What is a marketing funnel?
A marketing funnel sounds like a tool of the plastic variety, but it is less of a thing that you might use in your kitchen or garage, and more of a metaphor - like the four-hour work week or four-hour body (which none of us has ever been able to achieve, thanks a bunch Tim Ferriss). Think about the shape of a funnel - wide at the top and narrow at the bottom. Lots of volume goes in the top which in this case is potential customers that broadly fit your demographic and by the time it gets to the bottom, it is narrowed down to the people that fit neatly into whatever you are funnelling into, hopefully, a flow of transactions in your business who are primed for a sales conversion and to become raving fans.
The funnel shape refers to the reality of how many touchpoints are needed to convert into sales or whatever it is that is your goal with the funnel. Across the life of your business you will have different funnels for different campaigns, and you may have an overarching funnel for your whole customer acquisition and journey. Funnels are a detailed and strategic way to conceive of your marketing strategy. They require deep knowledge about your customer; an idea of the timeframes you want them to fit into across their brand interactions; creative thinking regarding how to capture their attention and amplify their engagement at each stage of the funnel; and a set of metrics that validate your assumptions and market tests to help you pivot when you need to or double down when you have your funnel humming.
Marketing Funnel Stages
There are three stages in the typical B2B sales funnel: (1) Awareness & Discovery at the top, also known as the top of the funnel or TOFU, (2) Interest & Engagement in the middle, also known as the middle of the funnel or MOFU, and (3) Decision & Action at the bottom, also known as the bottom of the funnel or BOFU. This funnel segmentation is also known by the acronym AIDA: Awareness, Interest, Decision and Action and doubtless countless other terms describing a funnels breakdown. Here is a visual to give you the idea of how it works, and what is in each of the segments.
Top of the Funnel (TOFU)
The top of the funnel (TOFU) is the initial part of the sales journey where your prospective customers are beginning their Awareness & Discovery of your brand, products, services and solutions for the first time. This is a critical phase because this is the first impression moment which you won't get too many second chances with. It is here that your values and story need to be clear, strong, and compelling, as you want this part of the funnel to elicit deep curiosity to get to know your brand better and deeper.
At this stage your customers might be engaging with your content online, discovering your landing page, hearing about you from a user, or seeing an ad campaign you’ve been running on socials. Because this is the phase where you will be exposed to the most amount of people, it is imperative that you get as much positive penetration into the customer psyche as you can because you want to migrate these prospects into the next phase of the funnel, and here in TOFU, you are just one of many solutions to their problems, not the only one.
There are a few different types of content that work well for this phase, here are some ideas for you to make your own:
- Blog posts: Blogs are a great way to give information to your prospective clients while showing who you are as a brand and hitting all the keywords. Make sure to provide relevant call-to-action options throughout your posts to capture the moment when they take the first steps to MOFU.
- eBooks, reports and whitepapers: All of these are great to position you and your brand as thought leaders, demonstrate your authority and depth of knowledge on a topic and of course to capture an email address during the download.
- Infographics: Visual assets are always sticky and showing data in a creative way will make information digestible to those folk who are a bit TL;DR with longer material. Make it fun, beautiful and sharable, and link it to the base data which may be one of the longer texty pieces.
- Paid social media posts: Captures people in their relaxed unguarded environment where they are often motivated to seek change, seek solutions or to go deeper. Post content needs to be natural and aligned with the social environment people are in. No hard sells here m'kay.
- Videos: Still the best, stickiest and most compelling thing on socials and web, videos are a gateway drug to get people to hang around a little longer and get exposure to your brand. Link to gated content so an email address can be shared and you have made a big leap towards MOFU engagement.
- Testimonials: Social proof. Sharing success stories allows you to showcase how you’ve helped your clients achieve their goals and show your prospects that you can solve others problems - why not theirs?
- Webinars: Sharable, interactive and value laden, engaging webinars are great to help people get to know you and what you're about, also great for qualifying leads and capturing email addresses.
- Newsletters: short, sharp, informative and relevant, once you have an email address, keep your customer warm by showing the value you can offer, and link to some of the other items above to keep the loop moving.
