The Funnel is alive and well. And it should be leveraged extensively by Marketers. It provides a consistent and universally understood (and somewhat accepted) framework. The funnel does come in a variety of shapes and sizes and colors – with different twists and turns. Despite this variety, few Marketers really leverage this powerful model.
The funnel enables Marketers to have an almost universally understood visual representation of various customer touch points, and makes it easier to track and score a person’s behavior. The Marketo funnel provides a good (although, not the only) framework and consists of six key stages:
Of course, each of these stages include multiple marketing tactics and scoring approaches.It’s important, though, to understand the difference between a contact (or a prospect) and a true lead (someone who has explicitly engaged with the company). Obviously, the relationship does not end after an individual becomes a customer. At that point, you can upsell or cross sell them.You can determine the value of a customer based on the different products they purchase, if they adopted your product sooner than others or if they are part of a referral program, etc.
As Seth Godin points out – “Customers are traditionally undervalued, and prospects are all treated the same.”Godin continues:“Once you see the funnel, it’s easy to understand how valuable your existing customers are, and easy to think about how you want to spend time and money in promoting and building your site. Most Marketers are running a flat campaign. Embracing the funnel changes the way you treat people. And treating different people differently is what consumers demand.”Having a model like the funnel and a good marketing automation tool enables you to measure and understand the cost of each interaction. Sharing this information with the rest of your organization helps build a Marketer’s credibility in a company, especially with the CFO.The funnel also provides a learning framework for Marketers to test out different messaging and creative at each stage of the funnel. This gives Marketers the option to fine-tuning his current program.Since I started my first big marketing job in American Express in 1992, I have heard lots of critiques of the funnel. Marketers love the catch phrases, such as ‘The Funnel is Dead.’ Well, I disagree. It’s advantages have has evolved since 1898 when E. St. Elmo Lewis developed a model which mapped a theoretical customer journey from the moment a brand or product attracted consumer attention to the point of action or purchase. (St. Elmo Lewis’ idea is often referred to as the AIDA-model – an acronym which stands for Awareness, Interest, Desire, and Action). Let’s address some of the funnel naysayers’ concerns, most of which apply to any marketing or sales model:
And then there’s the McKinsey Consumer Journey (see below) which attempts to demonstrate that the buying process is not linear and that several steps repeat themselves. For the real digital practitioner, however, it’s too simple to say someone goes from Bond to Buy:
While brands may put the decision maker, the Customer, at the center of the McKinsey Customer Journey, the above excludes the importance of the experience the Marketer and the company are having with the customers. Life is not all about the transaction. For example, at Marketo, our energy goes into building relationships with Marketers as well as connecting Marketers together. In addition, you don’t have to be a customer to recommend a product. I am probably the biggest promoter of Tesla, but I can’t afford one. I have only tried it via a Freemium ride provided by a neighbor and have read great reviews about it on Edmunds.com. Does that mean I can’t recommend the vehicle to others? Obviously not.
In sum, CMOs and their teams need to know that the funnel is alive and kicking. Rumors of its demise are greatly exaggerated. The Funnel is an easy to use, easy to remember approach to tracking individuals who interact with your brand – either directly or indirectly. It’s simplicity is what makes it special – and it provides the most universally understood way of thinking about an individual’s interaction with your brand. It works not only in a B2C environment, but also in a B2B environment. Marketers should always feel free, however to add their own creative twist on things and rename all or parts of it. Long-Live the Funnel.