- Funnel marketing is an approach that markets to consumers from their first interaction with a brand until they become a paid customer and beyond.
- Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
- Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
|Funnel Marketing||Funnel Marketing, also known as a sales funnel, is a marketing strategy that represents the customer journey from initial awareness to final purchase. It’s visualized as a funnel because it narrows down as potential customers progress through stages.|
|Stages||A typical funnel includes several stages: Awareness, Interest, Consideration, Intent, and Purchase (often referred to as AIDA). These stages represent how potential customers become aware of a product or service and eventually make a purchase.|
|Awareness||The Awareness stage is at the top of the funnel. It’s about creating brand visibility and making potential customers aware of your products or services. Marketing efforts here include advertising, content marketing, and social media exposure.|
|Interest||In the Interest stage, potential customers express curiosity in your offerings. They might engage with content, sign up for newsletters, or follow your social media accounts. The goal is to keep their attention and move them further down the funnel.|
|Consideration||During the Consideration stage, potential customers actively evaluate your offerings. They might compare your products/services with competitors, read reviews, and seek additional information. Content like product guides or case studies can be useful here.|
|Intent||The Intent stage signifies that potential customers are seriously considering a purchase. They might add items to a shopping cart, request price quotes, or sign up for trials. At this point, personalized offers and assistance can help close the deal.|
|Purchase||The final stage, Purchase, is when potential customers become paying customers. They complete transactions, buy products or services, and become part of your customer base. Successful funnel marketing results in conversions at this stage.|
|Post-Purchase||Funnel marketing doesn’t end at the purchase stage. It extends to post-purchase activities, such as providing excellent customer service, requesting reviews, and encouraging repeat business. Satisfied customers can become advocates and refer others.|
|Metrics||Funnel marketing relies on key performance indicators (KPIs) to measure effectiveness. These may include conversion rates (the percentage of people moving from one stage to the next), customer acquisition cost, and customer lifetime value.|
|Tools||Various marketing tools and technologies support funnel marketing, including customer relationship management (CRM) software, email marketing platforms, analytics tools, and marketing automation software for personalized communication.|
|Benefits||Funnel marketing helps businesses efficiently guide potential customers through the buying process, increasing the likelihood of conversions. It also allows for data-driven decision-making and optimization of marketing efforts at each stage.|
|Challenges||Challenges in funnel marketing include understanding customer behavior, creating compelling content, and optimizing the funnel for higher conversions. Additionally, competition and changing market dynamics can affect funnel performance.|
|Examples||Examples of funnel marketing can be seen in various industries. For instance, an e-commerce company might use targeted ads and email campaigns to move users from awareness to purchase. A B2B software provider might offer whitepapers and demos to nurture leads.|
What is funnel marketing?
Funnel marketing is an approach that markets to consumers from their first interaction with a brand until they become a paid customer and beyond.
At its core, funnel marketing encompasses a customer’s journey with a brand.
The approach, of course, is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. When used correctly, a brand can attract, engage, and convert prospects to drive sales, loyalty, brand awareness, and repeat purchases.
The notion that a customer progressed through various stages with a business was first proposed by Elias St. Elmo Lewis in 1898. Lewis’s model mapped a metaphorical journey from the minute a customer interacts with a brand to the point of action or purchase. However, it would be another 26 years before author William W. Townsend would associate Lewis’s interpretation with the notion of a funnel.
While Lewin’s model featured the four steps of awareness, interest, desire, and action (AIDA), many businesses today use a simplified but more relevant three-stage version. We will explain this in more detail in the next section.
Three-stage funnel marketing
In a theoretical sense, the marketing funnel is linear. Prospects start their journey at the top of the funnel and end it at the bottom where a conversion is made. In practice, however, most prospects move in and out of the funnel at will before they convert. Some others will make it to the bottom without converting and drop off the radar completely.
Let’s now look at the three stages of funnel marketing.
1 – Top of the funnel (TOFU)
At the top of the funnel, prospects become aware of a brand and interact with it for the first time. Since most will not know much about a product or service, this initial stage should focus on marketing that increases brand awareness.
Here are some ways a marketing team can attract prospects:
- Share the company’s USP on social media.
- Run targeted, paid ads in podcasts or on social media, and
- Build a landing page that introduces the brand, product, or service.