Middle of the Funnel (MOFU)
Once a prospect passes the awareness phase, they move to the middle of the funnel. This is the phase of the sales journey where they begin to show Interest & Engagement. This doesn’t mean they’ll end up spending any of their budgets with you, but rather that they’ve already internalized the fact that they need help in reaching their goals.
While in the first step they became aware of the solution, the second level of the funnel is focused on a follow-up that centers on teaching them about your solution and walking them through what they could gain by using it. Don't be confused about the problem piece here, every product or service is solving a problem of some sort, no matter how trivial, disposable or immediate. That problem might be that you desperately need another red lipstick or a bucket of fried chicken, high-quality problems to have, but still problems.
MOFU is a deepening of the relationship between your brand and your prospect. If TOFU is the first date where everyone is on their best behaviour to get a second date, MOFU is where you must bring consistency to your brand values and genuine desire to please your customer by being exactly what they need. This is not a sales mission, it is a connection mission where you are wanting to understand, empathise and deliver a perfect solution. You are a partner, not a salesperson, but you are still required to make your engagement fun, compelling and creative to stand out from the crowd.
Now you have those leads and initial interest from TOFU, you need to nurture them in MOFU - here are some ways of keeping the flame burning as you deepen the relationship:
- Personalise and educate: use your comms, insights and CTA's strategically so your customers feel that you really understand them and their needs with specific content that will speak to them and their stage in the purchase process. You don't need to communicate with every customer all the time. Work your CRM functions strategically, segment your lists to achieve this nuanced communication and show you care.
- Give them space: no one likes a pushy new friend, allow what you do share to marinate slowly, your customer to grow fonder and want to have some more engagement. This isn't a relationship metaphor, it is an actual relationship and the same rules apply.
- Re-engage and nurture: genuinely circle back to your prospects when some time has passed, understanding that life is busy and you may want to offer a little more info or a reminder of why your product, service, solution is just right and nudge them along the funnel.
- Refine the problem: create content around consumer pain points to show how well you understand the problem you’re going to help them solve and that you know the problem as well or better than they do.
- Be creative: everyone is drowning in information, make your offering distinctly different to honor the time they are going to spend engaging with you.
Bottom of the Funnel (BOFU)
In BOFU, the bottom is tops. It's the moment that everything has been leading towards, go time, show time and hopefully time to convert all of the connection into action when your customers enter the Decision and Purchase phase. Assume if they are here they are across what you have to offer, like what they've seen, believe your brand promises, and have also given other options in the market a red hot go as well and still see the value in you. What can go wrong? Plenty. An unwavering commitment to your brand, the trust you've built and your resolute belief in the capacity of what you offer to really solve their pain-points is needed here. In reality, if you have done TOFU and MOFU right, then BOFU should be a non-decision, simply a formality to the process of delivering what is a foregone conclusion. But reality and human nature are often at odds, so it isn't always the slam dunk you'd like it to be. A little extra icing on the cake can be done here to sweeten the movement from decision to transaction, so while continuing in the clear, authentic communication you've already been using, make sure you have covered off on the following:
- Why you: of course competitors exist, but rather than smack-talking down their products, accentuate all the things you offer, the real value proposition, if you love what else is in the market, talk them up too, that builds trust and shows grace and confidence in what you have.
- UX and customer service: Make sure that your customers are super clear on any training or usability of your product, service, or solution, give them everything and more, whether it is a complex software installation, a DIY furniture solution, or that bucket of fried chicken - let them know exactly which sauce is the absolute bomb for their alfresco in-car dining experience. If there is customer service in the mix, let them know how they will be supported post their purchase so they feel 100 percent secure. The more complex your offering is, the more critical this part is.
- Pricing and payment options: Remove all barriers to purchase, with seamless payment options and gateways, the smallest hiccup can scupper a sale, even at this point. Anticipate all the needs and make it as few strokes as possible to make it happen.
