Funnels are key. Here's why... #51
- Adrian Dionisio - business737 owner
- Jan 17, 2022
- 6 min read
Updated: May 14, 2024
What is a funnel?
A funnel has many different names, all for the same thing;
Marketing funnel
Customer funnel
Sales funnel
Conversion funnel
Purchase funnel
Revenue funnel
The key point - a funnel identifies the different stages involved in turning a prospect into to a customer.
Think of a road map showing the various phases of a buyer’s journey - from the first interaction to the end purchase.
So why are funnels important?
Funnels allow a business to maximise marketing and sales efficiency.
How?
Well, at any given moment, the funnel pinpoints exactly where the customer is during the buying journey.
This information enables your business to target customers with highly relevant marketing, content and campaigns.
When you know exactly where they are are in the decision-making process, you know what information will be relevant to them, at that moment in time.
Marketing becomes simpler
Marketing becomes more effective
Allows more relevant engagement
Improves conversion rates
Increases lead generation
Effective for building trust and relationships with leads
Funnels segment the journey of your customer. At each separate part of their journey they will want different information and inputs. You can now provide it to them
Marketing is streamlined
Accountability is increased
Revenues will increase
Increased profits
4 segments of a funnel
Funnels break down the buying process into sections:
Awareness
Interest
Desire
Action
1. Awareness
The first step is to attract interest and raise awareness of your business, products and services.
You need to get noticed (read here). While core principles of marketing (read more) are fundamental to success, you also need to familiarise yourself with effective digital marketing techniques (read more). Here are ways to increase awareness about your business;
Advertising
Articles
Social media
Content marketing campaigns
Organic search
Podcast / webinars
Paid search / landing pages
Billboards
Influencer marketing
Paid Ads (Facebook, YouTube, Google, etc.)
Radio ads
TV ads
Attending live events
2. Interest
Next, after awareness, a business must build peoples' interest in products and services. Recognising a problem or need is the step that triggers a search for more information. This interest brings potential leads to the second stage of the funnel.
At this point, people aren’t looking for promotional content; they’re looking to learn more about potential solutions for their need. Buyers in general are spending more time researching products prior to purchasing. Fuel their interest with;
Engaging content
Irresistible offers
E learning
Stand out design
Email campaigns
Value
Content marketing (Blog posts, YouTube videos, etc.)
SEO
Social media
A successful business must find a way to attract the attention of the right people and make them interested in what is offered. Recognise your customer's Problem / Need. This is how to make people interested in your business (read more).
3. Desire
The next step is to build trust and desire. Help prospects learn more about your brand and products. Build trust with your prospects and earn their loyalty. Fuel their desire by offering what they consider valuable (read more here).
Visitors that reach this funnel stage are considered highly qualified leads and need to be nurtured to move down the funnel. Understand your customer’s state of mind and expectations. Arouse their desire with;
Testimonials,
Reviews,
Case studies
Whitepapers
E-books
Brochures
Microsites
Price comparisons,
Merchandising techniques,
Automated marketing campaigns
Community forum
Engaging content
4 Action
The final and most important is the action stage.
Up until this point, your leads have been traveling through the funnel and taking smaller actions, such as signing up for your newsletter or downloading an eBook (often referred to as micro conversions).
The purchase decision is the conclusion of the preceding three stages. The end goal is to make your leads convert and make a purchase.
1. The customer has determined that they have a problem,
2. They have investigated their options,
3. They have decided which one is best for them
Now they’re getting ready to pay.
At this stage you can increase sales by,
Optimising your website for conversions (CRO)
Provide risk-free trials
Money-back guarantees
Pay-by-performance pricing model
Add customer support chat for last minute objections
Add an FAQ section made up of last minute objections
Add reviews around your purchase page
Offers that make purchasing your product or service risk free
A lot of churn at this stage indicates that lead nurturing tactics are not effective
Remember, only a small percentage of the visitors that land on your website actually reach the final stage. That’s why even the smallest improvements at each level can have a significant impact on your bottom line. Identify the causes of the funnel “leaks” at each stage and make the necessary adjustments.
Post-Purchase
The journey isn't over just because a purchase has been made. What happens after the sale is just as important.
Creating a great experience impresses purchasers and ensures they will keep doing business with you in the future. A superior experience becomes a valued and unique asset for any type of business.
Happy customers are more likely to;
become loyal customers
refer you to friends and colleagues
make recommendations
make product endorsements
When you treat people in a special way they will tell everybody and your business will get stronger. This is why customer service and experience is so important and valuable (continue reading).
On the other hand, if your new customers experience disappointment after their purchase, they’re more likely to
request refunds,
write negative reviews and
recommend that others in their social circles purchase from your competitors.
Prevent Cart Abandonment
There are many reasons why a potential customer will abandon their cart. They could be just
browsing
price comparing
learning more
forgotten to complete their purchase
Abandoned carts do not mean missed sales so you can still communicate with them, using email marketing, retargeting ads, or even push notifications. Campaigns you could run to decrease cart abandonment include:
Abandon Cart Emails; to remind the user that they have things in their cart
Remarketing Campaign; highlighting the importance of one of the products in the user’s cart
Push Notification; mentioning a price drop on a product in a user’s cart.
Marketing Funnel Metrics
Measure and test funnel performance. Why? This will allow you to make well informed decisions. Continuous A/B tests, collecting feedback and tracking key metrics is essential to measure whether tactics are working.
Without measuring and testing, your decisions will be based on assumptions and speculation. Go beyond guessing and hoping. The results of your tests and measurements will guide you through important decision making processes. There will be significant improvements when you have a greater understanding and insight (read more about testing and measuring your business activities).
Sales funnel conversion rate
Tracks the number of prospects that enter your funnel at any point and how many convert into customers. Seeing this number improve means you’re on the right track.
Entry sources
Monitor the sources from which people are entering your funnel. This will help you make decisions for expanding the reach of your marketing campaigns. Upgrade and expand on what's working. Ditch what is not effective. Try different things and test them.
Time in stage
It is important to know if your prospects are getting stuck in one of your stages. If so, you’ll want to improve this stage of the funnel to make it more effective.
Exits from stage
People falling out of a particular stage is a red flag. More than likely you aren’t doing enough to answer their questions or you’re asking them for too much of a commitment too early. Give them the information they need to move forward and make it easier for them to convert
Content piece engagement rate
What pieces of content are sending the most converted customers through your funnel? You need to know this so that you can build upon this success.
Once you have identified what's proving successful you can;
Update those pieces of content
Send paid traffic to that blog post
Promote it via email
Create similar more content pieces etc
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).
Close rate
Close rate (or win rate) refers to the number of visitors that turn into sales.
Divide your total number of leads by your total number of sales/closes.
Investigate a low close rate. Look at other metrics for ideas on improving the success rate of your funnels.
There are many different tools you can use to track these and other metrics. Google Analytics is an easy to use solution. It’s free and the funnel-tracking tools are suitable to cover the basics.
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