Funnel marketing is all about understanding the customer’s journey from the moment they show interest in a product or service, until after they have made a purchase…and often, beyond.
Using a well-thought-out marketing funnel is essential for developing strong marketing and sales strategies.
In this article, we’ll take a deep dive into the marketing funnel process. This will include what exactly the term “marketing funnel” means, the five stages encompassing this concept, and a breakdown of how to create your own marketing funnel (using the TOFU, MOFU, and BOFU methodology).
We’ll also look at qualifying leads, what metrics to track and why.
What Is a Marketing Funnel?
A marketing funnel represents a customer’s route to conversion. It is a roadmap that a company creates to guide a customer on their discovery and purchase journey. Marketing funnels break this journey down into different stages.
It’s called a marketing funnel because the model takes a funnel shape.
The top of the funnel is the widest point, representing the largest pool of potential customers. The bottom of the funnel is the thinnest, representing the actual customers who make a purchase.
This is an incredibly useful tool for businesses to optimize their marketing and sales processes to fully grasp the customer’s journey from when they show interest to the actual sale.
Having a clear understanding of the customer journey and optimizing the marketing and sales process allows businesses to:
- Drive more sales
- Increase brand awareness
- Create stronger customer loyalty
Five Stages Of A Marketing Funnel
Let’s take a look at the five marketing funnel stages. These five stages cover three major locations in the marketing funnel, which are:
- TOFU: Top of the funnel (1. awareness)
- MOFU: Middle of the funnel (2. interest, 3. evaluation)
- BOFU: Bottom of the funnel (4. commitment and 5. sale)
At each of these stages, the customer is experiencing something different with the business. Here is a brief look at what the customer experiences in these different stages:
The prospective customer has a problem, they are aware of it and are looking for a solution
The prospective customer shows an interest in products available
They consider their different options and compare products
They decide which product is best for them
The prospective customer converts into a customer and makes a sale
This is the basic idea behind the different stages of a marketing funnel. Let’s break these stages down into more detail.
Stages Of The Customer Journey To Purchase
Stage One: Identify a Need or Problem – TOFU
The first stage in the customer journey is identifying a need or a problem. This is the starting point for any buyer’s journey.
During this first stage of the marketing funnel, the business needs to bring about awareness of its products or services. The business isn’t trying to get the prospective customer to make a sale straight away. Instead, they are simply highlighting the prospect’s problem and making them aware of a potential solution.
A great way to achieve this is to publish helpful content that the prospective customer will discover, like this very blog article. This content should make the customer aware of their problem, and perhaps even spotlight your business as a solution.
For example, let’s say the prospective customer is looking to invest in email marketing software for their business. They might start their journey by searching for something along the lines of “how does email marketing work?”.
At this point, the prospective customer is not actively looking for email marketing software to purchase. Instead, they want to find out more about how they can create an email marketing strategy and if a solution exists for their problem.
Email marketing software businesses should be publishing content that matches this intent.
For example, they could write articles about the problems businesses face without a solid email marketing solution in place, or what type of email marketing metrics businesses need to monitor for successful results.
This content could be published on social media or as blog posts. The important factor is that the content is informational (it teaches and informs about a problem) and not commercial (trying to sell).
Ironically, people desperately want and need solutions to their problems, but heaven forbid you put a solution in the inbox. Oooh, that’s icky!
Today, people want to discover solutions in a more relaxed and trusted fashion, usually by doing their own research in Google.
A targeted, well-researched and unique blog article can make the customer aware of their problem (they need to find the right email marketing solution), which moves them into the next stage of the marketing funnel.
Stage Two: Research to Find More Information – Middle of the Funnel
The prospective customer has identified their problem, so now they need to start looking for a solution. To do this, they will need to learn more about their problem and discover what kinds of solutions are available.
At this stage of the marketing funnel, the business needs to publish and share more helpful content that talks to the prospect about their pain point. Their aim isn’t to say “buy this” just yet. Instead, the business should be saying “we understand your problem, let’s look into it a little deeper”.
