September 9, 2022
Liam Erwin

What is a Marketing Funnel? How Can it Transform Your Business?

Most of us might have heard of a Marketing Funnel before, sometimes referred to as a Sales Funnel, but what is it? More importantly, how does it impact your business?

Outside of the quality of the product or service your business provides and the subsequent demand for it, the marketing funnel is the most critical factor in revenue growth for a company.

A marketing funnel is the visual representation of the buyer journey and the path your customer takes from the moment they first engage your product to the moment their credit card swipes at the cash register and your company receives payment. 

Without an effectively optimized marketing funnel, you or your company has little insight into how many consumers are aware of your product, how many prospects are you losing out on in the process, why aren't they converting, identify lead-cost ratios to determine where your valuable marketing & advertising budget will be best spent.

Additionally, having an optimized Marketing Funnel allows your company to retrieve valuable data on how you can increase revenue, customer conversions, retention, improve your go-to-market strategy, improve future product launches, and so much more. 

 In order to understand a Marketing Funnel, it's essential to have a basic understanding of the buyer's journey or the steps it takes for most modern customers to make a purchase.

The buyer's journey consists of 3 main stages a prospect or lead goes through are:

  • Awareness - The individual becomes aware of your product, service, or that they have a problem
  • Consideration - The individual considers how your product will solve their problem and its cost/value ratio
  • Decision - Depending on the urgency of the problem and whether or not the individual is confident in your company or solution, they will decide whether or not to move forward.

So how can we utilize this information to our advantage as Business Owners, Digital Marketers, & Salespeople?

By keeping the buyer's journey at the forefront of our Marketing Funnel, we can capture the most amount of conversions while providing the most positive experience to generate repeat & referral business.

For the most common type of Marketing Funnel used today, the buyer's journey is further split into four main steps:

1) Attention: 

  • Capture the individual, prospect, or lead's attention
  • It is critical to provide unique & straightforward value propositions that make you stand out during this stage. The modern consumer has a short attention span and evaluates many options before purchasing.

2) Interest:

  • Develop interest through solving a problem or providing the individual with significant value
  • In this stage, we provide the customer's the core features & benefits your solution has, its use cases, and what specific problem(s) it solves.

3) Desire:

  • The customer has confirmed their desire & that your company solves this problem, though they might be deciding on a particular option, be stuck on pricing, or waiting for a future time.
  • Here we can upsell, bundle, or provide discounts/promotions to guide the customer to the best product or deal to help them move forward with their decision.

4) Action: 

  • The customer takes action by booking a meeting, demo, trial, or purchasing your product.
  • It is crucial to ensure this step in the process is as easy as possible in this stage. If your customer leaves with products still in their cart or gets buyer's remorse and decides not to purchase because it's too complicated, you don't get paid, and that whole marketing budget is wasted.

In conclusion, a Marketing Funnel is the visual representation of how your company guides a new individual through the buyer's journey to making a purchase. It is one of the impactful parts of a business on its overall success because it plays a huge role in revenue generation, customer conversion, customer retention, and even consumer awareness.

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