What is the Marketing Funnel and Why is it Important?

At any given time, only 1% of your audience is ready to buy. It’s therefore critical that you have marketing activity that resonates with the other 99% who are not yet ready to buy. Maybe they’re researching, or they’ve just made a similar purchase. Whatever the case, only including lead generation activity that talks to customers who are ready to buy will limit your marketing efforts. An effective marketing strategy includes tailored strategies at each stage of the marketing funnel (awareness, consideration, conversion, and retention) - that will help you attract customers, convert them, and then retain them.

Understanding the Marketing Funnel

The marketing funnel is a theoretical model that represents the journey customers take from initial awareness of your brand to becoming loyal advocates. It consists of four key stages:

The Awareness Stage

Potential customers become aware of your brand, products, or services. The goal is to attract attention and generate interest. You would have likely heard this referred to as brand awareness. It’s any kind of activity that gets eyes on your brand. It will not be likely to convert customers, or generate sales. It is possible, but may be difficult to measure the direct ROI on awareness focused activity, so it is often left out of marketing plans; however, it is just as important to include awareness focussed activity in your plan as conversion - if your customers are not aware of you, how will they ever buy from you?

Some examples of awareness based activity include:

• Content Marketing: Create valuable and relevant content such as blog posts, videos, and infographics that address the needs and interests of your target audience.

• Social Media Marketing: Use social media platforms to reach a broader audience. You don’t need to be on every platform, focus on the ones your audience uses. Share engaging content, run ads, and participate in conversations to increase visibility. While Facebook, Instagram, Tik Tok and YouTube are the largest networks, are there networks your audience is using that you could also capitalise on - Pinterest, SnapChat, LinkedIn, Threads are just a few examples.

• Search Engine Optimisation (SEO): Optimise your website and content for search engines to improve organic search rankings and attract visitors searching for related topics. There are some technical components to SEO on the backend of your website that you may need assistance with, if you’re not too familiar with SEO, or websites. It can be helpful to reach out to a marketer or agency with experience in SEO to assist you.

• Paid Advertising: Utilise pay-per-click (PPC) ads, display ads, and social media ads to reach potential customers who may not yet be aware of your brand. Don’t expect these ads to deliver a strong conversion rate, remember, the goal is awareness, so measure these ads based on impressions and clicks. 

• Public Relations (PR): Leverage media coverage, press releases, and influencer partnerships to generate buzz and enhance your brand’s credibility. This sounds a bit overwhelming, but it doesn’t need to be; for media coverage, if you have a story to tell (have a look at the newspaper stories for inspiration), reach out to your local community newspaper and ask to speak to a journalist. You may not need to write a press release to gain coverage if they feel your story is worth sharing. 

As the top of the funnel activity, this will feed all of your future conversions, so the most amount of budget will be required here; consider investing 60-80% of your allocated marketing budget on prospecting (generating awareness).

The Consideration Stage

In this stage, prospective customers evaluate your offerings and compare them to competitors. The focus is on providing information and building trust. This stage, also sometimes known as the research stage, may happen quickly (for example in a supermarket when a shopper is choosing between products on the shelf), or take longer, (for example, a buyer searching for a new car), so you need to consider the length of time your prospective buyers may be taking before purchasing from you and factor this in to your marketing plan. 

Some examples of consideration based activity could include:

Email Marketing: Use targeted email campaigns to provide valuable information, share case studies, and highlight benefits. Segment your audience for more personalised messaging. If you haven’t got a CRM (Customer Relationship Management) software, now is the time to get one! There are many options for this, but it comes down to the features you need and the budget you have. Do some research to compare the different platforms and take advantage of the free demos or free trials - you want to make sure you’re comfortable using your chosen platform, as it can be a bit of a pain to switch later on (although definitely possible). If you’re not sure, or you need help implementing a CRM, reach out to a marketing consultant for some advice and help.

The next common roadblock to using email marketing is ‘But, I don’t have any email addresses’. Firstly, start asking each and every one of your customers for their email address! You can also use your advertising to collect email addresses - asking customers to fill in forms if they are interested in your product or service, or asking them to fill in a form to download a piece of content will allow you to market to them via email. You likely won’t have thousands of email addresses to begin with, but by implementing strategies to collect emails, you will start building a quality list of people who are interested in your business. 

