What is a marketing funnel? Explanation of basics and application methods

For that reason, it is essential to understand the marketing funnel introduced this time . A funnel in marketing represents the stages of consumer behavior. By understanding each behavioral stage of consumers whose values ​​change, we can implement appropriate marketing according to each funnel .

This time, I will thoroughly explain the basic knowledge of the marketing funnel. There are also funnel usage methods and success stories, which can be put into practice immediately after reading this article.

Marketing Funnel

Table of Contents

What is a marketing funnel?

What is a marketing funnel?

The funnel has the meaning of “funnel”, and the shape applied to the consumer’s purchasing process is called the marketing funnel . The name comes from the shape of the funnel, which closely resembles the shape of the consumer’s purchasing process.

As shown in the diagram above, the marketing funnel starts with awareness of issues and needs, and reaches advocacy through conversion (purchase). A marketing funnel is a model designed to attract and convert prospects into customers (fans) of your company .

The marketing funnel is characterized by a taper towards the bottom, as indicated by the funnel shape. The tapered shape at the top represents the number of potential customers decreasing with each stage of the funnel .

Why You Need a Marketing Funnel

The reason why a marketing funnel is necessary in business is that you have to change your approach to each consumer’s purchasing process . There is no one-size-fits-all approach to attracting consumers because each stage of the buying process has different needs.

For example, let’s say consumers are just learning about your product. Even if you send out advertisements that only push the merits and appeal of your company’s products to consumers who are at that stage, you will not get the expected results. This is because consumers are still new to your company’s products and want to research information and compare before making a purchase decision.

As mentioned above, if there is a mismatch between consumer needs and your company’s approach at each stage of the funnel, not only will the attractiveness of the product or service not be communicated, but it may even result in disgust from the other party. yeah.

That’s why it’s important to understand the needs of consumers at each stage of the marketing funnel .

5 stages in the marketing funnel

5 stages in the marketing funnel

Each stage of the marketing funnel plays an important role in how you reach out to consumers. First, let’s understand the five stages that make up the marketing funnel.

1. Awareness (discovery of issues)

Consumers buy products and services because they want to solve a problem. The first stage, “awareness,” refers to the consumer’s own recognition of the issue .

However, consumer issues are not always clear. For example, if an urgent purchase need arises, such as replacing a broken refrigerator, the consumer can simply purchase the necessary replacement, so the problem is clear. However, when it comes to “somehow I want a new refrigerator”, the point of “why do you want a new product” remains ambiguous.

Therefore, in the latter case, it will be necessary for the company that provides the product to transmit information and make consumers aware of it . Only after consumers discover their own issues, they move to the next stage of information search/comparison.

2.Information search/comparison

Today, with the advancement of IT technology, it is not uncommon for users to use smartphones to search for information. Therefore, “information search/comparison” can be said to be a collection of information that combines all kinds of tools such as word of mouth, websites, and SNS .

At this stage, the consumer considers various options, including the company’s own products. For example, we refer to popularity rankings and reviews of online malls, read web articles with comparison lists, and visit physical stores to check the actual product.

Consumers who are in the stage of “searching for information/considering comparisons” are only “looking for the best product for themselves” and not “looking for products provided by their company.” Therefore, it is necessary to objectively compare your company’s products with those of your competitors, and provide sincere information .

3. Conversion (purchase)

Only when the needs of consumers in the 1st and 2nd stages and the characteristics of the company’s products are in good agreement, consumers will purchase the product.

But buying decisions are not easy decisions . Even if the purchase intention was high before the purchase, there is a possibility that the customer will change their mind at the conversion stage.

For example, if there are any of the following problems when purchasing, there is a risk of weakening the consumer’s purchase intention.

  • High shipping cost for the amount of product
  • It’s hard to tell where the buy button is
  • Need to travel long distances to purchase goods

Therefore, it is necessary to provide products with usability in mind so that consumers in the conversion stage can make purchases smoothly .

4. Royalties

Loyalty is a word that expresses the attachment and loyalty of consumers to companies, products, services, etc.

