The key to growing most businesses is an effective marketing and sales strategy, and there aren’t many strategies more effective than a sales funnel when you’re implementing it properly.
It’s an easy way for entrepreneurs and business managers to conceive of complex customer relation processes, their relationship with prospective customers, and how to nurture and attract them into making that all-important sale for your product or service.
Stick around, since we’ll be going through exactly what a marketing funnel is and doing a comprehensive breakdown of how to implement one into your business, including relevant examples.
We’ll break the funnel down into its stages and describe what each one aims to achieve and what content or actions you must take during those stages to reach the bottom.
Table Of Contents
- What Is a Marketing Funnel?
- Stages in the Sales Funnel
- Content at Each Stage of the Funnel
- Content List
- Qualifying Leads in the Funnel
- Important Funnel Metrics
- Real-World Examples
What Is a Marketing Funnel?
A marketing funnel is a handy way of picturing the journey that someone takes from being a prospective customer to a confirmed customer who will place an order for your product or service. Everybody knows what a funnel looks like and how it works, so it’s something that everyone from the greenest entrepreneurs to the most seasoned businessmen can get to grips with.
In the marketing funnel, the open-top is referred to as the awareness stage, and this is where they first learn about your company. This could be achieved through any number of ways, from testimonials and online advertising encouraged by the company itself to interested parties reading e-books or social media posts that mention your service, even if it’s in passing. Any publicity is good publicity, as the saying goes, since customers won’t be going anywhere near your funnel if they don’t even know you exist.
Generating traffic is often the first step to getting people’s attention. Your company needs an active online presence nowadays since it’s guaranteed that’s where most of your customers will find you. Just being online isn’t enough, however. It takes a proactive approach that simultaneously knows which areas to target, so engage in SEO practices, publish white papers in the relevant online communities, and bolster your website’s visibility and search authority through the use of backlinks.
Interest and Evaluation
As the funnel narrows down through the interest and evaluation phases, you rely on a lot of the same practices to escalate their awareness and persuade them to grab at your sales opportunity. It’s at this point that more detailed information is relayed to the customer via webinars, newsletters, drip campaign emails, and case studies where the reliability of your service is demonstrated so they know their money will be well spent.
If you’ve not noticed, the outreach methods of a sales funnel get more personalized as they’re drawn further towards the bottom. The penultimate phase, commitment, usually involves a trial or demonstration of what your business is offering, along with phone or video calling to build a relationship with the customer and explain the onboarding process.
Sale and Post-Product Support
When it’s implemented successfully, the funnel has now rooted out all of the uninterested parties, or at least the interested parties that weren’t interested enough to commit to a sale. All that’s left is for them to purchase and you to deliver on it.
This is where many marketing funnels stop since it has served most of its use, but there is such a thing as a post-purchase follow-up stage. This is especially important if it’s a repeating service or product that you are selling since it’ll maximize customer retention and open up more opportunities to cross- or up-sell other products or services your company offers. This will also create loyal customers who will be willing to refer others to your business, putting other potential customers at the top of the funnel where the cycle will begin again.
It’s all well and good to know the theory behind the marketing funnel, but that’s useless if you don’t know what a practical, working funnel might look like in the wild. See two exemplar marketing funnels that we’ve written up below, describing what a lackluster funnel strategy looks like in comparison to an effective one.
A Poorly Implemented Marketing Funnel
Marketing funnels are especially useful for service or digital product sales, so let’s say that you own a company that sells that kind of content. You’re a smaller business that needs an efficient funnel strategy to grow and hang onto as many interested parties as possible. Your five salespeople operate off of leads that are bought online, tracking through each and calling them to try and generate interest in the product or service.
The problem with buying reams of so-called leads is that they often aren’t of great quality, and that’s the case here, so your callers are hitting a wall of people who are either a bad fit for the business or just outright uninterested in what you’re selling. Ignoring the implications of this faulty process on the continued growth of your business, there’s also no guarantee that you’ll make back the cash you spent on buying the lead list in the first place, and that’s just bad business. This is because they’re mostly useless to you and you’re only grabbing a small percentage of them.
