In this article
How does your business get customers?
Some random guessing game where your potential customers somehow find their way to your site and magically buy your product or service? If you have a banging product or service, that might be working for you, but you could be making more. And if you're sitting there with a great product but still no customers, pull up a chair because this article is for you.
Let me introduce: The Marketing Funnel - one of the essential marketing strategy tools to bring customers into your business.
No matter what industry you're in, you're going to want to develop a marketing funnel to create a streamlined process for bringing customers to your business and leading them to make a purchase.
In this article, we'll go over what a marketing funnel actually is, why it's important, how every stage of the funnel works, how to track your marketing funnel, and how to make it better (AKA get more loyal customers and make more money).
What Is a Marketing Funnel?
A marketing funnel, or sales funnel, is a system and visualization for how your buyer personas find your business and eventually become loyal customers. Your marketing funnel goes along with your customer journey, but is a broader view of that same process.
If you've put any sort of marketing strategy or customer journey together to get customers, you already have a marketing funnel. How good it is might be a different story though, which is why you want to give it some extra attention.
In the funnel system, you have three main stages that your customers go through:
- Top of the Funnel (TOFU)
- Middle of the Funnel (MOFU)
- Bottom of the Funnel (BOFU)
These three stages have smaller stages within them, but you get a nice "beginning, middle, end" visual with the three.
So why the funnel shape?
The idea with the funnel shape is to illustrate that you likely won't be able to convert every single lead you bring in at the top of the funnel. People will naturally peel off or end up not being the right fit for your product.
Sure, the dream would be that every lead you generate ends up being your target audience and purchases your product. But in reality, some people won't end up converting. Maybe they just get distracted or maybe they don't end up being your target audience in the first place. That happens.
Sometimes you can find and fill gaps in your funnel so you have a higher conversion rate [we'll get to that later], but you should generally expect to have some leakage.
An effective marketing strategy will take this into account and make sure their marketing funnel starts broad. They'll aim to generate more traffic with the expectation that a much smaller percentage will actually end up purchasing the product.
What Is the Purpose of a Marketing Funnel (Why Is it Important?)
The core purpose of a marketing funnel at the heart is to get you more sales and more customers. You might say, "but wait.. isn't that the core purpose of...all marketing?"
Well, yes. So to get more specific, the purpose of a marketing funnel is to help you create a structured and measurable marketing strategy that leads potential customers through their buyer's journey as seamlessly as possible. When you have a solid marketing funnel figured out you can start to look at what's working and what isn't, then make your conversion better.
Sound like a good deal? Let's take a look at how it all really works.
How the Marketing Funnel Works From Top to Bottom
So how does this magical customer-converting marketing system work? I'll give you a hint: it's not actually magic.
Remember those three main stages I talked about? (TOFU, MOFU, and BOFU.) Those separate a bit more into smaller stages you may recognize from a customer journey map – awareness, interest, consideration, conversion, and retention.
These sections involve different marketing tools and strategies that then feed into each other to create one super-valuable, customer-converting marketing funnel. Here, we'll go over each of these stages and different common ways to make the most of it.
Awareness – Problem/Need Recognition
The awareness stage is the TOFU and the very first stage in your funnel. It's also the widest-ranging stage of the funnel. It's when your target audience goes "oh shit, this is a problem," and your business pops up in some way or another.
ALL of your customers have to go through this stage to get to the rest of the funnel. For that reason, it's gonna take a big focus here. Because if this part of the funnel doesn't bring anyone in, the rest of it is kind of pointless. (i.e. Imagine putting all your energy into curating an amazing email newsletter that has killer conversion copy in it, then... not telling anyone about the email newsletter? As good as the newsletter might be, if it's not going to anyone, it's not making any sales.)
The whole "awareness" thing takes on a bit of a double meaning here depending on your business. First, people become "aware" of the problem or need they have. Second, they become "aware" of your brand. Ideally, these two connect so now your target audience associates your brand with the problem or need they're having.
