In marketing, a funnel represents the journey a customer takes (as a buyer) - the steps they take from first finding out about a product or service to making a purchase.
Like any other funnel, this one also works by “dropping” these customers at the wide end into the attention stage which then narrows to a sale.
This theoretical customer journey is the core of many marketing decisions for businesses. It’s because the way you connect to people changes depending on the current level of their buyer journey.
Types of Marketing Funnels
The most common type of marketing funnel happens in four stages:
Attention: A potential customer becomes aware of your brand through an ad, social media post, or word-of-mouth
Interest: They think you can be of some kind of value to them and want to learn more.
Desire: They conduct their research at this stage (related to your industry) and want to convert.
Action: They take action - which could mean making a purchase, registering on your site, signing a form, or whatever other action you may want them to take.
So now that we know what a funnel is, let's explore how it works in the marketing world and how the concept can benefit marketers.
How a Funnel Works
You may have wondered why the steps to conversion are called a “funnel.” It’s because many people are willing to take the first step of the buyer’s journey.
But as the process continues, more and more people will drop out, and the size of the audience will narrow down.
In other words, many people will show interest in your brand, but only a few end up converting into actual sales.
So, if you’re in charge of sales, it’s your job to keep the prospect engaged and invested throughout the process and try to retain as many customers as possible.
Now, this can be done in several different ways. You aren’t limited to using a funnel strictly with the end goal of getting people to sign a form or make a purchase. Perhaps all you want to do is retain website traffic and see how people move through your site.
Thus, a funnel can be used for various purposes - to track different processes in marketing or sales. And once you have the necessary data, you can then analyze what might be blocking that funnel and how to remove it.
The idea is to make the process as smooth as possible for your potential customers.
Why Marketing Funnels Are Beneficial
Marketing funnels provide us with access to valuable data, often collected in the form of a report. This data can then help illustrate where exactly you might be losing customers.
In other words, it can pinpoint the exact part of the process where customers might be losing interest or turning away from your brand. And as you learn about the variables, you can also learn how to tweak and shift them until they all work together in helping you retain customers.
For instance, if you’re losing a lot of buyers in the trial stage, then perhaps you need to update your guidance system so people know how to use the tool or else adjust the funnel so you can attract people from outside your target audience.
The funnel is an innovative method of tracking your potential customers in a business and learning how to guide them through the process better. The starting batch (of people) is likely to be very large, but the funnel will have filtered out everyone but your final customers by the end.
Understanding how a funnel works can also be the key to understanding your audience and what you need to do to hold their interest.