users are dropping off. Find the part of the funnel which needs the most attention. Try and optimize it. Please don’t try to optimize the entire funnel at one go.

You don’t have to limit yourself to 4 stages for the marketing funnel. If you think your business needs more stages then go ahead and further break down the funnel.


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