A Well Implemented Marketing Funnel
Compare this aggressive marketing approach with a well-oiled sales funnel. Take the exact same company but this time the salespeople are operating one of these funnels. Using attention-grabbing marketing online, like ads that link back to your website, you can attract interested parties to the hub of your online activity. Once there, they find a lot of information detailing the service, the company’s history and record, and what that company offers via blog posts, diagrams, and other proven yet imaginative and engaging means of seeding interest.
With this model, they have come to you and have been grabbed by the effectiveness of your online content, instead of having been subject to an invasive cold call with a salesperson trying to make a sale, which is always an uphill battle when using that method. If they are interested in seeing what you have to offer, you would have a section where these customers can fill out a form or otherwise signal their interest to you. This means your salespeople know who to go after to maximize their chance of making a sale.
If you haven’t noticed, this example also requires less effort from the company and its salespeople than the first example yet will make more sales since they’re targeting the right people. It’s a matter of working smart rather than using brute force. Cold calling one hundred people and getting two on board isn’t as effective as getting twenty people trickling in and sealing the deal on ten of them.
Stages in the Sales Funnel
Now that you have some idea what the marketing funnel is and what happens during the stages, let’s get more into some more theory. The way we decide what to purchase is very similar, hence the prevalence of marketing strategies like the funnel that capitalize on our purchasing behaviors.
Many modern examples use John Dewey’s Buyer Decision Process which, as of the time of writing, is over a century old. This is the foundation of most, if not all, of the marketing strategies out there, so if you want to understand the marketing funnel to the fullest extent, you’ll want to understand the process it’s built upon. Here’s each step of the Buyer Decision Process and how the marketing funnel correlates with it.
The first stage of the Buyer Decision Process is the recognition that the customer has a problem or a need that can only be scratched by what somebody out there is selling. That somebody is you, of course, and we’re sure you’ve made the connection that this is the top of the funnel, or TOFU, where the awareness phase comes into play.
This process can be very simple or very complicated depending on a number of factors. The diversity and saturation of the market you’re operating in is probably the largest of them. After all, if your car self-destructs and you need to buy a new one, many people aren’t going to grab the same one from the same manufacturer again since there’s so much choice in vehicles and vehicle providers out there.
Some markets you’re operating in may even have entire alternate markets out there that can sap away customer interest. This is becoming increasingly common in service-providing industries that are becoming more digitized, leaving traditional players in the dust when they haven’t got with the times.
This all means that there’s no one way to identify the specific need that customers have, and how that need can be met by your company, since it varies between industries, sectors, and service types. The best you can do is have a healthy company profile that’s easy to find or stumble across online through the use of SEO and other savvy advertising practices.
When the customer has recognized they have a problem in need of solving, they will then go out and search for more information on what they should do next. This correlates with the middle of the funnel, or MOFU.
As you can imagine, the larger or more costly a purchase is, the more research a prospective customer will do since more hinges on getting the right product from the right providers. Grabbing stationary is one thing, whereas deciding on a new kitchen and who is going to remodel it is going to require considerably more research and interaction between the customer and the company.
Google is the largest search engine in the world by a wide margin, hence the importance of SEO in our previous descriptions of the marketing funnel. Whilst it wasn’t a factor in 1910 when the Buyer Decision Process was coined, the advent of the internet and online marketing makes these middle stages so much easier for both the customer and you.
Prospective customers will turn to the search engine of their choice and/or social media, including relevant forums where people may be talking about the kinds of services you provide. All of these are potential ins for companies like yours. Not by aggressively promoting yourself at them, however, but by positioning yourself as an authority on the services they’re looking for.
This is usually done through informational content that’s put out there with no strings attached. Getting noticed and remembered is the goal here, and due to the generally reciprocal nature of human beings, those who have engaged with your informational content are much more likely to have you as their first port of call when they need work done.
Research keywords so that you can identify and exploit the more niche search terms that get used when describing your line of work. That way you can create content targeting those terms to maximize how often you show up on people’s search engine results pages, which maximizes awareness, and yes, maximizes your sales potential.
Evaluation of Alternatives/MOFU
This one is still in the middle of the marketing funnel and sometimes might even be happening simultaneously with a prospective customer’s information search, depending on how keen they are. It’s also human nature to, when confronted with many similar but differing results to a query, compare and identify which one suits our needs the best.
