People like to make things confusing – it’s what they do – and the same holds true when it comes to the customer funnel. In this post, we’ll clear the air by defining the customer funnel and breaking it down into its component stages, and then examine its importance to a brand’s success.
When it comes to your marketing, the most critical thing you need to understand and get right is your customer funnel. If you don’t, you’re flying blind and hoping for dumb luck when it comes to your sales. And that’s no way to do business.
What is a customer funnel?
There are different versions of the customer funnel, some with more stages than others. Since there is an overlap between the marketing and sales funnels, here at Bigfish, we prefer the term customer funnel which we feel is more all-encompassing. We find it a useful reference to help describe a complex process. Basically, the funnel is a visual representation to help people understand the method that transforms leads into customers. It succinctly illustrates the hypothetical journey that an unknown consumer takes from knowing nothing about a company to becoming one of its loyal customers.
Regardless of the funnel’s name and variance in stages, the basic concept is similar. At the top of the funnel, marketers display their advertisements to a broad range of potential customers to capture as many leads as possible. Then they nurture those leads through different stages of the purchasing decision, qualifying those who are most promising. This reduces the number of candidates in the funnel at each stage, so the funnel looks progressively narrower. As leads move down the funnel, outreach methods become more personalized until the strongest leads arrive at the bottom where they convert to customers who purchase the brand’s product or service.
Let’s take a more detailed look at the different stages that make up the customer funnel.
Naturally, the top of the funnel is its widest point where marketers begin their effort to draw in as many consumers as possible. During this initial stage, their purpose is to generate awareness and create leads, which they do through marketing campaigns and research. They use numerous methods to raise awareness and begin early-stage relationship-building. Simultaneously, they gather valuable consumer information and place potential customers into their lead management system.
- trade shows
- direct mail
- social media
- viral campaigns
- and more
The next stage involves building interest, where leads learn more useful information about the company and its products. Marketers try to develop a relationship with prospects and utilize collected data to provide more targeted communications and content.
At this stage, it’s time to reclassify remaining leads as marketing qualified leads – basically, these leads meet specific parameters (for example, they use a certain obsolete software system) that makes them desirable candidates. At this point, you want quality over quantity – having 10,000 leads sounds great unless 9,999 of them have zero interest in your product. Once qualified, marketing now considers these leads to be prospective customers who are more likely to buy; it will continue to nurture them through automated campaigns and with targeted content.
Once prospects demonstrate an active interest in buying a brand’s product, either through a trial, demo or by placing a product in an online shopping cart, the marketers will make a timely case using strong arguments on why their product is the prospect’s best choice.
At this stage, the potential buyer evaluates and compares the product to other options and makes the final decision to buy or not. Marketing and sales typically work closely together at this stage to convince the buyer that their product is the best choice and close the deal.
This is the metaphorical end zone where all the hard work pays off, and a prospect becomes a customer by buying the product or service. At this point, the sales department takes care of the transaction. But hold on – it’s not over (it should never be over). Assuming buyers have a positive experience, the company can turn them into a brand advocate and a valuable source for referrals, which feeds the top of the funnel to start the process again.
Will a customer funnel really make a difference?
Let’s look at two simplified, hypothetical examples.
Company XYZ takes a simplistic approach to marketing its software and has a large sales team making outbound calls using purchased lists. This is time-consuming, and morale and sales are low because most leads are not interested in XYZ’s products, and are also not a good customer fit.
ABC Inc. has a marketing funnel that helps its small sales team close more deals with less effort.
Its marketing department started by creating attention-grabbing content marketing pieces tied to landing pages on the company website. Potential customers can engage and learn about ABC Inc. and its services without the unwelcome pressure of a cold call.
When these prospects become interested enough in the brand’s products, they request an online demonstration by filling out the form on one of XYZ’s landing pages. These requests go directly to the sales team. Because ABC Inc.’s smaller sales team is dealing with warm leads, it closes more sales than XYZ with fewer salespeople.
How do I measure results?
Measuring how your customer funnel is performing is key in gaining insights on if your funnel is generating the intended actions from your consumers. Google Analytics makes measuring the customer funnel journey simple by setting up conversion goals. Google Analytics allows you to view your users journey from the moment they land on your site until they convert into a customer. Conversion goals and other Google Analytic tools allow you to see when and where your consumers are leaving your site. This data allows you to better cater to your audience by improving user experience and decreasing bounce rate. Using a tool like Google Analytics allows you to capture data from your consumers and use that data to create meaningful interactions throughout your site, driving your website users through the customer funnel.
All companies engaged in selling have a customer funnel whether they realize it or not. Some just happen to have one that is far more effective than their competitors.