- Raving fans wanted: once the deed has been done, help your new biggest fans to share the love with everyone on every channel. Follow up, survey, give all the social links, show examples of how others have done their testimonials, ask for what you want and need. If there have been any issues in the process, make sure you are there for them too and offer as genuine and helpful a solution as you can, this is where you can really show your brand values in action and often make (or lose) a customer for life.
Metrics for the Measurements
The final step in the process is to figure out which metrics you’ll track to determine how well your funnel is functioning. It’s crucial to work with your analytics data here to track patterns between who closes and how they interact with your site, content, channels, ads, etc. Once you have more information, you can continuously optimise your funnel - which is what the process is all about. Funnels fundamentally help you understand and validate the assumptions you've made about your customers, many of which will need a little tweak.
The great news is, with every piece of content you create for every stage of your funnel, you’re generating data. That can be a lot of information to wade through, so have KPIs for the process that will actually give you the information needed to make meaningful improvements to your marketing, and especially choose metrics that allow you look at progress over time as well as short term. These metrics should be similar to ones you use in other parts of your business to track growth, so they can all layer together for a detailed map of your growth, areas of progress and ones that are lagging and need change. Choose 2-5 to focus your attention on to begin with, you can always add more later when you have questions that are unanswered by your current choices. Here are some ideas for metrics that might be valuable to your business:
- Sales funnel conversion rate – This is a pretty fundamental metric to track the number of prospects that enter your funnel at any point and how many convert into customers. It's the reason for the season. As you make changes to your marketing strategy in the future, seeing this number improve will let you know you’re on the right track.
- Points of entry and exits – Monitoring the sources where your customers and prospects are entering your funnel is useful data to track, it shows you the reach of your marketing campaigns and what really resonates in each phase. This is cool, because you can really hone in on what works and you might be surprised at where performance comes from and who are the real influencers for your business. Likewise, seeing where people disconnect will surface where you might be asking too much, pushing too hard or asking the wrong questions.
- Dwell time – Sometimes you will see a prospect move through the funnel at pace, they are ready to make a buying decision and it can be fast and easy. This obviously has a lot to do with price point, demand, and the need for or barriers to consumer education. Measuring how much time people spend in each phase can reveal where there are blockages or friction, and help you look for ways to accelerate the phase progression.
- Content engagement rate – Its good to know which of your CTAs are sending the most converted customers through your funnel so that you can replicate your success by upgrading/updating that piece of content, sending paid traffic to that blog post, promoting it via email, and/or creating more content pieces like that. Tracking engagement rates on each CTA will give you this information (you can easily set up Google Analytics goals in order to see which posts drive more conversions).
- Opportunity arrival rate – Opportunity arrival rate measures the number of opportunities currently in your funnel. Track this rate and see how changes to your marketing strategy impact it up or down and tweak accordingly.
- Close rate – Exactly as this sounds, this is the bell ringing to signify you have made a sale as a direct result of your funnel progression. If your close rate is lower than you expect, look at some of the other metrics you’re tracking for ideas on improving the success rate of your marketing funnel and go back to each segment to review where you might be missing the mark.
There are a number of different tools on the market today to help you track these and other metrics, though for most businesses Google Analytics represents the most comprehensive, easy-to-implement solution. Since it’s free, use the service’s funnel-tracking tools until you determine that you need something more advanced and then move on to another sales analytics program or a marketing automation program of which there are many to suit all budgets and experiences.
Ready to Funnel?
That all sounds like a lot of work, and for your first funnel, it is all new and a little daunting. Learning and implementing anything new will feel like this, so push on through the feeling of overwhelm, ask for help, make mistakes, and check out what others are doing well and emulate them. Your marketing funnel demographics will come out of the initial work you have done in your marketing and digital strategies, personas, user journey mapping, so doing the heavy lifting here will mean that when you get to your funnel, you will be ready to ideate and action key elements for each phase.
As always, your Digital Ready coaches are here to guide and support you. Every Tasmanian business with an ABN is eligible for four hours of coaching for free in every calendar year, so book a session if you are ready to get funneling. And don't forget there is a wealth of information in the Digital Ready website made just for Tasmanian businesses - whether you love a blog, a video, a podcast, a factsheet or a webinar, its all there to get your business to the next level.