2 – Middle of the funnel (MOFU)
A prospect reaches the MOFU only after they’ve made a meaningful interaction with a brand. What constitutes a meaningful interaction is open for discussion, but it may be that the consumer has subscribed to an email list or is following the brand on social media.
The second stage must focus on building trust with the prospect via further engagement. In other words:
- Invite the prospect to participate in a survey. This can be a good way to perform conversion rate optimization (CRO) and identify the drivers, barriers, and hooks individual encounters with a brand.
- Explain how a product or service solves a customer problem and adds value. Increasingly, brands are turning to white papers for this purpose.
- Share product comparisons, demonstrations, or relevant case studies.
3 – Bottom of the funnel (BOFU)
The BOFU is the last place a prospect visits before a conversion takes place. At this point, the business has done the hard work of attracting the attention of a prospect, building a relationship with them, and earning their trust.
The focus here is to convert the prospect. This can be done in the following ways:
- Offer a free trial or demonstration of the product or service.
- Write a guide for prospects who hold last-minute doubts, concerns, or any other factor that could hinder a conversion.
- Demonstrate social proof in the form of testimonies and reviews, and
- Segment the email list according to specific actions. For example, a unique email sequence could be sent to a prospect who abandons their cart.
Top of the Funnel (TOFU):
- Social Media Advertising: Brands create awareness by running targeted ads on platforms like Facebook and Instagram, introducing their products or services to a wide audience.
- Content Marketing: Blog posts, infographics, and videos are used to provide valuable information to potential customers and generate interest in the brand.
- Email Subscription Pop-ups: Websites use pop-ups to encourage visitors to subscribe to their newsletters, capturing leads and building a connection.
- Webinars and Workshops: Hosting online events or workshops on topics related to the industry helps brands showcase their expertise and attract prospects.
Middle of the Funnel (MOFU):
- Email Drip Campaigns: Brands send a series of targeted emails to engage and nurture leads, providing more detailed information and building trust.
- Ebooks and Whitepapers: In-depth resources are offered in exchange for contact information, providing value and showcasing the brand’s knowledge.
- Webinar Follow-ups: After a webinar, brands send follow-up emails with additional resources and personalized content to keep prospects engaged.
- Lead Scoring: Automation tools score leads based on their engagement level, helping sales teams prioritize high-value prospects.
Bottom of the Funnel (BOFU):
- Free Trials: Software companies offer free trials of their products, allowing prospects to experience the value before making a purchase.
- Abandoned Cart Emails: E-commerce sites send reminders and incentives to users who abandon their shopping carts, encouraging them to complete the purchase.
- Customer Testimonials: Brands showcase reviews, testimonials, and case studies to demonstrate the benefits of their products or services.
- Limited-Time Offers: Urgency is created by offering time-sensitive discounts or promotions to incentivize prospects to take action.
Key Highlights of Funnel Marketing:
- Definition: Funnel marketing is an approach that targets consumers throughout their entire journey with a brand, from their initial interaction to becoming paying customers and beyond.
- Origin of the Marketing Funnel: The concept of a marketing funnel was first introduced by Elias St. Elmo Lewis in 1898, conceptualizing the customer’s journey from awareness to action.
- Three-Stage Funnel: Funnel marketing typically considers three stages of a non-linear marketing funnel:
- Top of the Funnel (TOFU): Prospects become aware of the brand for the first time. Focus is on increasing brand awareness.
- Middle of the Funnel (MOFU): Prospects have meaningful interactions with the brand, such as subscribing to emails or following on social media. Building trust and engagement is the goal.
- Bottom of the Funnel (BOFU): The final stage where prospects are ready to convert. The focus shifts to conversion strategies.
- AIDA Model: AIDA stands for Attention, Interest, Desire, and Action. It is a widely used marketing model that describes the customer’s journey and helps organizations optimize their marketing activities based on these stages.
- Conversion Strategies at Each Stage:
- TOFU: Increase brand awareness through social media, paid ads, and informative landing pages.
- MOFU: Build trust through surveys, explaining value propositions, sharing product comparisons, and case studies.
- BOFU: Convert prospects with free trials, demonstrations, guides, social proof, and segmented email campaigns.
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