Consumer purchasing behavior does not end with the purchase of a product. If the purchased product or service is inferior to what the consumer originally expected, it will give the purchaser a sense of disappointment. Consumers who have been disappointed even once will never buy the product again .

Conversely, customer loyalty can be improved if the products provided meet the consumer’s wishes, or if the customer’s satisfaction is enhanced through extensive after-sales service. When it comes to marketing, the process leading up to the purchase tends to be emphasized, but customers who are satisfied with the content of the product or service are highly likely to become repeat customers, so measures at the loyalty stage are very important .

5. Advocacy

Advocacy is a word that expresses “support”, and is the act of expressing support for a company by customers who are satisfied with the content of the product or service . The meaning of the word is very similar to loyalty, but advocacy is characterized by the fact that it leads to concrete actions.

For example, customers who express support for a specific company, brand, or product not only build long-term relationships as repeaters, but also try to share their experiences with others through word of mouth, product reviews, and SNS. Instead of being a mere repeater, you could say that they became fans of your company.

Spreading information through word of mouth and reputation as described above is called “viral marketing” and is considered the best way to build relationships with customers.

Content necessary to respond to each stage

Now that you understand the five stages of the marketing funnel, it’s time to prepare the content you actually need. Here, I will explain it using a specific example so that the marketing funnel can be understood better.

1. Awareness (discovery of issues)

As mentioned earlier, consumers are not always able to clarify their issues. In the marketing funnel, first of all, we will clarify the point “why the product or service is necessary” using specific content .

For example, let’s say someone is moving to a new place and wants to buy a new refrigerator. However, I just feel that I want a new refrigerator, and I do not know whether it is necessary to replace it. Also, when buying a new one, factors such as used or new, shape, size, etc. are not clear.

So, first of all, we will emphasize the necessity of refrigerators .

Assuming that the consumer uses a web browser on their smartphone to collect information, it would be possible to prepare content such as “the optimal refrigerator size for each lifestyle” and “timing to buy a new refrigerator when moving”. At the first stage of the funnel, they are more likely to search for information using keywords such as “refrigerator size guideline” and “refrigerator replacement/moving”.

Based on this information, the first step is to determine if a replacement is really necessary.

2. Information search/comparison

The “awareness” stage only gives the consumer the necessary knowledge and does not oversell. After understanding the “necessity of a refrigerator” in the first stage, the consumer then tries to compare and consider specific products .

For example, there are cases where users search for information using keywords such as “recommended refrigerator” or “how to choose a refrigerator,” or refer to refrigerator product rankings. Therefore, in order to meet the needs of the second stage, the following content is required.

  • Articles comparing competitors’ and own products
  • Product introduction articles with unique rankings

3. Conversion (purchase)

In the second stage, once the product is fit for purpose, the consumer moves on to making a purchase decision.

However, reaching the conversion stage does not necessarily mean that you will make a purchase decision . Before that, you may check product reviews and social media reviews to confirm the reliability of the product.

Since they may visit the official website or product page to check the details of the product, it is necessary to have a mechanism that allows smooth transition from the content prepared in the second stage to the product page . If you are disseminating information through owned media or blogs, be sure to post a link to the product page.

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If you have a product that can be purchased online and have a cart on the site, it is important that the procedure can be done smoothly. In order to prevent “cart dropouts” where the purchase is stopped after adding to the cart , prepare a purchase page that is conscious of usability.

4. Royalties

When providing products such as refrigerators, it is effective to provide after-sales service at the royalty stage .

For example, users can use the product with peace of mind even if it is possible to respond by phone 24 hours a day, 365 days a year in the unlikely event of a breakdown. In addition, there are various measures to increase customer satisfaction, such as regular after-sales maintenance and nationwide repair services.

5. Advocacy

When customers are satisfied with a product or service they have used, they want to share that information with others. Therefore, in the advocacy stage, it is important to create an environment in which users can share information with various people .