For example, say Alex has a boutique aromatherapy candle company. Her awareness stage might be the moment someone sees one of her ads on Facebook or when someone reads an article about ways to relax and the article recommends using candles.
It may not be Alex’s article but it brings awareness to this potential solution to the soon-to-be customer.
These days with the digital space of search engines and social media, there are tons of different ways you can get your company name in front of the right people. To give you an idea, here are a few:
- They listen to a podcast where the host gives you a mention
- They read an article that recommends your product
- They see one of your ads on Facebook
- You show up on their Pinterest dashboard
- They Google something and your blog or website shows up
- One of their friends mentions your product
- An influencer gives your brand a shoutout
There are SO MANY. Literally. The possibilities are endless.
But, okay, so you've popped up, what are you actually saying at this stage? "Pay us money!"?
At this stage, you may get a very select few that'll skip straight to the purchase stage, but for the most part, that's not your primary goal here.
Instead, you're bringing up the problem they have. You're even potentially adding some fuel to the flame to illustrate how the problem should be a priority. And you're putting out a possible solution (ahem – your product or service).
This should be a fairly basic and straightforward message that you can get out to as many people within your target audience as possible. Remember: this is the broadest stage of the funnel so you want LOTS of people.
However, with that in mind, it takes money and time to get your brand out there so you might not be able to do ALL THE THINGS. (Hell, it might not even make sense for your brand to do all the things.) Either way, these are the main places you'll want to consider getting your name out there to get through the awareness stage and a quick idea for how to do it.
There's a reason why "to Google" has literally become a verb in the dictionary.
Need to look something up? Google it.
Need to learn about an issue? Google it.
Need to find the right product or service? Google it.
You get the point.
And your customers (or future customers) are doing the same meaning some of the most valuable outreach you can do is just getting your website up on that first page of Google in the searches your customers are doing.
This could mean making new dedicated blog posts focused on the issues you solve or optimizing your existing product and landing pages. Ranking on Google and mastering SEO is a MASSIVE topic though, so we won't get into the details here.
Pro Tip: If you need to know about all the SEO details, you can check out our post on SEO best practices for eCommerce in 2021.
2. Social Media
There are so many people on social media and so many social media platforms, meaning it's a great place for digital marketing (but also understandably overwhelming). Develop your own social media channels and aim to gain viewers organically or use paid targeted ads to get on your customer's feed.
If you're a one-person marketing team, I'd probably recommend pulling out one or two social media platforms and sticking to that so it's more manageable.
This can also be a great start to lead people into the next funnel stage by getting them to follow your socials.
Pro Tip: Set up social media campaigns that can help move potential customers further down the funnel.
YouTube is like a mix between Google and social media. It also has a huge audience (it's the third-largest search engine next to Google and Google images).
Even if you're not video savvy, you can make a YouTube channel and start getting some views to your brand through that avenue.
Pro Tip: Learn from the best YouTube marketing campaigns.
4. Online Communities
Slack, Quora, Reddit, Facebook groups - all these online communities are prime areas to get your name out there because people will likely have a higher level of trust and engagement in these areas. At the same time, this can also be a tricky line of outreach to get into without really becoming a part of that community first.
Pro Tip: If you want to learn more about the nuances of different niches, groups, and subreddits, check out our post on community-focused marketing.
People who already have a large following are a great resource to utilize in this stage. If the influencer can bring awareness to the problem (then conveniently slip your brand's name in there) that's a great way to bring more people into your funnel.
Interest – Information Search
The interest stage is the start of the MOFU. Once your audience knows the problem, they're likely going to jump into research. This is where you can start developing your relationship with your potential customers.
They'll want to be learning about the topic as a whole (not just about your product). In this stage, you're giving them that information through valuable (free) content and developing your credibility.
You want your prospects to not only see you as a player in the solution, but as an expert. When you give your audience really solid advice that doesn't feel like cringy, sales-driven content, you develop trust. That way, when you actually do start to lead them into the next stage of the funnel and bring up your product, they're going to be way more open to it.
