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.
Aspect
Explanation
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.
Table of Contents
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.
AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys.
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.
Case Studies
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.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
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.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