This is where having a solid content marketing strategy is important. Businesses should be writing blog content, creating YouTube videos, podcasting, actively posting on social media, and doing anything else to share helpful, valuable content about their customer’s problems.
Being too pushy for a sale will not be helpful here, as the customer is not ready to give you their business just yet. Instead, they are looking to learn and hopefully build some trust in a brand that seems like an authority on their problem.
Stage Three: Compare Options – Lower Middle of the Funnel
In any digital marketing funnel, this is the point where you start to actively promote your products and make it clear why they are beneficial to your customer’s problem.
Let’s go back to the email marketing software example.
Here at the BOFU, the prospective client knows what type of email marketing software they need for their business, so they would search for something along the lines of “best small business email marketing software”.
This type of search term has a higher commercial intent. The prospect is looking to make a purchase, they just need to find a suitable product.
Your business should be promoting marketing content about specific products and why they are the best. This stage of marketing should highlight the benefits, features, and overall value of each product.
A major part of this stage of the customer journey is building trust. Some useful ways to do this include:
- Displaying customer reviews about your products
- Displaying positive testimonials about your products
- Trying to promote user-generated content and social proof
- Creating content that shows how your products can be used in real life
Or any other information to illustrate why your product is the best option. This could include things like your email solution being easy to manage, or the fact that successful companies use your email marketing software.
Stage Four: Moment Of Truth – To Purchase Or Not To Purchase
Next, it’s time to turn your prospective customer into a paying customer. This is when we reach the bottom of the funnel, the BOFU.
At this stage, the prospective customer has all of the information they need to understand their problem and identify which product is the best solution for them. Now, it’s just about getting the customer to follow through with making a purchase.
An important part of this stage is optimizing your pages for conversions. You want to make it as easy as possible for the prospect to go through with the sale.
Some best practices include aspects like:
- Having minimal form entry requirements
- Special offers like waiving the signup fee
- Optimize your product pages with trust badges and positive testimonials
Many prospects might abandon their carts at this stage. If this is the case, businesses should have cart abandonment strategies in place (like automated emails and special offers) to help bring the customer back.
Strategically timed exit-intent popups can also make a big difference in increasing conversion rates.
Stage Five: Post-Buying Activity
The customer has made a purchase – success! While your goal (making a sale) has been achieved, the customer journey does not necessarily end here.
The bottom stage of a marketing funnel is focused on customer loyalty and increasing the value of each customer. Your goal is to get that customer to refer to your business or buy from you again.
This is important because it can be five times cheaper to get an existing customer to make another sale than to funnel a brand new prospective customer.
In order to achieve this, you could use incentives to encourage the customer to make another sale or a referral. Here are a few strategies:
- Offering a discount coupon for a repeat purchase
- Recommending new products that compliment the customer’s initial purchase
- Providing an incentive (like a discount) for successful referrals
- Running a loyalty program or affiliate links for existing clients
- Providing special offers to existing clients, like free shipping or free products when you spend a certain amount
Adding existing clients to a different email marketing list and targeting them with customized content is always a great strategy.
How To Create Your Own Marketing Funnel
Creating a marketing funnel for your business is relatively simple. You can use the five steps above to form the basis of your marketing funnel template.
Plan out your customer journey, and understand how you will target prospective customers at each of the different stages with the right content. Then, create specific goals and KPIs to monitor each stage of your marketing funnel.
Drawing the marketing funnel out is a great way to start. This helps you gain a clearer picture of the whole customer journey.
Here are a few strategies to use when creating a marketing funnel for your business.
At the top of the funnel, your goal is to attract targeted website visitors and leads with relevant content. This should include broad, educational, and information content topics. Your aim is to provide value to the user through your content, and not sell them something straight away.
Some of the most effective ‘top of funnel’ marketing strategies include:
Segment your mailing list to ensure that you have a list of new prospects. Target this list with relevant email content.
Social media is one of the best marketing strategies to bring about brand awareness and send traffic to your website. Share helpful, interesting content with your target audience. Ask questions, post solutions to common problems. Primarily, your aim should be to start conversations.
