Marketing Funnels: How They Work and Why They are Beneficial

What Is A Marketing Funnel?

A marketing funnel is a method of dissecting the steps customers take when they are purchasing a product or service. As consumers, most of us complete this process on a regular basis. It’s the decision to buy a birthday gift, or to hire a contractor for a project. The point is, put yourself in your customer’s shoes and decide what action you want them to take while on your website. 

Your ultimate goal is for them to purchase your product or buy your service. That is what’s called conversion, and it occurs when customers go from entering your site to closing the deal.

A funnel is the process they go through before the conversion. You can add different actions into the mix, such as joining a membership program, or adding your e-mail address to a mailing list, but the steps below are standard for a purchasing funnel. 

  1. Identify need or want
  2. Visit the website
  3. Evaluate product
  4. Place in cart
  5. Buy the product

Why Is It Called a Funnel?

Why do they call it a funnel? At the beginning of the process, or the top of the funnel, there are a lot of people showing interest. As they move through the marketing steps, more and more people drop out of the process. The funnel gets narrower and narrower allowing only a small amount through at the bottom. Many consumers will take the first step, maybe the second step, perhaps even the third,  but only a fraction of that number will follow the process through to the end. For each action, the number of people completing the task will decrease. Ultimately it causes a funnel effect with the most interested buyers traveling the farthest down your funnel.

Have you ever heard someone say “widen the funnel”? They’re telling you to capture the interest of more people through advertisements and marketing campaigns so that an increasing amount of people will visit your site and enter your funnel. The more consumers you have in your funnel, the wider it will be.

The Benefits

Funnels aren’t just for obtaining a purchase. Funnels can also help you define where you are doing well, and where you are losing sales. You can see where the numbers drop and where you might need to bolster your efforts. Gather intel about how your customers work, expand your funnel allowing additional flow through the steps.

Funnels can provide information about your strong points and pitfalls. It aids in determining where you are losing your customers.  Knowing where you are doing well and where you are not, is the only way you can develop a plan to correct the problem. 

Creating A Funnel

To create a robust marketing funnel, you first need to understand the details of how your customers think and how they reach conversion. I recommend you define your goals and what you want your customers to do. For example, buy a product, contract for service, sign up for membership…it becomes fairly easy to outline the steps in the funnel once you identify your goals. 

John Dewey introduced the buying process in 1910, and it’s still the ultimate template for creating a marketing funnel. Here’s a more in-depth look at the purchasing funnel outline.

1. Customer Identifies Their Want or Need

The first step a customer takes is recognizing a desire or need. It can range from something as simple as an item they want, or something more complex, for example, to book a vacation. The recognition of a want or need will depend on what kind of company you have. This stage is significant because it’s when the buyer decides to look for products and services that you offer.

2. The Search 

Once a buyer establishes a need, they then research the issue and gather more information about all the possible solutions to their problems. This is typically when they land on your site, or have first contact with your company. The type of info obtained can range from:

  • Reviews
  • Recommendations 
  • Looking for coupons
  • Visits to a store for real-time demonstrations
  • Hitting up the search bar to discover their options

3. Evaluating the Product

After or during the information search, the customer will begin looking more closely at the product or service that fits their needs. They will want more information at this point. You can keep more folks on this stage by providing the extra information they are looking for to help them make a decision. Possibly a pricing guide, or an instruction video. You can lose customers in this step if they do not find the information they are looking for. This stage will have different complexity depending on the various products.

4. Deciding to Buy

This step occurs naturally once the buyer determines that your product or service is the solution to their problem. However, your job is not done. You can do some things here to encourage your customer to “pull the trigger”. Having product reviews or testimonials available can help reassure your customer that they are making the right decision. 

5. The Purchase

Conversion! This is where they seal the deal. The purchase has been made. Congratulations!  This customer has gone through all the steps and phases of the funnel. 

The process doesn’t end here. How they feel afterward is just as important as the process leading up to the purchase. Their word of mouth referral will bring someone new into the funnel and the process will begin again.  

Ask your customers for their feedback or a review of the product. Following up with them after the purchase will add to their confidence that they made the right decision. They will pass their experience on to the next person. Knowing how the customers think will help you create a funnel that caters to their needs at every step of the process.

Funnels aid in understanding how to appeal to your customer’s desires and needs. They have the power to direct more traffic to your products and services as well as convince them to make the purchase. 

If you have questions about how the funnels work in your business, call Connie Kroskin Consulting and we can assist you.

Contact Us today to get the answers you need.

 

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