Purchase funnel (original) (raw)

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Model of theoretical customer journey toward purchase of a good or service

An example of a typical purchase funnel

The purchase funnel, or purchasing funnel, is a consumer-focused marketing model that illustrates the theoretical customer journey toward the purchase of a good or service.

This staged process is summarized below:

Awareness – When a prospective customer becomes aware that a seller offers a product, solution, or service that will meet their needs, they are in the awareness stage. This can happen through advertising, word of mouth, prospect research, or any of several other channels. After becoming aware, the prospect will begin to consider how they can find an appropriate solution to their problem.
Interest – When a prospect expresses interest in a service, they go through an evaluation process in which they seek more information, compare the offerings of various competitors, and become more educated about the factors surrounding the offering. At this level, a seller must provide the prospect with a compelling argument for the effectiveness of their product.
Desire – Getting a prospect to make a decision boils down to giving them all the information they need, answering any questions that are holding them back from taking action, assuaging any fears they may have, and convincing them that the action they’re about to take will result in satisfaction. This is the level at which the seller must demonstrate his authority and prove to them that its the best option.
Action – The final stage of the sales funnel is action. This is the point at which the prospective customer completes the process by becoming an active customer. It is possible to convert a one-time customer into a repeat customer as an additional stage to the action component. By giving the customer exactly what they want and more, you can keep them coming back and possibly raise awareness, attracting new prospects into the sales funnel.

The purchase funnel is also often referred to as the "customer funnel", "marketing funnel",[1] "sales funnel", or "conversion funnel". The association of the funnel model with the AIDA concept was first proposed in Bond Salesmanship by William W. Townsend in 1924.[2]

This early model has been modified by marketing consultants and academics to cater to the modern customer and is now referred to in marketing as the "purchase funnel" or "buying funnel". Many different business-to-consumer purchase models exist in marketing today, but it is generally accepted that the modern business-to-business purchase funnel has more stages, considers repurchase intent, and takes into account new technologies and changes in consumer purchase behavior.[3][4] As a model, the buying funnel has been validated in a variety of domains, including searching,[5] keyword advertising,[6] and lead generation,[7] but also modified to include previously unconsidered steps and metrics such as outbound sales and internet impressions.

The purchase funnel concept is used in marketing to guide promotional campaigns targeting different stages of the customer journey and as a basis for customer relationship management (CRM) programs and lead management campaigns.

Similar to a purchase funnel, "conversion funnel" is a technical term used in e-commerce operations to describe the track a consumer takes through an Internet advertising or search system, navigating an e-commerce website and finally converting to a sale.

The main elements of an online purchase/sales funnel are:

Traffic sources (i.e. SEO, PPC, referral traffic, etc.)
Top of the funnel (TOFU) which coincides with the traditional awareness stage
Middle of the funnel (MOFU) describing prospects in the consideration stage
Bottom of the funnel (BOFU) corresponding to latter life-cycle stages (i.e. decision, conversion, purchase)
Re-engagement paths – strategies and techniques meant to recover lost prospects/leads, usually through retargeting ads or email marketing

The modern conversion funnel can have many entrance points, meaning people can enter at any stage of their life-cycle, they can leave and enter again. This is why an effective online marketing strategy requires an omnichannel approach that combines various traffic sources, campaigns and re-engagement paths, and makes them work as one to finalize the purchase and even lead to loyal customers or brand advocates.

Within the broader context of the purchase funnel, the marketing funnel serves as a foundational framework. It systematically depicts the customer journey from initial awareness of a brand or product to the final purchase. It is used by businesses to understand consumer behavior and adapt marketing strategies at each stage of the customer's decision-making process. By segmenting the customer journey into distinct phases (often categorized as awareness, consideration, and conversion), businesses can implement targeted tactics to guide potential customers through the funnel and increase the efficiency of their marketing efforts.[8]

The origins of funnel marketing can be traced back to the late 19th century with the development of the AIDA model (Awareness, Interest, Desire, Action) by Elias St. Elmo Lewis.[9] This model provided a foundational framework for understanding how consumers progress through various stages before making a purchase. Over time, the model evolved to include additional stages and emphasize long-term customer relationships.[10] The integration of digital technologies further transformed the funnel by incorporating online channels and enabling data-driven optimization. Notable contributors to this evolution include E.K. Strong, who explored the psychology of selling, and William H. Townsend, who integrated the AIDA model with the funnel concept in 1924.[11]

Typically, marketing funnel strategies include the following five macro-stages:[12]