So how do you develop this stage? Here are some ideas:
Social Media Following
As I mentioned earlier, social media is a great place to develop your audience and provide information in an easy way. This is especially important if you have a longer customer journey because there's a high chance they won't buy right away.
This way, you stay in their feed and on their mind as they go about their day.
Not only that, but having a decent social media following also provides social proof, which is an evolutionary way to get people to like you just by seeing how many other people like you.
Maybe they like your free information, but they aren't ready to shell out money yet. Give them the opportunity to get more free content by signing up for an email list. This gives you direct access so you can connect with them directly through email and lead them through the sales funnel with that.
When you provide blog content that gives good information and is actually fun to read, you're going to find people actually like coming to your website. Even if they don't make a purchase on the first visit, the second visit, or even the third, if they keep coming back, you've got a good relationship with the person so when they are ready to make a purchase, you'll come to mind.
Blog content is also great for ranking for more specific Google searches when potential customers start to learn more about different topics surrounding the problem.
For example, if you're selling desk organizers for WFH offices, your audience might move past just searching for "how to organize my desk," to "office decor," "office desk setups," or "organization hacks." If you're creating great content that can help prospects get the information they need, you're going to stay at the top of their mind during their purchasing process.
Consideration – Evaluation of Alternatives
At the consideration stage (the second part of the MOFU), prospects understand the problem and they've looked at possible solutions. They've likely gotten a decent amount of information.
Now, they're looking to compare different products to find the right one for them. Think reviews and "Best of" roundups.
If you've done the first two stages well, the consideration stage may be one that goes quickly.
For example: if you've already put a bunch of time and energy developing a trusted relationship with your prospects through fantastic informational content on your blog and a solid email series, by the time you bring up your product, you'll already be five steps above any other product on the market in the eyes of your potential customers.
Why? Because your brand isn't just some unknown website on the internet anymore. You're a brand they know, like, and want to support.
However, sometimes that isn't enough or you just want to really seal the deal and ensure your brand comes out on top (duh). In that case, here are some other specific ways you can address the consideration phase.
Establish Why Your Brand Is the Best
What makes your products better than your competitors' products? Do you have fantastic customer service? Does your product last longer? Do you offer the lowest price?
Figure out the unique sticking points for your product or service, then highlight them. Explain why prospects should use your product over any other. If you can, get on third-party review articles talking about the best of your market.
You know the saying "show, don't tell"? The same goes here! Telling your potential customers you're the best is great and all, but if you show them you're the best, that's what'll have a way bigger impact.
So how do you show potential customers you're the right choice? Through real examples. Think hard data, case studies, or reviews. For example, if your company offers a conversion copywriting service, create a thorough case study with one of your top clients showing exactly how your service benefitted the client and how much.
In fact, that’s exactly why ReferralCandy has referral marketing case studies pinned right to the homepage.
Seeing that real-life example is honestly going to do just as much or more for your marketing funnel than anything you could say about your product.
Conversion – Purchase Decision
The moment you've been waiting for! The BOFU where your lead generation finally pays off: the purchase.
The people who have gotten to this stage of the marketing funnel have decided that your brand is the best choice for them, and they're planning to buy.
Buuuuuut... they aren't quite there yet.
They just need a little extra "nudge" to take the plunge. This could include offering a discount, free trial, further testimonials, or a sense of urgency.
Whatever you choose to add here as an extra incentive, just keep in mind that effective marketing stays authentic. Don't lie or fake urgency – you've gotten your target customer this far, don't break trust now! Instead, give them an opportunity that's easy for them to say yes to.
Along with the offer, make sure your buying process is easy for them to use. Otherwise, you can easily get into the realm of shopping cart abandonment.
Retention – Post-Purchase Behavior
Hold up, you thought you were done? No no, there's still one more stage in this marketing funnel.
Creating a way where you can keep that new customer coming back or upsell them on a different product should be an essential piece of your marketing funnel. It kind of fits into the BOFU, but doesn't exactly fit.
