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The “marketing funnel” explained

Have you stumbled across the term "marketing funnel" before and wondered what it was? Wonder no more, because here's an in-depth explanation.

June 11, 2020

Simone Engbo Hansen

12 min read

Funnel used in marketing

When I first started out as a copywriter at an advertising agency, it seemed to me there was some kind of secret code language used to describe marketing concepts. KPI (Key Performance Indicator), ROI (Return On Investment), SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), marketing funnel... Now, many years later, I still haven’t deciphered all of the cryptic slang terms, but I like to think I have a pretty good grasp of the most commonly used - which, as it so happens, are the ones I just listed. (Don’t worry if you never explore further - I rarely use any beyond these anyway, and I work in marketing.) 

In this article, I’ll dig deep into what’s called the “marketing funnel” and how it can benefit small business owners who want to understand their potential customers better. Whether you’re a marketing newbie or not, getting to know the marketing funnel is a must. 

What is the marketing funnel?

First up, a little history lesson. The first marketing funnel was developed by ad executive Elias St. Elmo Lewis in 1898 and based on the acronym AIDA, which stands for Awareness, Interest, Desire, and Action. Since then, the marketing funnel has evolved many times, but the concept remains the same: mapping out the customer journey all the way from brand awareness to conversion. 

AIDA

  • Awareness: Attract your ideal audience. 
  • Interest: Generate leads.
  • Desire: Tell them why they need you.
  • Action: Convert them into customers. 

Think of the marketing funnel as a system designed to attract and convert customers to your business. Knowing your customer’s journey can help you figure out what to do to influence them at each stage of the funnel. By evaluating your marketing funnel, you can drive sales and create brand awareness that leads to more conversions. 

The marketing funnel is shaped like a funnel because some people drop out at each stage because the decision process narrows as you get closer to conversion. 

While the 1898 version AIDA isn’t exactly what we go for today, the concept of the funnel has remained pretty much the same. There’s a top part focused on creating awareness, then the tricky middle part focused on convincing, and at last the bottom part that’s focused on some kind of conversion. Those three parts are defined as “ToFu-MoFu-BoFu” (more acronyms, I know). 

ToFu, MoFu, BoFu

  • ToFu/top of the funnel: What you do to generate awareness. 
  • MoFu/middle of the funnel: What you do to generate leads. 
  • BoFu/bottom of the funnel: What you do to generate customers. 

Some argue that these parts of the funnel are the only important ones to focus on; attracting leads, positioning your solution as the best, and finally converting the leads that have held on.

Here, the final step is conversion, which could be a purchase, but I’d like to make the point that it should go beyond that and into a nurturing phase. After all, isn’t it better to have returning customers that remain loyal to your brand rather than a one-time purchase? I think so. Take a look at these five stages in my preferred version of the marketing funnel with the stages Awareness, Interest, Conversion, Loyalty, and Advocacy.  

The five stages of the marketing funnel

Awareness

In the awareness stage of the funnel, people are still strangers to your product or services. They get to know about your company because they’re looking for a solution - and you fall into the same category. 

People can hear about you from a number of sources; blog posts, articles, podcasts, Facebook or Google Ads, organic searches, word-of-mouth, etc. Whatever the medium, they now know you exist as a possible solution to their problem. If their problem is frustrating enough, they might become your clients immediately, but chances are next to nothing. 

What to do

Present your brand across multiple marketing channels - as many as possible - to reach as broad an audience as you can. Talk about your solution and why yours is better than others. Where do your customers hang out online and what do they search for? Find out and target your marketing efforts to reach a broad audience. After that, you can start collecting data on your audience to use in the next stages of the funnel. 

In the awareness stage, setting up campaigns with Google Ads and Facebook Ads can be a big help. Both can yield great results fast at a low cost, which is key for a small business owner.

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Interest 

Congratulations! Your marketing and content efforts in the previous stage have proved successful in captivating the right audience. Your audience likes your content and wants more. Here we enter the second phase of the funnel; interest or consideration. After their preliminary, broad searches, they’re ready to find the specific solution to their problem, which if all goes well should be your product.

What to do

Once you’ve piqued their interest, it’s time to nudge your audience into exploring your brand further. You can do so by making sure you show up in the specific search queries so they can find your content, by adding elements of social proof that compare you to competitors, talking about the value you add to your customers’ lives, etc. In short, show your strengths and prove why you’re the better choice. 

You need to convince your audience that your solution is the best option out of the selection of choices their more refined searches have presented them with. Get them to follow you on social media, sign up for your newsletter, or subscribe to your blog. Because the data from your audience has narrowed significantly, targeting the ones that are likely to make a purchase becomes a lot easier.

Conversion

In the conversion stage, your customers are almost ready to make their first purchase. Since you’ve collected a lot of data on them in the previous stages, you know what makes them tick - and thus what kind of language should be used to sway their minds. 

What to do

Emphasize why your product is exactly what they need. You can do so by using testimonials, customer reviews, and case studies. Got a money-saving service? Show them the numbers. Got a limited product? Tell them to not waste any more time. Setting up a live chat for those final questions they might have could also help you convert. 

Loyalty 

As I mentioned earlier, the conversion stage of the funnel shouldn’t be regarded as the last. Otherwise, you’d be dealing with single-purchase customers all the time, which probably isn’t the most productive way for you to do business. 

Instead, focus on customer retention or customer loyalty. Loyalty is when customers come back to make another purchase, follow your brand on social media, subscribe to your blog or newsletter, etc. So what can you do to create that kind of loyalty?

Loyalty is when customers come back to make another purchase

What to do

Make sure the content you put out is tailored to this audience, which has now already been established as customers. They differ vastly from those in the first stages of the funnel who were served high-level, generalized content. Customers coming back for more also want more. Think special promotions, events, or surveys that make their lives easier and your business even more attractive.

If your customers are happy with what you do for them at this stage, they hopefully advance into the last step of the funnel:

Advocacy

At the last stage of the funnel, your audience goes from customers to fans. They like your business enough to spread the word. In other words, they restart the funnel and create further awareness - without you having to do the work. 

Just bear in mind that you can’t achieve this level of loyalty without having an absolutely stellar brand or product. 

What to do

You want the customer to write reviews, post on social media, make recommendations online, and in-person. Ask your customers to spread the word about your services. You could even nudge them with great referral programs with credits or discounts. Oh, and keep delivering value to your customers. That last part is the most important for you if you ever want to be in the hopes of getting to the advocacy stage of the marketing funnel.

Earned advocacy is what I just described; your customers recognize and recommend you. It’s not to be confused with paid advocacy, which could come from influencers endorsing your product for a fee. In general, always aim for earned advocacy. It’s the truest and highest form of endorsement you can get.

Summary

The marketing funnel is an easy concept to understand and adapt to, but more importantly it’s a useful tool when it comes to understanding the consumer’s buying process. If you do well with your marketing funnel, it becomes a circular motion. Awareness brings leads in, leads explore your content further, leads make a conversion, you connect to the leads, and the leads will then become loyal fans who refer their friends through awareness all over again.

Setting up your own marketing funnel isn’t just about driving traffic to your site. It’s about driving the right kind of traffic to your site. The best advice I can give you: Focus on keeping your customers happy rather than just acquiring them. 

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