You want to be the best, or at least the best currently in their sight, to grab up as many customers as possible and lead them further into the sales funnel. The time they spend doing this is also contingent on the size or scope of what they want and, if you’re in one of those industries where more time is spent, it’s in your interest to be open to courting them so they stay interested.
This corresponds with the interest and evaluation parts of the funnel and, like when we described those above, will involve an increasingly personal approach from you and your employed salespeople who are managing this process. In order to effectively evaluate your business against others, they will want access to training videos or trails and other valuable and persuasive correspondence.
Content geared towards seizing this part of the funnel would be informational ones that relate more directly to your business, like pricing guides and suggestions on the kinds of companies they should go for with their specific problem, all with a wink and a nod towards your own services, of course.
This will bring them to the sales portion of the marketing funnel or, as the Buyer Decision Process calls it, the Purchase Decision. This is the bottom of the funnel, naturally, and concludes most people’s sales acquisition efforts. This is where more persuasive content takes precedence since you actively want to convince them that you’re the best for the job.
Persuasion doesn’t mean hammering them with ads and unwanted phone calls, however. It’s called the subtle art for a reason and will instead involve you proving how effective you are for the job so that they feel most confident with you. Showing your results from previous customers is a tried and true way of doing this, especially when these case studies mirror the business or industry that your customer comes from. That’s why it’s handy to build case studies and have some on hand for the few different customer types you tend to get. Find the closest possible situation to theirs that you have dealt with in the past and show them how you handled it and what results your service achieved.
So far, this has all been presupposing that the feedback you have from past encounters is good. Unfortunately for everyone, that’s no guarantee and this will hinder the purchasing decisions of prospective customers if this is the case. Whether those customers will take what others are saying to heart will depend on so many factors, most of them out of your control.
A good way to think of this is that most people who expend the effort to review something either really like it or really dislike it, but the reality is that most customers will fall in between there, so it all hinges on which way they get pulled by the reviews of your product or service. The source of these reviews matters, too, with a big name in the industry’s positive review carrying more weight than five anonymous negative reviews.
If you have got negative feedback, remember that it’s all information you can use to improve your business and continue to grow.
This is the often-ignored part of the sales funnel, usually by those who make the error of thinking a sale has finished when a purchase has been made. In so many industries you’re not just selling stock or services but a brand. You don’t want to leave people with a bad taste in their mouths after they’ve done business with you, especially since that can generate negative feedback in the future.
This requires personal attention from you and your salespeople. A welcoming and informative onboarding process can and will reaffirm to your customers that they have made the correct decision to go with you. This also builds rapport with these customers, making them more likely to slide towards the positive end of the review spectrum, meaning not only positive feedback but they also may write recommendations, product endorsements, and service testimonials to draw more people in.
With all that said, the most important part of post-purchase is that the purchase itself is satisfactory, meaning you should be providing a quality product or service to them. From there, they should be amenable to an onboarding scheme and continued business with your company, whereas if they disliked their purchase, they’ll be mostly resistant to it and want refunds.
Content at Each Stage of the Funnel
We’ve alluded to them a little bit already but it's important to follow proven content distribution methods for the funnel to work as intended. You don’t want to be confusing customers at the top of the funnel with in-depth case studies and boring those at the bottom with all the same ads and articles they’ve already seen. Every stage should have its own marketing content that resonates with the customer and draws them further and further down the funnel.
When first planning out your marketing funnel and the content you want to use for it, you should be asking yourself a few core questions.
Some are easier to answer than others, but we think everyone can get the point through the use of an example. Taking the same company from the earlier example, we’ll pass through the marketing funnel and answer these questions at every Buyer Purchase Decision level.
Say you’re trying to sell your service or a digital product but you’re unsure of how to target the right people. As is common with the awareness stage of the funnel, you want to lay out some lures and let them come to you instead of pursuing them with an aggressive marketing strategy.
This means you should be focusing on convincing those that know about you and know they need your kind of product instead of going after those who don’t know about you and/or have no need for you.
This makes this step pretty simple across the board. What you would do in that situation is simply increase the traffic going to the company site. A bigger net will catch more fish which, when funneled, will have more sticking around since you’re working with a larger audience.
