The Marketing Funnel: What It Is, How It Works and How to make it for your company

Safalta Expert Published by: Manisha Negi Updated Thu, 22 Feb 2024 06:52 PM IST

Highlights

Click-through rates (CTR) for online ads typically range from 0.5% to 2%.Social media engagement rates may be around 1% to 5%.
conversion page for landing pages might be between 2% and 5%.
About 70% to 80% of consumers research a company online before making a purchase. 

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In the dynamic landscape of digital marketing, understanding and implementing an effective funnel strategy can be the key to unlocking success. The marketing funnel, a conceptual framework that maps the customer journey, plays a vital role in guiding potential customers from awareness to conversion. Let's delve into the word funnel marketing to uncover its significance and strategies for optimal results.
A marketing funnel is a multi-stage process that guides potential customers from first learning about a product to making a purchase it is the purchase cycle consumers go through from awareness to loyalty. The marketing concept has been around for over 100 years, and its purpose is to easily categorize major milestones along the shopping journey, from awareness to consideration, to decision, and then loyalty. The marketing funnel (also known as the purchase funnel or sales funnel) is based on the Awareness-Interest-Desire-Action.

Source: Safalta

A marketing funnel describes your customer’s journey with you.
Also, a marketing funnel is a strategic model that illustrates the journey a potential customer takes from initial awareness of a product or service to the ultimate conversion. Often depicted as an inverted funnel, it consists of several stages, each representing a phase in the customer's decision-making process.
Its Objective - The marketing funnel is a critical piece of the marketing process. It outlines the most straightforward journey customers might take in their path to purchase. Ultimately, the marketing funnel is a helpful framework for connecting and engaging with customers along their journey.


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Table of Content
Why are marketing funnels important
- Stages of the Funnel Marketing
- How does the Marketing funnel work
- How to create a Marketing funnel
- Full- Funnel Marketing measurement

 

Why are marketing funnels important? 

The marketing funnel is a critical piece of the marketing process. It outlines the most straightforward journey customers might take in their path to purchase. Ultimately, the marketing funnel is a helpful framework for connecting and engaging with customers along their journey. Also, marketing funnels are crucial because they guide potential customers through the buyer's journey, from awareness to conversion. They help businesses understand and optimize each stage, allowing for targeted strategies to attract, engage, and convert leads. This structured approach enhances efficiency, and customer understanding, and ultimately, improves overall marketing ROI.

Marketing funnel needed to understand customers' journey: Enables a deeper understanding of how customers move from being aware of a product or service to making the purchase. To optimize marketing efforts: Identifies strength and weaknesses in the customer acquisition process, allowing for targeted optimization of marketing strategies. Increase conversion: Provides a systematic approach to nurture leads, build trust, and increase the likelihood of conversion by delivering relevant content at each stage. Customer segmentation: Allows businesses to tailor their messaging based on where individuals are in the funnel, catering to specific needs and interests. Measure effectiveness: Enables the measurement of key performance indicators (KPIs) at the age stage, helping businesses track and assess the success of their marketing efforts. Enhance customer experience: Funnels help in creating a seamless and personalized customer experience by delivering the right information at the right time.

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The stages of the marketing funnel : 

- Awareness – When someone becomes aware of your brand, product, or service.
- Interest– When someone expresses interest in your product or service.
- Desire – When someone evaluates your product or service. This stage is also known as “Consideration.”
- Action – When someone becomes a customer. This stage is also known as “Conversion.” 
- Loyalty - when brands follow up and nurture connections with customers after purchase.


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How does the marketing funnel work?

Marketing funnels function as their name implies. They start broadly and become more narrow and focused at the end, forming the shape of a funnel. For example, a company may get thousands of views on its website, but only a percentage of those individuals may investigate the products further. Still, an even smaller percentage of those viewers become customers. Marketing funnels work by taking more direct action to steer customers through the funnel process so that they are more likely to take the company's desired action.
Let’s take a closer look at the marketing funnel stages: 

1. Awareness - The Awareness stage is when people first learn about your brand.For example, they may be searching for something on YouTube, chance upon your video, and watch it. At the top of the funnel, the primary goal is to create awareness. Businesses employ various strategies such as social media marketing, content creation, and search engine optimization, to attract potential customers. Crafting compelling content and establishing a strong online presence are key components during this stage.

2. Interest - The Interest stage is when people start to engage with your brand. For example, they may watch a few more of your videos, subscribe to your YouTube channel, check your social media posts, browse your website, and even sign up for your email list. Once awareness is generated, the focus shifts to capturing the interest of the audience. Engaging content, targeted advertising, and informative resources help to keep potential customers intrigued. This stage is about showcasing the value proposition and differentiating your brand from competitors.

3. Desire - The Desire stage (also known as Consideration) is when people evaluate your product or service. Just because they know who you are and what you do doesn’t mean you’re their final choice. They’ll evaluate alternatives, read reviews, look at customer testimonials, talk to friends and family, and compare. As prospects move further down the funnel, they enter the consideration stage. Here, businesses provide detailed information, comparisons, and case studies to aid decision-making. Email campaigns, webinars, and personalized content become powerful tools to nurture leads and build trust.

4. Action - The Action stage (also known as the Conversion stage) is when your prospective customers have decided they’re going to buy from you. They’re one step away from becoming paying customers. You’re the chosen one. They’ve added your product to the cart.