Awareness Phase (Exploration/Lead Generation): Potential customers identify their needs or issues and begin exploring solutions. The marketing objective is to generate leads by attracting individuals and obtaining their contact information to initiate a relationship.
Consideration Phase (Lead Nurturing): Prospects who have shown initial interest evaluate specific products or services, comparing features and benefits. Marketing efforts shift to nurturing these leads by providing targeted information that deepens the relationship and helps prospects make informed decisions.
Purchase Phase (Decision Making/Conversion): At this stage, potential customers are prepared to make a purchase decision. Marketing strategies focus on facilitating this conversion through clear calls-to-action, streamlined purchasing processes, and promotions such as limited-time offers.
Loyalty Phase (Retention/Fidelization): Post-purchase, the focus shifts to retaining customers and building loyalty. This is achieved through ongoing engagement via personalized communication, loyalty programs, and excellent customer service.
Recommendation Phase (Advocacy): Satisfied customers are encouraged to advocate for the product or service. The marketing goal is to reinforce relationships with these advocates, motivating them to promote the brand further, thereby fostering a cycle of loyalty and new lead generation.

Businesses may adapt their funnel strategies to suit specific markets and customer bases, ensuring each phase addresses the needs and behaviors of potential customers.

Subsets within the marketing funnel

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Marketing funnel encompasses several strategic approaches designed to engage customers at different stages of the buying and fidelization process. Each subset within the marketing funnel has specific objectives and targets particular interactions with customers, from initial contact to post-purchase follow-up. Common full funnel marketing subsets include:

Sales Funnel or Purchase Funnel: The sales or purchase funnel (sales from the seller's perspective and purchase from the buyer's perspective) guides potential customers through stages of awareness, interest, desire, and action, culminating in a purchase decision. It is a subset of full funnel marketing, centered specifically on the conversion process.
Lead Generation Funnel: Aimed at capturing the contact information of potential customers and converting them into qualified leads, this funnel often employs incentives like free e-books or webinars. Follow-up typically involves targeted communication aimed at building relationships and advancing prospects through the funnel.[13]
Product Launch Funnel: Created to build excitement and anticipation for a new product or service, this funnel uses pre-launch marketing tactics such as videos, webinars, and email campaigns to engage potential customers before the product's official release.[13]
Webinar Funnel: This type uses webinars, either live or recorded, to provide value and educate potential customers about a product or service. It often includes promotional efforts to drive attendance and may incorporate calls to action during or after the webinar.[13]
Tripwire Funnel: This strategy begins with a low-cost offer to attract initial purchases, followed by additional selling strategies such as upsells or downsells to increase the overall value obtained from each customer.[13]
Membership Funnel: Focuses on generating recurring revenue by offering exclusive content or services to subscribers. This funnel uses tools like landing pages, email campaigns, and membership portals to engage and retain members.[13]
Survey Funnel: This approach collects information about potential customers' preferences and pain points through surveys, using the data gathered to customize marketing strategies and offers that meet their specific needs.[13]

These funnel types are part of a marketing strategy, each tailored to facilitate different goals throughout the customer lifecycle. While terms like "full funnel marketing," "sales funnel," and "purchase funnel" are sometimes used interchangeably, they each serve distinct purposes within a broader marketing framework.

Examples of full funnel marketing

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Full funnel marketing can be demonstrated through various real-world applications by companies aiming to guide customers.

Content streaming services provide a clear example of this marketing strategy. These companies typically use platforms that are easy to navigate and feature regularly updated content to attract initial user interest, often through free trial offers. Once users are engaged, the services encourage exploration of various subscription models and collect contact information for ongoing marketing efforts, with the goal of converting free trials into paid subscriptions.[14]

Another sector that employs full funnel marketing is marketing and sales software. Companies in this industry often offer resources such as e-books, webinars, and templates to obtain contact details from potential leads. These materials are designed to educate potential customers, thereby nurturing leads and establishing the company as a credible authority in its field. This approach aims to increase the likelihood of converting leads into paying customers.[15]

In the non-digital realm, athletic apparel companies utilize full funnel marketing by launching comprehensive marketing campaigns that might include television commercials, social media, and event sponsorships. These campaigns typically use engaging slogans and collaborations with well-known athletes and influencers to inspire potential customers. The narrative often focuses on personal achievement and overcoming challenges, which aligns with the promotion of the products as essential tools for personal fitness goals. To drive purchases, these companies might introduce limited-edition products or exclusive collaborations, aiming to move customers through the marketing funnel from awareness to action.[16]