Don’t waste time and resources in explaining your product or service, instead elevate your company as experts at what they do. Establish yourselves so that you stand out during this awareness phase, so in the future people know exactly where to go when they encounter problems.
This is where creating targeted content starts to properly come into play. You may have used standard SEO tactics at the first hurdle but, now that you people’s attention, that won’t work forever. They want information now and it’s in your best interest to provide, but in a way that’s accessible and interesting.
So where will your prospective customers come from in this stage? In our example, you’ll want to still keep up SEO tactics like webinars, social media posts, and targeted keyword searches, and advertise what content you do create. This is because the appeal of the service is broad. Pay-per-click advertising is one of the most enduring forms of getting your content seen and is especially useful if you’re basing some or all of your information on Google or Facebook, since they have some of the most rigorous and trustworthy PPC schemes out there.
As for the kind of information the customers need at this stage, they should feel reassured in the first step they’ve taken down the funnel. You don’t want them to get skittish and bolt, so try to create content that reaffirms their decision and empathizes with the problem they have. Commiserating in the frustrations that led them to you is a great way to be relatable to the buyer but do it relatively strings-free otherwise any attempt at sincerity is wasted. Instead, simply introduce your company and what you do.
Knowing when your customers have moved down the marketing funnel is different from business to business. For our example, however, you should have a demonstration or trial set up of your service or digital product ready for interested parties. When they show active interest instead of passive interest, often by signing up on your site or some other form of clear, solicited affirmation of your company, that is the time to consider them as being part of the next stage.
Evaluation of Alternatives
Now that you suspect your prospective customers are comparing you against others, you can be sure that most of them are there simply because of the previous stage in the funnel. That said, what if a prospective customer originally traveled down someone else’s marketing funnel and, now hitting the evaluation stage, has happened upon our example company?
The evaluation stage is just as much about stealing prospective customers from your competitors as it is about retaining your own so the same doesn’t happen to them. This is why it’s important to be on top form because if you’re simply the best-looking people for the job then, all else being equal, you should get a larger slice of the pie.
So, what information do the evaluators need? Since they’re drawing comparisons between your business and others, you’ll want to help them along by offering up your own comparison chart that demonstrates how your service is better. Case studies are also great to increase buyer confidence. They’ll see past successes and be reassured that you can replicate the same results with them. White papers and other research will also help to further establish your business as an authority, and you can put them behind opt-on forms to increase brand engagement from prospective customers.
You’ll know when the customers have moved further down the funnel because they’ll be indicating that they want to make a purchase, and it can’t get any clearer than that. This can be a verbal agreement or a formal contract depending on the business and what’s being offered. If you’re interested in knowing how many pulled the ripcord at the last minute, however, then a shopping cart system is handy for tracking abandonment rates. Reaching out to these can smooth over bumps in your process or even convince them to take the leap.
At this point, you’ll fully understand where the customers at this stage have come from. They’ve traveled down the entirety of your sales funnel, or were poached from someone else’s, and have shown an active interest in buying whatever you’re selling.
So, what do you offer at this point to get the best outcome? At this point, you should just make it as comfortable and easy as possible. People like convenience, so minimize confusion by making checkout pages informative so customers know exactly what to do to pay up and get the service or product you’re offering. Describing what happens after the purchase is made is useful, too, as are positive case studies to finally convince the customers to part with their hard-earned cash.
You’ll know they’ve moved on when the sale has been complete. It should be noted that the process doesn’t fully end there, however, since you should still keep in touch with your customers via a post-purchase support system.
With those three important questions answered at each stage of the funnel, it’s handy to document all of the information the customers will require and at what stages if you want to refine your onboarding process. These can be boiled down into three categories, cold, warm, and hot traffic content.
Cold Traffic Content
This is the content geared towards those at the top of the funnel, and so is focused on introducing your company, your company’s knowledge, and its influence inside the relevant industry that your prospective customers have started exploring. Here are some examples of what that would look like:
Warm Traffic Content
Things get warmer towards the bottom of the funnel, so warm traffic content is for the center of your funnel. For this, you’ll want to transition from introductory posturing on behalf of your company and into persuasion, so they come around and show interest in your product or service. This will involve:
Hot Traffic Content
Arriving at the bottom of the funnel, there’s not much else to do here but seal the deal.
