What is a Sales or Marketing Funnel?
How to divide the sales process into separate stages so that it can be better managed and evaluated? And as a result - to improve sales efficiency.
The sales funnel is nothing new. The year 1898 is considered its birthday, when the advertising lawyer Elias St. Elmo Lewis formulated the AIDA marketing model (attract Attention, maintain Interest, create Desire, support Action).
What is the AIDA model?
AIDA is a hierarchical model based on the assumption that consumers/buyers, when making a decision, perform a series of actions - cognitive (thinking) and affective (feeling) actions / stages, which end with a specific action - purchase, trial, etc.
The steps/stages of the AIDA (Attention / Interest / Desire / Action) model are as follows:
- Attention/awareness – the consumer has general knowledge about the specific product, service or brand;
- Interest – the consumer becomes interested in the specific brand, product or service. It is defined in the mind of the consumer as a possible choice and is studied and compared with other similar products and/or services;
- Desire – the consumer develops a favorable attitude towards the brand, product or service. It becomes what he thinks is the best choice and the consumer wants to have it;
- Action – the consumer buys the specific product or service.
In other words, advertising acts as a stimulus - it informs about, creates interest, promotes research (creates desire) and a purchase is a response to this stimulus.
On the way to purchase, consumers go through the stages of Cognition (awareness / learning) → Affect (feelings / interest / desire) → Behavior (buying / trying / using / sharing information ...).
Sometimes this sequence is also defined as Learning → Feeling → Action.
The AIDA model provides a detailed understanding of how the attitude of the target audience of a brand, product and/or service changes over time towards a specific offer and provides insight into which advertising messages could be more effective at each stage. Respectively, it helps the marketing specialist:
- Segment the target audience according to their level of engagement (readiness to buy);
- Prepare advertising content that is as accurate as possible for each segment (which contributes to the maximum number of consumers reaching the next stage);
- And as a result, the conversion of interested people into buyers and the conversion of buyers into loyal consumers of the brand who already make regular purchases.
This process is also called the Sales or Purchase or Marketing Funnel - when a relatively large number of potential buyers learn about a product or service or brand, a smaller part of consumers become interested in it, an even smaller part want to buy, and in the end only a relatively small number make a purchase share of consumers (about 1 to 2 percent of site visitors).
That is, sales is viewed as a process divided into separate stages.
What are the advantages of this?
By breaking down a complex process into its components, the solution usually becomes simpler and often more obvious (also easier to evaluate and, subsequently, easier to improve).
According to this model, the seller's tasks at each stage of engagement are as follows:
- Stage – Provide attention;
- Stage – Keeping attention by creating interest;
- Stage – Awaken Desire;
- Stage – Create confidence and faith.
- Stage – Facilitate decision and ensure action;
- Stage - Create satisfaction with the purchase.
Types of sales funnels
Every seller (company, craftsman, self-employed) uses a sales funnel.
But maybe call it something else.
Let's take an example of a local flower shop without a website:
- Attracting attention - visible from afar and abundantly loaded with flowers;
- Arousing interest – a friendly greeting and conversation with the seller;
- Creating a desire - "highlighting" the flowers, the seller's story about how happy and grateful the flower recipients are for the attention shown and relevant examples "from life"...
- Action - You buy to please someone or "apologise" for something...
- Loyalty – the buyer tells others about this flower shop and praises both the responsive seller and the wide selection of flowers, etc.
That's the beauty of the sales funnel – you can use this concept even if you don't realize you're doing it.
But if you consciously control it, measure it and, based on the obtained results, try to improve the efficiency of each stage of the funnel - the results will be much better.
Sales funnels tend to be different - the stages of buyer engagement do not change in essence (everything always starts with attracting attention, followed by creating interest...), but the level of detail, marketing methods and means to achieve the best result differ both for each stage of the funnel and according to the desired behavior (purchase, signing up for a trial, signing up for e-mail news, etc.).
