The Purchase Funnel
In this lesson, you’ll learn about the marketing and sales process, from awareness to advocacy.
The Purchase Funnel is also often referred to as the “customer funnel”, “marketing funnel”, “sales funnel” or “conversion funnel”.
The purchase funnel can be broken down into five stages (although multiple versions of the purchase funnel exist, some of them ending at purchase): Awareness, Consideration, Conversion, Loyalty and Advocacy.
– The shape, number of stages and duration of the process can vary depending on the consumer, the nature of the product and many other factors.
– Many different versions have been published, but the fundamental stages remain the same.
– A funnel shape is used as is describes the natural loss of potential customers at each stage: many people may be aware of a particular brand, but this does not mean they’ll purchase the product or advocate it.
The purchase funnel is a model which describes the theoretical customer journey from the moment of first contact with your brand to the ultimate goal of a purchase, and a customer advocating your product or service.
This model is important when marketing your business as it provides a method of understanding and tracking the behavior of an average customer throughout the marketing process. It can help with the following:
– Planning marketing campaigns
– Highlighting areas in order to improve your conversion rate (from potential to actual customers)
– Evolving the sales process
– Designing a customer relationship management (CRM) system
At the top of the marketing funnel is awareness. During this stage, prospects that are strangers to your brand and company learn who you are.
Awareness does not necessarily mean that the consumer must be able to recall a specific brand name, but he or she must be able to recall enough distinguishing features for purchasing to proceed. For instance, if a consumer asks her friend to buy her some gum in a “blue pack”, the friend would be expected to know which gum to buy, even though neither friend can recall the precise brand name at the time.
Goal:To build a deeper relationship with your customers, introduce them to your product/service and nurture them with relevant advertising.
Once a consumer graduates from the awareness stage of the marketing funnel, they enter the consideration stage. In the consideration stage, the consumer is willing to consider your company and products. They are interested in learning more about you.
Since you know more about your customer in this stage than you did during the awareness stage, you can send them, through advertising, more targeted messaging that addresses their specific pain points. By doing this, you’re demonstrating that you provide the solution to your customer’s problems.
Goal:To convince your prospective customers to purchase.
Decision time has finally arrived. Once your customers know the value of your product and you have educated them on the product itself, they are ready to decide whether or not to purchase.
At this point in your marketing funnel, you can start talking about why your product/service is better than your competitors’ and why it’s perfect for your prospect.
How to increase conversion:
– Focus on the benefits of the product/service rather than just explaining features
Goal:To retain your customers and instill loyalty by delighting customers with helpful content and great service.
Once a prospect becomes a customer, you may be tempted to move on to the next prospect. However, forgetting about your customers is a bad idea.
Unless you have a plan for developing customer loyalty, you’ll probably lose many of your customers, wasting a lot of your prior marketing efforts during the earlier stages of the funnel.
Goal:To turn your customers into fans who talk about your company and refer you to their friends.
Advocacy happens when your customers become something more than customers: they become fans. Not only have they purchased from you before, but they’ve probably purchased again or continue to pay for your services. And now they love you.
They tell their friends about you and brag about you on social media. Bringing customers to this stage of the marketing funnel is extremely valuable. Why? Because the most effective marketing is referral marketing. When your friend tells you a certain product is awesome, you are much more likely to purchase that product because you trust that person.
– Connect with your loyal customers
– Keep delighting your customers with good service.
McKinsey is one of the biggest players in the marketing consultancy world, and they believe the traditional purchase funnel could do with a few tweaks. The ‘traditional funnel’ is quoted as a five-step process as shown below.
1. It’s important to understand the trigger which causes a customer to start the purchasing process.
2. Your brand is just one of the products which the consumer is considering as part of their ‘shortlist’.
3. It’s important to pay attention to all customer ‘touch points’.
Prospects engage with companies at various points in the process, and each comes to the interaction with a different level of knowledge and interest. What was once a linear, guided process is now a complex, non-linear journey.
– The purchase process is more complicated than a traditional linear model describes.
– There are some new factors to consider when using the funnel in a modern context (such as social media).
– It’s important to understand the trigger which causes a customer to start the purchasing process.
Enlarged version of the image: http://bit.ly/2msNNI6