Retargeting Ads: Use retargeting campaigns to remind visitors of your products or services after they’ve left your website, encouraging them to return and engage further. To achieve this, you’ll need to have a Meta pixel installed on your website for Meta ads, and a Google tag for Google ads. This allows both platforms to collect data about your website visitors so that you can retarget them with your ads. Retargeting ads typically deliver cheaper clicks, because the audience is a bit ‘warmer’, so this will allow your ad budget to go a little further. 

Webinars and Demos: Host webinars, live demos, or free trials to showcase your product or service and address any questions or concerns prospects may have. This could be in-person, at a trade show / expo, or online. Give yourself plenty of time to promote your webinar and ensure there is a promotion plan to ensure you get enough registrations to make it worthwhile. If you don’t get many registrations, that’s ok, you can always record your content and use it as part of your ongoing content strategy.

Detailed Content: Provide in-depth content such as whitepapers, eBooks, and comparison guides that help prospects make informed decisions. You can utilise an AI tool like chatGPT to write a structure for you, but make sure you edit the content so that it aligns with your brand’s language guidelines and sounds more like it’s been written by you! Also, fact check, as AI tools have been known to make up facts.

Social Proof: Highlight customer testimonials, reviews, and case studies to build trust and credibility with potential customers. You can do this on your website, on social media, via email, or via any other promotional method you choose (is there a case study you could write about a customer who has benefited from your service / product that could be a blog post, or even better, a PR story?).

The Conversion Stage

Prospects decide to make a purchase or take a desired action. This is the sale! The aim of your marketing is to make this step as easy as possible for your customers. 

Examples may include:

Clear Calls-to-Action (CTAs): Ensure your website and marketing materials have clear and compelling CTAs that guide prospects toward making a purchase or contacting your sales team.

Simplified Checkout Process: Streamline the checkout process on your website to reduce friction and make it easy for customers to complete their purchase.

Limited-Time Offers: Create a sense of urgency with limited-time discounts, promotions, or exclusive offers to encourage immediate action. Ever seen a ‘10% off for new customers’ pop-up on a product website? That’s a great example of marketing aimed at converting customers quickly.

Personalised Offers: Use data from previous interactions to offer personalised discounts or recommendations that resonate with individual prospects.

Sales Support: Provide sales support through chatbots, live chat, or customer service representatives to answer any last-minute questions and assist with the purchase process. Some of this could be automated responses 

Across these two stages of the funnel (consideration and conversion), you should consider investing approximately 15-20% of your budget (depending on how much you have invested into prospecting).  

The Retention Stage

Engaged customers continue to do business with you and may refer others. The aim is to maintain satisfaction and loyalty. Around 70% of customers check reviews prior to purchasing, this statistic goes up to 95% depending on the industry or product. So it pays to have a strategy to retain your customers, and collect their reviews. Is there a way you can ask each of your satisfied customers to leave you a review? Over time, this can be a very cost-effective way to market your business. 

Aside from reviews, some other ways to retain customers could include:

Loyalty Programs: Implement loyalty programs that reward repeat customers with points, discounts, or exclusive access to new products. This doesn’t need to be complicated, think of a coffee shop with a coffee card that gets stamped with each coffee purchase.

Regular Communication: Stay in touch with customers through newsletters, personalised emails, and social media updates. Share relevant content and special offers. Always ask yourself whether that important update is important to your customers or to you… you want to keep your newsletters interesting so your audience will continue to open, read, and engage with your content.

Exceptional Customer Service: Arguably one of the most important aspects of retaining customers. Provide outstanding customer service to address any issues promptly and ensure a positive experience with your brand.

Exclusive Content and Offers: Offer exclusive content, early access to new products, or special discounts to loyal customers to keep them engaged and appreciated. 

Retention doesn’t need to cost too much money, but if you can stretch the budget, consider allocating around 5% of your budget on retention. It is far cheaper to retain existing customers than it is to acquire new ones, so although you don’t need as much budget allocated, it’s just as important as acquisition. 

Need help planning marketing activity for each of your marketing stages? Contact us and we can help with a strategic marketing plan tailored to your target market and business goals.