The marketing funnel is essentially a way of visualizing the path customers take from brand awareness to conversion. Sounds simple, but with a long history, various iterations, and plenty of healthy debate surrounding them, funnels are rarely that straightforward.
In this article, we’ll explore what a marketing funnel is and how marketers can build a strategy that serves each stage of the funnel in succession.
What is a marketing funnel?
The history of the marketing funnel
At the turn of the 20th century, agency owner and future advertising hall-of-famer, Elias St. Elmo Lewis, developed the AIDA model that mapped the stages of a customer’s relationship with a business. Those stages were as follows:
Awareness: The prospect becomes aware of their problem and potential solutions to it.
Interest: The prospect expresses interest in a particular group of products or services that solves their specific problem.
Desire or Decision: The prospect shows interest in a particular brand or product and begins to evaluate whether it meets their needs.
Action: The prospect decides whether that brand or product meets their needs. If it does, they become a customer. If it doesn’t, they continue to evaluate until they find a brand or product that does.
In 1924, William H. Townsend combined the AIDA model with the funnel concept, and the first marketing funnel was born:
At the ‘awareness’ stage, there is a mass of potential customers who have a problem and are looking for a solution. Some will make it to the ‘interest’ stage after deciding your class of product can solve their problem, while others will drop out and choose another class.
Then the prospects within the ‘interest’ stage will research the various options available to them (i.e. they’ll weigh up your product against the competitors) and fall into the ‘desire’ or ‘decision stage. From there, a number will take action and become a customer.
A strong marketing strategy will bring high-quality prospects into the funnel at a high volume, and successfully nudge a large proportion of them through each stage until they take action.
The evolution of the marketing funnel
This basic iteration of the marketing funnel has undergone drastic changes since its conception in 1924. Here are some of the more popular iterations that exist today:
ToFu, MoFu and BoFu
Where there are marketers, there are acronyms. “TOFU” (top of funnel), “MOFU” (middle of funnel) “BOFU” (bottom of funnel) are all referring to different stages of the marketing funnel:
TOFU - Awareness Stage, where your potential customers are learning about your brand and the specific problems that you solve.
MOFU - Consideration Stage where a customer has identified their problem and is looking for a solution. They may have heard of you, but need a bit of coaxing into deciding that your brand is the right fit for them. They need to be convinced.
BOFU - Decision Stage. This is where your brand needs to persuade your potential customer to move through the final step of the sales funnel and convert.
The buyer’s journey
In this three-stage model, the ‘interest’ and ‘desire’ stages from AIDA have been lumped together to form the ‘consideration stage.’ The ‘awareness’ stage remains the same (as it does in most models), and the ‘action’ stage is identical to the ‘decision’ stage in all ways except the name.
The customer experience funnel
If you examine the customer journey a little more closely, you’ll see the funnel is made up of more components than Elias St. Elmo Lewis initially proposed:
In this version, you’ll notice ‘loyalty’ and ‘advocacy’ as added stages, because modern businesses realize the importance of customer lifetime value.A positive customer experience beyond the ‘action’ stage results in not only repeat purchases, but glowing testimonials. Considering that almost 92% of B2B buyers are more likely to purchase after reading a trusted review, those two added stages are crucial to widening the top of that funnel to attract more potential customers.
That’s why more and more businesses are connecting an inverse funnel to the bottom of the traditional one.
The result of combining the traditional funnel with this upside-down ‘customer experience’ funnel is now referred to as the ‘hourglass’.
Where the sales and marketing funnel finishes, the customer support funnel commences, creating an immersive experience for your customer. Once the sale has gone through, the next stage is turning your customers into advocates, which in turn will lead generate more customers.
How to utilize the marketing funnel for your business
Like an orchestra counts on each individual musician to play their part correctly, the marketing funnel's success depends on each stage to contribute to the next. When it doesn’t, the end goal of turning prospects into customers into advocates becomes unattainable.
Here’s what you need to know to guide your customer through each stage:
The awareness stage
It’s the stage in which your prospect first becomes aware that they have a problem and starts looking for a solution.
Your prospect’s goal: To put a name to their problem and begin determining possible solutions. For example, if they’re befuddled by taxes, then maybe they’re considering hiring a CPA or purchasing do-it-yourself tax software.
Your goal: To position yourself as a worthy solution with a clear USP, and to prove your authority with educational content. That starts with generating visitors to your website and turning them into email subscribers.
The best content to offer: Blog posts, website content, webinars, guides, social media posts, email newsletters.
Key performance metrics to track: Website traffic (visits, unique visits), social reach, email subscribers, inbound links, referrals.
The consideration stage
Of all the stages in the marketing funnel, this is the one that gets morphed most from model to model. In Lewis’ AIDA, it’s divided into the ‘interest’ and ‘desire’ stages. In the hourglass version, it’s separated into the ‘like’ and ‘trust,’ stages. The reason behind the discrepancies is the space it occupies in the marketing funnel.