There is another popular way of describing the marketing funnel and organizing the content you create for it, and that is AIDA.
AIDA stands for Attention, Interest, Desire, and Action. Let’s see what each one entails:
This is similar to the awareness/problem recognition stage at the top of the sales funnel, though it pays particular attention to putting your finger on exactly what the customers want. Even when customers know they need something, they’re not always certain what that solution is or what it’d look like in practice.
Attention says to draw, well, attention, to that problem so that you can later offer your own solution to it. Since you helped them identify the need for your service or product in the first place, they’re likely to stick with you instead of running off to someone else, at least for now.
Interest is pretty similar to the interest and evaluation sections of the sales funnel. They now want information to solve their problem and will likely find an abundance of it, so it’s your job to be at the forefront and catch as many prospective customers as possible.
It’s important to do this without blatantly promoting what you’re selling. Instead, promote your brand by putting forward genuinely helpful and informative content. That will go further in convincing them to advance to the next level than any shining advertisement will.
Once informed, the customers are ready to pull the trigger on a solution but aren’t sure who’s the best company to provide it. You should be putting forward content that proves you’re the best, using previous successes and your continued knowledge of the field to impress.
It's here you’ll be evaluated against others, so it’s important that you maintain a good reputation with minimal bad feedback against your business and your product.
Action is at the bottom of the funnel where the customers, having become actively interested in buying what you’re selling, make a purchase. This is where you’ll get the customers to confirm their interest via a strong call to action on your site. You must make the process simple so that as many people as possible complete the process.
Qualifying Leads in the Funnel
Once you have a solid marketing campaign written up, you should pay some attention to how leads are qualified between each section of the funnel. This will make your funnel run more efficiently since your salespeople will identify qualified prospective customers more easily and go after them, instead of wasting their time following up with people who aren’t ready to go to the next part of the funnel yet.
Many who enter the funnel won’t reach the bottom, whether that’s from general disinterest, getting poached by another company, or not having the financial resources to actually make the purchases. Sometimes a promising lead won’t be the decision-maker for the interested party they represent, when doing business with other companies, for example. Lead qualification is generally separated into two categories, marketing qualified leads and sales qualified leads.
Marketing Qualified Leads
Otherwise referred to as MQLs, Marketing Qualified Leads is when a prospective customer passes a certain threshold you have put in place to gauge their level of interest. It’s when they show a level of engagement that hints, they have sales potential.
These only get more complex the longer your sales cycle but timeless ways of testing this is to leave the ball in their court and see how they respond. Forms and other interaction-based activities are great for this. You could even deploy marketing automation software that will tell you when they’ve opened a certain number of email messages from you, hinting that their interest may be more than casual.
Once MQLs have been identified, your sales team will want to follow up with them since that’s where sales are most likely.
Sales Qualified Leads
Also called SQLs, Sales Qualified Leads are where a salesperson has themselves qualified the lead. The criteria for qualification will vary from business to business. With SQLs your people will gauge the prospective customer on their level of interest and whether they’re the right fit for the service or product that the company is providing, which is usually measured against how much they resemble your company’s ideal buyer.
With these two variables, there are four possible combinations that leads will fall into. They are as follows:
Important Funnel Metrics
The last step in the funnel planning process is to determine how you’ll gauge its effectiveness. Here’s where your SQL and MQL data becomes important since you’ll want to track and establish patterns based on who purchases and who doesn’t, and how they interacted with your content. This allows you to optimize your funnel towards those who are exhibiting behaviors that buyers usually exhibit.
It's easy to get bogged down in data, so be careful and only focus on key performance indicators, or KPIs, that provide the relevant information. Choose the five most important and effective metrics and focus on them. You can always change gears if new data makes itself known that reveals you’ve been focusing on less effective metrics
Here are some common metrics that you may find useful:
And with that, you should have all of the information you need to make a competent sales funnel. You should want one since it affords you unparalleled control over what were once vaguely understood market powers like customer interest and retention. It’s not an easy thing to do and will take a continued effort from the business throughout its operation, but having an effective sales and marketing funnel will pay for that effort in dividends.
