What is the most important F-word in marketing? FUNNELS!
What are funnels in marketing and are they important for your small business?
In this blog, I explain the concept of marketing funnels and why it is important to understand how they work to boost your business.
What is a marketing funnel?
A marketing funnel describes the customer journey. Starting from the moment they first hear about your product or service, to the moment they make a purchase. Understanding how marketing funnels work will ensure your marketing approach is focused on reaching out to as many potential customers as possible and converting them into paying customers.
There are many marketing funnel models. The most well-known is based on the customer journey model called AIDA, which highlights four key steps:
- Awareness – potential customer hears about your product or service
- Interest – the potential customer begins to take notice of your product and starts to research it further
- Desire – the potential customer starts to get excited about your product and can see themselves using it
- Action – potential customer takes the plunge and buys your services.
Some have altered this to incorporate two other steps after ‘action’:
- Loyalty – where you turn single-time customers into a regular one
- Advocacy – where your customers are also the main supporters of your brand.
Another simpler model uses the TOFU-MOFU-BOFU approach. It summarises the customer journey into three main sections: Top of Funnel (TOFU), Middle of Funnel (MOFU) and Bottom of Funnel (BOFU).
A marketing funnel is a critical element of your marketing strategy
Whether you realise it or not, your business has a marketing funnel. No matter what you call it; a marketing funnel, purchase funnel or a customer journey, it is a critical element of your marketing strategy.
There are many benefits to understanding your marketing funnel, the two most important being:
- Helping set marketing objectives – understanding the ‘weakest point’ in your funnel allows you to target your resources to a specific point along the funnel.
- Coordinating a plan of marketing activities at every stage of the funnel – helps you to be consistent in your marketing and encourage your potential customers to move ‘through’ the funnel until they purchase your service.
How to create and use a marketing funnel for your business to thrive
There are many approaches to designing your marketing funnel. Here are the simplest and most basic steps to get you started.
1. Identify your ideal customers. Get to know your potential customers and understand their pain points and interests. Build a customer persona based on the insights you get. Some of the key information to include in a customer persona (also known as avatars) are demographic, interests, and personal/professional goals.
2. Understand their buying journey. Understand how they interact with your brand. What channels do they prefer? What are the barriers to purchase? What are the problems they encounter when purchasing from you?
Steps 1 and 2 can be achieved through feedback from existing customers, social media or web analytics, or research of your competitors’ customers. If you have the time, talk to your customers about their experience. If you have a physical shop, just observing customer behaviour as they buy from you will give you some great insights.
3. Determine the stages in the funnel that are critical for your business. With the information from steps 1 and 2 above, you can start creating your funnel by identifying the key steps in your customer journey and importantly what order these should be in. You might not have all the 6 steps in AIDA + Loyalty + Advocacy model, and that is ok. Your funnel should be tailored to your business. If you have two target customer groups, you might want to create two funnels, specific to each group.
4. Use your funnel. Once the funnel is developed you can apply it in your marketing planning and strategy.
- Marketing planning– start identifying the most effective marketing activities for each stage of the funnel, with the aim of taking the customer through the funnel. There are many different types of marketing activities to choose from including advertising, sales promotion, public relations, direct marketing, website, social media and events. If you want some ideas for social media content for the different stages of your funnel, watch this video by Kirsty Lawrence.
- Marketing strategy – your marketing funnel will also enable you to identify the weakest point in the customer journey, which will inform where you should focus more resources.
For example, if your brand has high awareness (does well at TOFU) but is not getting enough leads and sales (doesn’t do as well at MOFU and BOFU) it means that you need more marketing effort in the latter stages of the funnel. So, alongside the marketing activities throughout the funnel, you need a more focussed effort at the bottom of the funnel.
Your SMART marketing objectives here might be something like: to increase consideration by x% in the next 12 months (encourage customers to pay more attention to your brand and get excited about it) and increase conversion by y% in the next 12 months (encourage customers to buy your products /services).
- Measure, refine and repeat. Don’t forget to also measure the success of your marketing activities. Customer behaviour is complex. Sometimes your assumptions when building the funnel may not be spot on. That’s ok – take that as a learning and refine your funnel and marketing approach. It is good practice to review this at least annually, as you develop your annual marketing strategy.
Creating and optimising your marketing funnel can help you increase sales, save time and money on marketing efforts, and improve customer retention
With a well-developed marketing funnel, you will invest resources in the right places, at the right time and get better results.
If you need help developing your marketing funnel or identifying effective tactics for the different stages of your funnel, Mann Social can help. We have over 20 years of experience in marketing and are best placed to give marketing advice to help your business to thrive.
Or you might already have a marketing funnel in place and need help generating leads, we can help too! Through our tried and tested approach, we can develop a lead generation strategy for your business, which will get you tangible results.