If the funnels above were drawn to scale, the consideration stage would be much larger than the others. It can take weeks and even months for prospects to evaluate a business’s authority and its capability to solve their problem. During this time, it’s crucial you guide them to that decision with helpful content.
Your prospect’s goal: To determine which class of products or services can solve their problem, then to begin evaluating businesses within that class. Let’s go back to the tax example, the prospect has decided to use a DIY tax software solution over hiring a CPA. Afterward, they’d start evaluating specific software, for example TurboTax or QuickBooks.
Your goal: To nurture your leads with strategic emails, blog posts, and lead magnets in order to prove your business is an authority capable of solving their problem. Since this stage is also where the marketing team hands off leads to the sales team, it’s crucial your organization has settled on a clear definition of a sales-qualified lead (SQL).
The best content to offer: Ebooks, case studies, free tools, whitepapers, webinars.
Key performance metrics to track: Email open rates, landing page conversion rates, lead source, cost per lead, lead quality.
The purchase stage
This is where a lead chooses a specific product or service to solve their problem. They arrive here only after a coordinated effort from the companies’ sales and marketing teams to educate and nurture the lead.
In early marketing funnel models, this stage concluded the marketing funnel. For modern businesses, though, the “action” or “purchase” stage is a new beginning – one that has the potential to grow the funnel exponentially by leading into the “loyalty” and “advocacy” stages.
Your lead’s goal: To decide which business and specific solution can solve their problem. For someone searching for a DIY tax software, this is when they’d not only choose which brand to purchase from, but which specific product they need. Do they need the basic version or the deluxe one?
Your goal: Here, your goal is to show leads exactly how you can solve their specific problem and help them decide which product best meets their needs. While the consideration portion of the funnel focuses on proving your authority and ability, this one focuses on solving their problem in detail. If your product is software, free trials and demos allow leads to try before they buy to ensure a solution is practical. If you’re a service-based business, this is where a one-on-one consultation can prove you’re capable of solving a client’s unique problem. If you have a physical product, this is where social proof like detailed testimonials and case studies will persuade leads to click the “buy” button.
The best content to offer: Testimonials, detailed case studies, product comparison whitepapers, demos, free trials, consultations.
Key performance metrics to track: Customers, lead-to-sale conversion rate, revenue, cost of customer acquisition.
The loyalty stage
If we were comparing this point of the customer journey to a real-life human relationship, it’d be the honeymoon stage and beyond. Your new customer is excited to have a tool to solve their problem, but after that excitement dies down, they want to know they can rely on you to help them get the most out of their purchase. If you don’t provide the support they need, they’ll abandon you for a business that can. Harsh but true.
Of all the stages in the marketing funnel, this one varies the most in size from business to business. If you can provide ongoing product education and support, your customers will remain loyal and their value to you will grow. If you can’t, this stage has the potential to be the shortest in your entire funnel.
Your customer’s goal: To experience the value of the product firsthand, continually learn new uses for it, and decide whether any of your other products are worth claiming based on their satisfaction with their purchase and your support.
Your goal: To provide ongoing customer support to boost loyalty, and in turn, customer lifetime value.
The best content to offer: Forum threads, FAQs, tutorials, blog posts, customer service content (chat, social media posts), courses and certifications.
Key performance metrics to track: Recurring revenue, customer lifetime value, active customers, churn rate.
The retention strategies marketing leaders are leveraging now
This is the stage with the most potential to grow your marketing funnel, and ironically, it’s the one least demanding of your time. The ‘advocacy’ stage is your reward for all the work you put into the stage before.
When you keep your customers happy, they’ll not only remain loyal to your business, but they’ll recommend you to friends and industry contacts facing a similar problem to the one you solved. They’ll brag about how easy life is with your product or service and how hard you work to keep them happy. The result is not only a bigger marketing funnel, but the chance to get a head-start on your competitors.
With a friend’s recommendation, your business will already be top-of-mind when they begin researching a solution to their problem. It’s in the ‘advocacy’ stage that your customers actually become your brand’s spokespeople by escorting their friends through the “awareness” stage and straight to “consideration” in your funnel.
Your goal: To grow your funnel by turning your customers into advocates.
Your customer’s goal: To help their friends overcome struggles similar to their own.
The best content to offer: Surveys, referral incentives, and loyalty discounts.
Key performance metrics to track: Net Promoter Score, referrals, reviews.
The funnel has been a fundamental part of marketing for over a hundred years for a reason. Despite the many iterations, debates, additions, subtractions, and acronyms, it remains to be one of the easiest ways to visualize the customer journey and build a marketing strategy that serves high-level business objectives. Whichever iteration of the funnel you choose to use, remember that each stage should set the next up for success.