Now that we’ve gone through the theory behind every step of your sales funnel, the best we can do for you practical thinkers out there is provide some examples of these sales tactics working in the real world. We chose three examples of functioning sales funnels from successful businesses that you might recognize, so check them out below if you want to see all of the above information applied to your fellow companies.
You’ve probably heard of Groupon, the global online marketplace where you can find all sorts of service-oriented businesses in the fifteen countries where it still operates. When you first visit the site, you’ll have an unmissable pop-up appear at the center of your screen that gives you the chance to opt in to receiving emails about their service.
This pop-up strategy has been in place for a while and it’s evident that Groupon has had no trouble consistently growing its audience since first launching in 2008. So how does their sales funnel work? They get their traffic from the usual sources, whether that’s ads, referrals, affiliate programs, or just simple brand recognition. That pop-up we mentioned capitalizes on newcomers’ attention by offering the chance to save 70% off on deals.
So why does the pop-up work in this case? It’s obvious that the sales funnel hinges on that CTA opportunity when you first visit the site, but it requires giving out your email which many are cautious about. Given the nature of Groupon, however, it has strong potential for repeat business, and they’ve tailored the site to encourage that. They even target women more than men since they make a majority of their current customer base and are more likely to search for deals with spas and restaurants on a repetitive basis.
There aren’t any free trials with Groupon. As funnels go, it’s a pretty simple and honest one, the customers are either interested or they’re not.
Many who have been involved with businesses should have heard of MailChimp. It automates the marketing of a business, primarily through email management, so you can worry about other entrepreneurial distractions whilst MailChimp organizes and sends out your emails to interest parties.
It's freemium, so you can get a free plan, and the decision to add the free plan was successful in growing the business during its early stages since it got more people in through the door. They added a “powered by MailChimp” watermark at the bottom of all emails sorted and sent through their service. This meant that those who their clients did business with were also exposed to MailChimp, drastically increasing brand recognition.
That’s where much of the traffic comes from, as well as blogs that make mention of the service. From there, they brand themselves as an aspirational marketing tool, using emotive language about self-expression and company identity and freedom. This blows up the scale of their service since their marketing discourse is now on an ideas level rather than a product/service level, which has proven to be more persuasive in testing.
They want you to sign up for free at first and use the service, since that’s marketing in and of itself. Then, If you find yourself nudged towards their interactive pricing page, prospective customers then find that each plan has its features clearly lined out so you can see what you get from each.
This works because of the scale of their advertising network, with so many free users promoting the service to others with no overhead for the company. The interactive pricing page is something that you don’t see often, too, calculating the cost based on the number of subscribers you have to your email. It’s a simple yet sophisticated means of pricing their audience.
For our final example, let’s go with the one we’ve all heard of. Netflix is the most used video streaming service that requires a paid subscription, so they must be doing something right. Let’s delve into what that something is.
With around 73 million users a month, a visit to their website will reveal that it’s actually quite simple for such a gargantuan, successful company. The copy is minimal and to the point, and there isn’t even a set background. Instead, the background changes to movies or shows that are currently being promoted, rotating as newer material hits the service. What’s more, you can cancel your subscription without being locked into any sort of contract.
It should be fairly obvious where they get their traffic from. Most of it is brand recognition. Even when there are advertisements for Netflix, they’re more advertisements for the shows and movies that are featuring on Netflix, and the idea that you’ll pay for their service is a foregone conclusion.
From there you find the homepage and see that they offer risk-free trials that clearly show a timeline of when those trials will expire. This is great for the more non-committal subscribers out there who want to try the service without properly signing up.
It’s important they stress these risk reversal properties since it’s a recurring charge. Speaking of, they’ve included an FAQ section on the pricing page so all of your standard questions can get answered. They’ve craftily set the default paid plan to be their premium one, so new users have to consciously downgrade and change that in the settings should they want a different service level.
Payment is possible by most electronic means, including gift cards and PayPal. Information you’ve previously entered can also be changed in an easy and intuitive way. Netflix is a unique example because of just how ubiquitous it is. As we said before, we all know Netflix.