Focusing on SEO is essential. This includes blog content, but it can also include YouTube videos. The goal is to target broad keywords with informational intent (not commercial intent), provide useful content, and optimize this to rank well in search engines. Businesses can use an SEO company to help them achieve this step.
As an adjunct or alternative to SEO, paid advertising(pay-per-click ads) can quickly reach an audience and target very specific audience segments. The downside? You have to pay for your traffic, and your website instantly disappears the second you stop paying for your ads.
Influencers and user-generated content
Getting other people to post about your brand to their audiences is a great way to maximize brand awareness, and get exposure to a wider audience.
Businesses can use traditional PR to get media coverage to bring about top-of-funnel awareness. It’s getting harder and harder to find professionals in this space, but if you find a good one, they can be an excellent complement to a digital marketing strategy, adding yet another touch-point.
At the middle of the funnel, your goal is to convert prospective customers into leads and prepare these leads for conversions.
It is vital that you target leads with more strategic content that goes beyond awareness, and dives deeper into how your products and services can add value to their lives.
Some of the most effective “middle of funnel” marketing strategies include:
Targeted lead magnets
This may include freebies/leverage that will help you capture lead information (for example free trial subscriptions, free consultations, etc.)
To share your knowledge and make your brand an authority in your field.
To display your expert knowledge and provide live guidance and insights to prospects.
Free demos and trials
This is an excellent way to get your prospects to understand your products and services better and see how this can add value to their lives.
At the bottom of the funnel, your goal is to get leads to make a purchase or get existing customers to repurchase.
Some of the most effective “bottom of funnel” marketing strategies include:
Product page optimization
This is effective in that it helps to rank your website’s product pages highly on Google for relevant keywords. In order to encourage visitors to click on links, try to optimize your content.
Create a sense of urgency
Add a countdown timed special offer, display the units available or show how many shoppers are looking at the product.
Provide discounts, free shipping, and any other special offers to motivate a purchase.
Offer discounts on relevant product bundles.
Upsell and cross-sell
Try to increase the value of each purchase by upselling and cross-selling your products.
Qualifying Leads In Your Marketing Funnel
As your leads progress through your marketing funnel, they advance from marketing qualified leads to sales qualified leads. Leads at different stages require different nurturing approaches.
What are Marketing Qualified Leads (MQL)?
A Marketing Qualified Lead (MQL) is a prospect that has shown interest/interacted with your brand. They may have added items to an online shopping cart, voluntarily submitted contact information, visited your site repeatedly, and/or opted yes for receiving a newsletter.
They are considered as ‘promising leads’.
What are Sales Qualified Leads (SQL)?
A Sales Qualified Lead (SQL) is a prospect who has moved through the marketing funnel and has entered the sales team’s pipeline. These leads are ready to make a purchase, either your product or someone else’s, and now it is the sales team’s task to convert them into an active customer.
Marketing Funnel Metrics To Track
Keeping track of the various metrics at each stage of the marketing funnel is vital to understanding the progress of your prospects, and how you can improve tactics to increase your chances of conversions.
Top of Funnel Metrics
Your web traffic, or the number of visits to your website.
The percentage of your web traffic making their first visit to your site.
The number of web visitors who left your site without taking an action (bounce) compared to the number of visits.
Traffic per channel
How much web traffic each marketing channel is bringing in.
Middle Of Funnel Metrics
Visitor-to-lead conversion rate
How many website visitors provided their information to you and became leads.
Mailing list growth
How many leads you are able to capture over a period of time.
Email marketing metrics
To measure the success of your email campaigns, the most common metrics include your open rate, click-through rate, and deliverability.
Bottom Of Funnel Metrics
How many leads turn into customers.
How many sales your funnel is generating.
How many new customers your marketing funnel generates compared to existing customers.
The art of a marketing funnel entails taking a strategic, planned approach to the entire customer journey.
Without designing a marketing funnel blueprint for your business, you may not be able to understand where your prospects are in their journey and what you need to target them with in order to turn them into a customer.
By carefully planning your marketing funnel, you will have more control over the customer journey. This will allow you to streamline the buying process, helping you turn more leads into customers.