Here are some examples of sales/marketing funnels:
- Possible Digital Marketing Funnel (goal - conversion promotion):
- Attention – the customer recognizes the specific brand, product or service;
- Interest – the customer engages in online activities to learn more – to find out/consider whether a particular brand, product or service meets his needs better compared to others of a similar nature;
- Desire creation (remarketing) – an attempt to re-attract the customer so that he reconsiders the relevance of the brand, product or service to his needs;
- Action (conversion) – the customer performed the desired action for the first time – buys a product or service, applies for a trial, etc.
- Loyalty – the customer makes regular purchases and/or shares their positive experience online.
- A possible social media marketing funnel (goal – to convert people who recognize a particular brand, product or service into buyers and/or advocates of that brand, product or service):
- Awareness - attract potential customers to your social media accounts;
- Desire creation – publish positive examples of product/service use (success stories/how a customer's problem was solved), remarketing campaigns within social networks, surveys with free samples in prizes, etc.;
- Action - make it easier to make a purchase decision, for example with time-limited special offers (free delivery for purchases over ..., only until ..., a gift for all purchases today, etc.);
- Loyalty - maintain contact with the customer so that your brand, product or service remains in the center of his attention and, if necessary, he considers them as the first choice (offers of related products, other special offers in e-mail, etc.);
- Advocacy – provide the most ideal customer service and after-sales service to create customer trust and recommend your brand, product or service to others.
- Possible E-mail marketing funnel (goal – to create an e-mail database, promote sales and customer loyalty):
- Attention. The aim – attract as many subscribers as possible. How to? – Offering the consumer quality content or the opportunity to download something useful for them (lead magnet) in exchange for an email address. Where? – in social networks and everywhere else where the target audience of the product or service is located;
- Promotion of interest. The aim – to help potential customers interact with a brand, product or service. How to? - I will send a "great" congratulatory e-mail (as a response to signing up for company/product news), which gives an insight into the expected "goods" for him as the recipient of your e-mails. By creating an automated marketing offer, sending industry insights and other useful content to his email. Tip - unsubscribing at this stage shows that your offer is not interesting for the particular person;
- Consideration. The aim – Providing information about a product or service. How to? – sending decision-supporting information, but (if possible) allowing the customer to choose the specific topic and frequency of receiving emails. Tip – Focus on the benefits, not the amount of features. Make sure these benefits match the needs of potential customers (target audience profile / to the person of the buyer);
- Purpose. The aim – identify potential customers who are interested in the offered product or service, then send them detailed information about the specific product or service. How to? – conducting a survey (for example, with a Google form about the most important features of the product and service from the customer's point of view, the most convenient delivery methods, etc.). Tip – For complex products, it would be good to prepare a series of emails that gradually explain the benefits of the specific products or services;
- Evaluation. The aim - promote the adoption of a purchase decision in favor of the offered product / service. How to? – emphasizing the unique characteristics of the product/service, showing/explaining what makes it better than other similar ones;
- Action. The aim - Facilitate the conclusion of a purchase / transaction. How to? – preparing a limited-time offer only for subscribers (for example, a discount, a gift or additional functions, etc.). Tip – the offer should be as clear/concise as possible with a clear and prominent sign CTA;
- Relationship. The aim – Drive repeat purchases (CLV). How to? – serving the customer in the best possible way, providing the most convenient after-sales service, sending special offers available only to him, asking for feedback and suggestions for product / service improvement, etc. Tip - Don't send too many offers - each offer should have a visible value.
- Loyalty and brand advocacy. The aim - to acquire new customers, based on the recommendations of existing customers. How to? – creating a loyalty program, asking your customers for feedback and rewarding them with small gifts, etc. Tip – Make customer loyalty a strategic goal of your social media.
How to create the most appropriate marketing funnel for a given product or service?
The answer is simple – by asking the right questions:
- Attention – How can we inform potential buyers about our products or services (those who fit the target audience of the product/service but do not yet know about us)?
- Interest – How to make them interested/make them consider our offer (as a possible solution to their needs/problems)?
- Desire – Why should they choose our product or service instead of a competitor's?
- Action – How can we convince them that this is the right time to buy?
- Loyalty – How to organize the purchase process and post-purchase communication with the customer so that he is maximally satisfied both with the product/service and with us as its manufacturer and/or seller?
What digital marketing tools to use at each stage of the funnel/engagement?