For example, it would be a good idea to prepare a mechanism for easily posting reviews, such as posting a comment column where you can write a review on the product page of a refrigerator, or sending an e-mail for a questionnaire survey to customers after purchasing the product.

It is also effective to create an environment where users can post “likes” and comments by acquiring official SNS accounts of companies and brands.

Funnel type

Funnel type

So far, we’ve covered each stage of the funnel. There is no big difference in the process, but consumer behavioral psychology is changing day by day, and the marketing concept is also being updated in detail.

This time, we will introduce three types of funnels that are often used.

  • purchase funnel
  • influence funnel
  • double funnel

purchase funnel

The purchase funnel is a funnel consisting of four layers: “recognition”, “interest”, “comparison and consideration”, and “purchase”. It is the most basic marketing funnel based on the law of “AIDMA” .

AIDMA was proposed by Samuel Rowland Hall in the 1920s and is now widely used as a framework for representing the purchasing process of users. The purchasing process represented by AIDMA consists of five parts: “Attention, Interest, Desire, Memory, and Action.”

You can see that it is very similar to the marketing funnel purchasing process described at the beginning. Consumers reach the final action (purchase) through the process of attention and interest in the product.

influence funnel

The influence funnel consists of three layers: “Continuation”, “Introduction” and “Dissemination (Diffusion)”. A marketing funnel based on AISAS, which has evolved further than AIDMA .

Today’s consumers use the web and SNS to share information after purchase. Therefore, it can be said that AISAS, which adds an information sharing process, is more appropriate than AIDMA, which closes the process with purchasing activities. In fact, AISAS is a process that is conscious of web searches and word-of-mouth communication, with “Attention, Interest, Search, Action, and Share.”

The marketing funnel introduced at the beginning includes elements of loyalty and advocacy that are conscious of customer information sharing, so it can be said that the shape is closer to the influence funnel.

double funnel

A double funnel is a combination of a purchase funnel and an influence funnel . The shape of the funnel, which tapers from product awareness to purchase, is characterized by the fact that it changes to a triangular shape through information sharing and introduction of new products.

Customers who purchase products become fans, and by sharing and disseminating information themselves, they create new customers .

How to use the marketing funnel

Now let’s take a closer look at how to use the marketing funnel.

Persona design

Persona design is an integral part of building a marketing funnel.

A persona is a more targeted version of your product or service. In addition to attributes such as age and gender, by setting specific elements such as place of residence, occupation, annual income, family structure, and hobbies, it is possible to imagine a more specific customer image .

Each stage of the marketing funnel has different consumer needs. Therefore, it is important to build personas in advance and visualize needs at each stage of the funnel .

→ Download: How to Create a Buyer Persona and a Free Template

Consider customer psychology

We will examine the specific motives for purchasing, such as what kind of psychology the designed persona leads to purchase.

For example, when comparing your company’s product with a competitor’s product, consumers should feel some kind of superiority and choose one product. Therefore, when approaching prospective customers, it is necessary to present the merits and strengths of the company’s products from the consumer’s point of view .

Lead generation (creation of prospective customers)

Lead generation is the stage of attracting customers to create prospective customers . However, when it comes to attracting customers, the degree of recognition of a product varies depending on the consumer.

For consumers who have no knowledge of products at all, display advertising can be said to be the best way to stimulate latent needs. On the other hand, for search users who are actively trying to collect information, methods such as listing advertisements and web article transmission are effective.

→ Download: Free Guide to Lead Generation Basics

Lead nurturing (cultivating prospective customers)

Once you’ve created access for prospects through lead generation, it’s time to nurture those leads into purchases . This process of cultivating prospective customers is called lead nurturing .

If you make full use of web advertising for lead generation, it is common to use LP (landing page) for lead nurturing. LP appeals the merits and appeal of the product to prospective customers who accessed from the advertisement link, and leads them to the purchase button.

improvement

The marketing funnel does not end from lead nurturing to purchase. After the implementation of the measures, it is meaningful only to verify the effects and make improvements .

The concept of PDCA cycle is effective for verification and improvement of effects. Set target figures such as PV (number of page views), CTR (click-through rate), CVR (conversion rate), etc. in advance. I will continue.

