What is a Marketing Funnel and Why Do You Need Them?

glasss-funnelWhen a potential customer lands on your website, what do you want that person to do? Of course you want them to be interested in your product or service, but then you should want them to take a particular action.

The action they take — signing up for a freebie, making a purchase, filling out a contact form, etc. — is called a conversion. Sometimes a prospect goes through a series of conversions before becoming an actual customer.

Your goal is to get some of your website visitors to buy from you, either immediately or after nurturing the relationship. And if you’re smart about your marketing, you’ll set up a process to strategically move the right visitors through the steps necessary to become customers. This series of actions and conversions are what make up a marketing funnel.

A funnel is widest at the top, ideally full of leads. And it narrows as potential customers get closer to making a buying decision. Fewer people will click, even fewer will opt-in, even fewer will open your emails, and even fewer will become buyers. The number of people who showed initial interest represent the widest part of the funnel at the top, and the narrow end of the funnel represents customers.

Marketing funnels are based on business goals, and you should set up your funnels according to the steps you want visitors to take — how you want them to flow through your website and sales process. There are many types of funnels; the way you set up your funnels will be based on anticipated behavior and adjusted according to the behaviors you track.

For example, if you are selling a high-ticket complex product or service, the buying decision may require a lot of nurturing and development of the relationship. If you’re selling a lower-priced consumer good or entry level item, your funnel might be set up to encourage an impulse buy. You might also want someone to make a lower-level purchase that will lead to recurring revenue or a greater investment in the future.

Now let’s take a look at how a funnel flows.

Entering the funnel

Your marketing campaigns and lead generation activities should raise awareness about your business and drive traffic to your website through advertising, SEO, social media, and other efforts. The prospective buyers who are driven to your site through lead-generation activities have recognized that they have a problem or need and they’re searching for a solution that you can provide. They stick around and enter the funnel.

But some visitors will click away without doing anything else, possibly never to return — some are lookie-loos and some hot leads that you failed to capture. These non-action-takers have dropped out of the funnel, narrowing your pool of potential leads.

Moving through the funnel

Some of the people who visit your website will want what you have to offer, and you’ll capture their interest well enough for them to move to the next phase of your marketing funnel. They may choose to opt-in for a freebie, and then it’s up to you to direct them along a path, deeper into the funnel, by nurturing the relationship. At this stage they’re interested, but they are also gathering and processing more information, and possibly considering alternatives to choosing you. Here, in the middle of the funnel, your job is to provide more educational resources, which are targeted to their potential objections, and attempt to persuade them to move ahead.

Much of the buzz around sales and marketing funnels focuses on the middle of the funnel, because it is often neglected. Adding a well-crafted automated follow-up sequence (also known as a nurture sequence) to your marketing can make a world of difference in turning a lead that you would have lost into a customer.

Gaining new customers

The final stage of the funnel (or sequence of funnels) is the a buying decision. At this point, you have to help the prospect feel as confident in the decision as possible. Here, at the bottom of the funnel, you should provide concrete facts and evidence to set their mind at ease. You may also want to make it clear to the prospective buyer why a timely decision must be made. For example, state that you are running out of inventory, that the price is going up soon, or that the service package is going away.

Finally, it’s critical to minimize confusion when it’s time for the prospect to make a purchase. You want them to take a particular action, so make it perfectly clear and easy for them to buy.

Congratulations! Your marketing funnel delivered a new customer.

It’s important that you pay attention to how your funnel performs. Continuously focus on moving prospects from one point in a funnel to the next, or to understand why they chose to exit the funnel along the way. This will help you make informed decisions about your marketing.

Do you need to widen your funnel by attracting more traffic and leads? If so, what’s the best route — a new target market, different messaging, more advertising?

Do you need to better optimize your funnel by enhancing your nurture sequences with richer information or providing more compelling case studies and testimonials?

Are you making a pitch too early? Or should you shorten the steps to purchase by offering something for sale sooner in the relationship?

Is your funnel leaking at a particular stage? And are you following up appropriately to fix those leaks — providing more education, answering questions, asking questions, addressing objections, or showing up consistently in their inbox to build trust?

Is the buying process confusing, so prospects get all the way to end of the funnel, only to find too many choices, or no clear incentive to buy now versus six months from now?

Mapping out and monitoring your funnel data provides the structure and insight you need to better understand what’s working and what isn’t in your marketing. This valuable information will help you adjust and tweak your marketing efforts where needed.

Want help creating and automating your marketing funnels? Give us a shout!

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