Some marketing tools/tactics are more effective for attracting attention, others for creating interest, still others for persuading to make a purchase right now.
Generally, depending on the stage of engagement of the potential customer, use:
- Display ads;
- Social media marketing;
- Paid advertising on social media;
- Video marketing;
- Influencer Marketing;
- Content Marketing.
- Unique selling proposition;
- Success stories;
- Webinars or seminars;
- Email marketing;
- Social media marketing.
- Email marketing;
- Product descriptions;
- Product demonstrations;
- Webinars or seminars;
- Social media marketing.
- Simplifying the checkout process;
- Product visuals;
- Product descriptions;
- Online chat;
- Reminders for pending purchases;
- Improving site loading speed;
- trial offers;
- Money back guarantees.
- Loyalty programs;
- Email marketing;
- Customer remarketing;
- Promoting the publication of reviews and experiences on social networks;
- Small free gifts;
- Special offers on birthdays (Christmas, etc.);
- Personalized/funny order confirmation messages.
How to measure results
Each stage of the funnel uses different metrics to evaluate/measure performance/effectiveness KPIs or metrics.
The following metrics are most commonly used in digital marketing:
- Number of e-mail subscribers;
- Number of opened emails;
- E-mail CTR;
- Downloads of e-books and other materials;
- Number of registrations for webinars/seminars;
- Number of webinar/seminar visitors;
- Video playback time;
- Average time spent on the website/page;
- Average page scroll depth;
- Bounce rate (not always).
- Study of product-related website pages (number of visitors to the product page and time spent there);
- Average scrolling depth of product-related website pages;
- Downloads of e-books and other materials;
- Number of questions related to the product.
- Number of trial/demo requests;
- Number of trials/demonstrations actually performed;
- Number of transactions made/paid;
- Average purchase amount;
- Purchase fee.
- Customer retention rate;
- Customer Lifecycle Value;
- Average number of purchases made by one customer;
- Frequency of purchases;
- The number of reviews and comments (as a percentage of the number of existing and/or new customers);
- The number of completed questionnaires in customer surveys (as a percentage of the number of questionnaires sent out).
The behavior of each funnel stage will always depend on the higher/previous stages. Respectively – the more potential buyers will be "pulled" into the first stage of the funnel, the more of them have the opportunity to reach the second, third, fourth ... stage.
The more website visitors reach the Action and Loyalty stages, the more you will earn.
If one of the stages of the sales funnel is not working, it is possible that the reason is as follows:
- Attention. If there is a small flow of visitors to the website - either your advertisement or the product/service itself, those who are reached by your advertising activities are not bound. Focus on improving your traffic sources (advertising, SEO) and maybe review your product/service positioning and target audience;
- Interest. If the website has a large number of visitors, but they leave it quickly - the content of the website does not meet the wishes/needs of the visitors and therefore it is not interesting for them. It is necessary to change the content of the website, for example - the way of presentation of products/services (descriptions, visual materials, etc.). Or you need to change the site's advertising tactics - to make sure that the target audience of your offered products visits the site, not those who are not interested in your products/services;
- Desire. If the product/service pages have a large number of visitors, but they do not move to the next stage of the funnel – Your product/service descriptions (or the products/services themselves) are not convincing/compelling/interesting enough. It's possible that product features/uses are being described that site visitors don't care about/don't solve their problems (or that description of "how their life will change after buying the product" is absent or incomplete). It is also possible that the desire to buy has been "killed" by overly active/intrusive "selling";
- Action. If the website has a large number of visitors and the visitors spend a long time there, but there are no sales, the product/service is not interesting for those who visit your website, or the sales process is bad. Review your offer and its value to your website visitors. It is also possible that the website is not visited by your target audience, but by completely different people. Review your sales tactics - people rarely buy using the first offer, if there is no follow-up supporting offers, the number of buyers may be very small;
- Loyalty. If the number of repeated purchases is small or non-existent - either the product/service did not solve the customer's problem or it was of poor quality, or the sales process was unpleasant for the buyer (attitude, broken promises, problems with delivery and/or after-sales service, etc. ).
That's all for now, good luck!
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