5. Loyalty - Once a company converts a lead into a customer, it's still not done with its marketing funnel. bringing back the repeat customer is one of the best things you can do for a business, as it's often cheaper than generating a new customer and to do so generate brand loyalty and focus on ensuring each customer has a positive experience even if there was a temporary issue.

NOTE - The brand goal in each stage is to 1) Attract, 2) Inform, 3)  Convert and 4) Engage Customers.


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How to create a marketing funnel?

Creating a marketing funnel involves several stages and key steps:

Define Your Goals- Clearly outline your marketing objectives and what you want to achieve with the funnel, such as lead generation, sales, or brand awareness.

Identify Your Targeted Audience- Understand your ideal customer and tailor your funnel to address their needs and preferences.
Every business has a customer journey and, therefore, a marketing funnel. So in theory, you can’t “create” a marketing funnel—you can only tweak and improve it. Practically speaking, “creating” a marketing funnel means executing marketing strategies at different stages. To make  implementing marketing campaigns easier,   many marketers further simplify the funnel into three stages:
- Top of the funnel (TOFU) – Awareness.
- Middle of the funnel (MOFU) – Interest.
- Bottom of the funnel (BOFU) – Desire and action
The tactics you can implement in each stage of the funnel:  

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1. Top of the funnel (TOFU)
The top of the funnel is the Awareness stage. Your goal is to “open up the funnel,” i.e., introduce your brand to as many relevant people as possible and attract prospects. Utilize content marketing, social media, and SEO to attract potential customers.
Some tactics to do that: Target TOFU keywords, your prospects are almost certainly searching for information related to what you sell on Google. So you’ll want your website to be visible in the search results. In the Awareness stage, you’ll want to create content targeting keywords that your target audience is likely to be searching for early in their journey.


2. Middle of the funnel (MOFU)
The middle of the funnel is the Interest stage. Your goal is to capture their interest, nurture it, and convince them you’re the right product for the job. Also provide valuable resources like e-books, webinars, or case studies to capture leads. Use email marketing to nurture these leads with relevant content.
Some tactics to do that: Target MOFU keywords, In this stage, our target customers know what SEO is. They also know they need an SEO tool. 

3. Bottom of the funnel (BOFU)
The bottom of the funnel consists of both the Desire and Action stages. Also share product demos, and customer testimonials, and offer limited-time promotions. Guide prospects toward making a purchase decision. Your goal is to convince potential customers to choose you, Get them to buy now.
Some tactics to do that: Target BOFU keywords, in this stage, people are evaluating. They’re comparing, asking friends and family, and reading reviews. So creating content for this stage means targeting comparison-type keywords.
79% of marketing leads never convert into sales due to a lack of lead nurturing.
A well-defined sales funnel can lead to a 16% higher win rate on deals.
95% of consumers click on the top four search results, emphasizing the importance of Having a well-optimized sales funnel to capture leads. 68% of companies have not identified the sales funnel.

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Full-funnel marketing measurement :  

Without measuring and analyzing, it's impossible to know the effectiveness of a brand's full-funnel marketing strategy. So it's important to determine benchmarks for success early to adequately measure the impact of each channel on a brand's key performance indicators. Full funnel marketing measurement involves tracking and analyzing metrics across the entire customer journey, from awareness to conversion. It includes assessing performance at various stages like awareness, consideration, and decision-making efforts. This often involves using a combination of tools and analytics to measure the impact of different channels and touchpoints on the customer's path to purchase. Each phase of the funnel includes its success metrics.
 
TOFU METRICS MEASURE-
 : Unique reach
 : Completion rate 
 : Click-through rate (CTR)

 MOFU METRICS MEASURE-
 : Detail page views
 : New-to-brand percentage 
 : Branded search index

 BOFU METRICS MEASURE-
 : Return on advertising spend (ROAS)
 : Advertising cost of sales ( ACOS)
 : Customer acquisition cost (CAC)
 : Conversion rate
 : Orders or units sold

Regularly reviewing and optimizing strategies based on these measurements allows marketers to refine their approach, allocate resources effectively, and maximize the overall success of the marketing funnel.

In the intricate world of marketing, the funnel serves as a roadmap for bussinesses to guide the potential customers from awareness to advocacy. By understanding each stage and implementing targeted strategies, marketers can optimie their effects, enhance customers relationships, and drive sustainable growth. The key lies in adaptability and a continous commitment to refining the funnel based on evolving marke trends and consumer behaviors. Also the funnel provides a model for you to analyze and improve marketing.Tweaking is a never-ending, but that's the fun part of funnel marketing, keep on experimenting and you will find ways to improve your results. 

 

 

How can one create awareness in the marketing funnel

Utilize social media, content marketing, SEO, and other strategies to increase visibility and attract potential customersto your brand.

What tools can assist in managing funnel marketing

CRM(customer relationship management) system, email marketing platforms, analytics tools, and marketing automation software are commonly used for effective funnel management.

How can I optimize my marketing funnel

Regularly analyze the data, test different strategies, and refine your approach.

What is the role of content in the funnel

Content plays an crucial role in educating and engaging potential customers at different stages of the funnel, building trust and guiding them towards a purchase decision.

Is funnel marketing a one-time process

No, funnel, marketing is an ongoing process that requires constant refinements and adaptation to changing market dynamics and customer behaviors.

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