Criticisms and controversies

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The marketing funnel model has faced increasing criticism for its traditional approach. The criticism to the model's relevance in the digital age, where consumer behavior has evolved significantly. The rise of digital and social media platforms has altered how consumers interact with brands, often entering the purchasing process at various stages and sometimes moving non-linearly or even reversing their engagement paths. Furthermore, the traditional funnel model has been criticized for its limited focus on post-sale customer experience, which can hinder the development of brand loyalty and advocacy.[17]

In response to these criticisms, several alternative models have been proposed to better align with contemporary consumer behavior:

Customer Decision Journey (CDJ): This model reflects the non-linear and iterative nature of consumer interactions. It recognizes that customers engage with brands through multiple touchpoints over time, influencing their purchasing decisions through a series of interactions and feedback loops.[3]
Flywheel Model: This approach emphasizes the momentum created by satisfied customers who become advocates for the brand. It highlights the importance of continuous customer satisfaction as a means to drive business growth, focusing on delivering consistent, exceptional customer experiences.[18]
Bow Tie Funnel: An adaptation of the traditional funnel, the Bow Tie Funnel acknowledges the dynamic and non-linear interactions of customers with brands. It integrates multiple touchpoints and feedback mechanisms, allowing businesses to adjust their strategies based on real-time customer feedback, thereby enhancing customer engagement and loyalty.[19]

The marketing funnel is expected to evolve with advancements in technology, artificial intelligence (AI) and machine learning, which are poised to enhance the personalization and efficiency of marketing strategies.[20] Additionally, the rise of voice technology indicates a shift towards more voice-activated web searches, which could influence the dynamics of content marketing and storytelling towards greater authenticity and personalization.[21]

^ "MARKETING FUNNEL ULTIMATE GUIDE". Adspace Agency. Retrieved 2023-12-14.
^ "The salesman should visualize his whole problem of developing the sales steps as the forcing by compression of a broad and general concept of facts through a funnel which produces the specific and favorable consideration of one fact. The process is continually from the general to the specific, and the visualizing of the funnel has helped many salesmen to lead a customer from Attention to Interest, and beyond" (p. 109).
^ a b Court, D. Elzinga, D., Mulder, S. and Vetvik, O.J., "The Consumer Decision Journey", McKinsey Quarterly, June 2009, Online: http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey
^ Branding In The Digital Age - You're Spending Your Money in All the Wrong Places
^ Kules, Bill. "Speaking the same language about exploratory information seeking." Information Seeking Support Systems 13.5 (2008): 17.
^ Jansen, B. J. and Schuster, S. (2011) Bidding on the Buying Funnel for Sponsored Search Campaigns. Journal of Electronic Commerce Research. 12(1), 1–18.
^ Wilcox, G., & Sussman, K. (2014). Lead-generating social media strategies using the social media performance model: The B2B connection. Journal of Digital & Social Media Marketing, 2(1), 70–78.
^ Kotler, Philip; Keller, Kevin Lane (2015). Marketing management (15th ed.). Boston Munich: Pearson. ISBN 978-0-13-385646-0.
^ "How to Use AIDA Model in Business". Small Business. Retrieved 2024-07-18.
^ "What Is the Marketing Funnel, and How Does It Work?". CareerFoundry. 2022-07-05. Retrieved 2024-07-18.
^ "Every Stage of the Marketing Funnel Explained | Ortto". Ortto. Retrieved 2024-07-18.
^ "What is a Marketing Funnel & How to Build One | Marketing Analytics". DiscoverDataScience.org. Retrieved 2024-07-18.
^ a b c d e f "22 Types of Sales Funnels that Turn Visitors into Customers". Digital Main Street. 2019-07-17. Retrieved 2024-07-18.
^ "Unlocking Success: Real-World Marketing Funnel Examples & Strategies". Metranomic. 2019-08-17. Retrieved 2024-07-18.
^ A tool for digital communication implementation in the marketing
^ "Nike Marketing Strategy: Unveiling Consumer Marketing Success Tactics". BrandCredential. Retrieved 2024-07-18.
^ Bonchek, Mark; France, Cara (2014-05-07). "Marketing Can No Longer Rely on the Funnel". Harvard Business Review. ISSN 0017-8012. Retrieved 2024-07-18.
^ Halligan, Brian (2018-11-20). "Replacing the Sales Funnel with the Sales Flywheel". Harvard Business Review. ISSN 0017-8012. Retrieved 2024-07-18.
^ "The Bowtie Funnel: Understanding the Customer Journey". blog.revpartners.io. Retrieved 2024-07-18.
^ Marketing Trends: AI is Here to Stay, But Can Marketers Get it Right?
^ Voice technology could soon be your new best friend. Here's why".

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