You could almost call it the ladder, because you can direct the customer back up to the top of the funnel to later make another purchase.
So why is this so important as opposed to just acquiring new customers? Well, turns out working with existing customers is WAY more cost-effective on multiple different levels. They're more likely to buy, less price-sensitive, and cheaper to work with.
To help retain customers, consider sending a post-purchase survey, connecting with them on social media, develop a referral program, or offer an upsell deal on your other products.
Which Marketing Funnel Metrics Should I Track?
Now that you know how a marketing funnel works in all its glory, how do you actually measure it? And do you even need to be keeping track of it?
First – YES! You should 100% be keeping track of your marketing funnel. Why? Because it's a great way to help you keep track of your marketing success and make sure the process is working correctly. If one month you notice a massive drop in people purchasing or moving from one stage to another, there might be something going wrong.
That's where ecommerce metrics come in. If you assign different specific metrics to each stage, then you can track what's really going on in your funnel.
Here are some ideas for metrics you can track in marketing funnels at each of the funnel stages.
- Number of visitors coming to the site with a tool like Google Analytics.
- Number of paid ad clicks.
- Number of impressions on Google search engine results.
- Number of backlinks or mentions your brand is getting from other sites or influencers.
- Number of people signing up for your email list.
- Time spent on informational blog posts.
- Number of click-throughs from informational Google search results.
- Follower count and engagement rate on social media platforms.
- Click-through-rate (CTR) for your email sequence.
- Number of shopping carts initiated.
- Number of views on your product pages or landing page.
- CTR on social media platforms.
- Number of people purchasing your products.
- Shopping cart abandonment rate.
- Number of resales.
- Percentage of returning customers.
- Number of returning visitors to your site.
- Number of referrals.
(Note: you don't have to track all of these because that could easily get overwhelming, but choose at least one metric for each stage depending on what would work best for your brand.)
How To Plug Leaks In Your Marketing Funnel
So now you're tracking your metrics and suddenly notice a massive drop between two of the funnel stages – what do you do? First, don't panic. The good news is realizing there's an issue is half the battle.
Put on your detective hat (or just reexamine your customer journey map) and start thinking of issues that might be coming up for your customers at that stage that's turning them off. If you can, maybe try sending out a survey or set up a heat mapping tool to track what visitors are doing on your website.
Once you know what's going on, it's just a matter of fixing it. I know – easier said than done, but you'd be surprised! I won't try to go into every single possible mistake and solution here, but if you want to learn more, you can check out our full list of eCommerce mistakes.
For now, here are a few common tricks that may help you close some leaks.
An exit-intent popup may help if your issue seems to be with the conversion stage or between consideration and conversion. With an exit-intent popup, you can track when the visitor moves the cursor to leave the site then have a popup come up with an enticing deal.
Funny story about retargeting ads – my first week at a new web production job, I was uploading a post about men's underwear, so I was going to all these sites and getting product photos and adding links. For the rest of my time at that job, Saxx underwear ads would constantly appear.
But here's the craziest part: A year later, I actually did buy some Saxx underwear.
It really does work. 🤔
If you want to engage with your customer during the exact moment that they're making a purchase, live chat is a fantastic option. Maybe your customer has a question you haven't answered on your landing page. Maybe they want a little more assurance with their purchase about your return policy.
With a live chat option on your site, you can make sure that doesn't cause them to leave the site. Instead, you can have more engagement with the customer.
Social Media Customer Service
Nowadays, customers expect instant results. They want things on their phone, quickly and easily. It may be that your buyer persona will drop out of the funnel if they have to call you to get service.
In this case, you might consider allowing customers to contact you through your social media DMs on Twitter, Facebook, or Instagram.
If It Doesn't Work, I'll Eat My Shoe
Establishing your marketing funnel is essential to creating an effective marketing strategy. Get your sales and marketing teams together, develop your marketing funnels, track the metrics and sales returns, and make changes when you need. If you don't see a return on investment, I'll eat my shoe.