Examples of marketing funnels

There are many examples of successful marketing funnels. This time, we will introduce a case study of a certain overseas company.

UK-based men’s fashion brand Charles Tyrwhitt created multiple marketing funnel videos that ultimately increased ROAS by 5x and CVR by 2.2x . rice field.

Charles Tyrwhitt’s video ads are characterized by different ways of launching for each funnel, as shown below.

  • Top funnel (awareness): Expand awareness with branding videos that appeal to your image
  • Middle Funnel (Information Retrieval): A product introduction video that thoroughly explains the benefits of the brand
  • Lower funnel (purchase): Promotional videos related to purchase decisions such as price appeal and free shipping

Speaking of video ads, it is not uncommon to introduce the benefits and features of products. However, no matter how appealing the appeal of the product is, if it does not meet the needs of consumers at each stage of the marketing funnel, high effects cannot be expected.

In that respect, Charles Tyrwhitt’s video ads are optimized for each funnel . It can be said that this is a very useful example for companies that will use the marketing funnel from now on.

Why the marketing funnel is said to be outdated

Why the marketing funnel is said to be outdated

The marketing funnel has been focused on understanding consumer behavior and psychology leading up to purchase. Today, however, some argue that the marketing funnel concept is outdated.

Here, let’s explore two factors why the marketing funnel concept is said to be outdated.

Diversification of purchasing behavior

As you can see from the shape of the marketing funnel, the traditional marketing funnel concept is very linear. In other words, it is an easy route that “a consumer who is interested in a single product searches for information about that product and purchases that product.”

However, consumer behavior, especially modern consumer behavior, is not linear as described above .

For example, if there is a consumer who wants to buy a new car, this consumer will first try to search on the web to compare new cars and collect information. However, if information such as “recommended sightseeing spots where you want to drive in a new car” appears during a search, consumer interest may be diverted and interest in travel may increase rather than new cars.

As the information gathering behavior pattern changes and purchasing behavior diversifies as described above, it is a fact that the uniform model of the marketing funnel is becoming difficult to pass.

Diversification of customer values

In the marketing funnel, we set a specific persona, anticipate needs, and promote product value that meets those needs. The persona assumed here is like one group, and the traditional marketing funnel has targeted the information and value that the group seeks.

However, in today’s world where consumer values ​​have diversified, the above method of classifying products into large groups is becoming less applicable .

For example, it is not uncommon for one group to prioritize low prices, while the other group prioritizes product performance and functionality. As a result, it is difficult to respond to each request with a marketing funnel that uniformly captures the target, and there is a need to classify target users more finely.

A new framework “Flywheel” to replace the funnel

While the marketing funnel may be outdated, it remains an important model for understanding consumer behavior and psychology. So how should we respond to diversifying consumer purchasing behavior and changes in values?

At HubSpot, we’re proposing a new model to replace the marketing funnel called the ” flywheel . “

A flywheel is a way of thinking that develops customer service and marketing in a circular manner centered on the customer, rather than in a funnel shape with purchasing as the goal.

A new framework "Flywheel" to replace the funnel

As shown in the diagram above, customers are surrounded by internal departments such as marketing, customer service, and sales. In other words, the flywheel is a model in which departments that provide value to customers join hands and work together to implement measures ranging from providing interest and building trust, to turning customers into fans.

Unlike the marketing funnel, which focuses on purchasing activities, we aim to increase LTV (customer lifetime value) by rotating the cycle around the customer, which will lead to sustainable growth for the company as a result. .

Evolve your strategy as your customers change

By using the marketing funnel, you can visualize the flow from recognition of a single consumer to purchase and post-purchase information sharing. And it’s important to have the right content for each stage.

As consumer values ​​diversify, some people are starting to see the idea of ​​marketing funnels as outdated. On the other hand, it is true that the concept of funnels is changing with the times.

The outline of the funnel introduced this time is only a basic idea. Let’s flexibly evolve our strategy according to the changing customer with the times .

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