Previously, we explored the basic marketing sales funnel that is an essential analytical tool for business owners, management as well as business, sales and marketing professionals.
In this post, we will introduce a new sales funnel for the digital economy. This article was first published on the Association of Small & Medium Enterprises (ASME) corporate website. Read the original article here.
Tradtional Sales Funnel
The sales funnel, also often referred to as the “customer funnel”, “purchase funnel”, “marketing funnel” or “conversion funnel”, is a consumer-focused model that illustrates the theoretical stages of a customer journey when interacting with a brand and, ultimately, purchasing a good or service.
The roots of the marketing funnel are seeded in E St Elmo Lewis’ AIDA model, an acronym that stands for Awareness, Interest, Desire and Action.
While there have been several variations and even reinventions to consider new technologies and changes in consumer purchase behaviour, the primary 4-stage funnel is still highly relevant for marketers to understand how consumers interact with their brand.
Regardless of the nature or set-up of a business, the most basic customer journey sees the customer go through four stages: awareness, consideration, purchase and advocacy.
The traditional marketing funnel is often depicted as shown in Fig 1.
Stages of the Tradtional Sales Funnel
In the awareness stage, the customer learns about your product or service through exposure to your brand.
The hope is that with awareness comes interest, and the prospect is curious to learn more about your product and whether it is something they need or want.
At this stage, the customer is evaluating whether she wants to buy your product or service. She might also be considering other options, including competitor products or even the DIY route.
At this stage, the prospect is becoming a customer by finalising the deal with you. The purchase is formalised by signing a contract or clicking the “buy” button. And, of course, making payment.
The customer’s journey should not end after making the purchase. You will want to move her from just a customer to an advocate (supporter and evangelist of your brand).
Advocacy is the stage where the customer is retained, and brand loyalty is built, so she comes back as a returning customer and skips the “awareness” or even “consideration” stages and moves straight to “purchase”.
Your after-sales service program and post-purchase marketing efforts are designed to keep her engaged with your brand. You want to focus on keeping her happy so that she returns as a repeat customer and becomes a brand advocate. Word of mouth is a powerful force, and no one can do it better than a happy customer.
NEW SALES FUNNEL FOR THE DIGITAL ECONOMY
While the traditional marketing funnel captures the theoretical stages of the customer journey, it may be a too simplistic representation for modern marketing.
The developed world is currently divided into roughly two halves – digital natives and digital immigrants. A digital native is someone raised in a digital, media-saturated world. A digital immigrant is an individual introduced to digital technology as an adult. Both types of people have vastly different learning requirements and think and process information fundamentally differently.
Digital immigrants may not find it easy to understand the complex interactions of digital marketing channels and online touchpoints. There can often be difficulty in communicating marketing plans across the digital divide, between digital natives and immigrants.
To bridge this gap, Evolve & Adapt, designed a new modified marketing funnel for the digital economy. This funnel better illustrates the customer journey and highlights the hybrid nature of modern marketing that consists of traditional (offline) and digital (online) marketing. It can help all stakeholders understand their brand’s marketing needs better, regardless of the level of digital savviness.
The new marketing funnel is illustrated in Fig 2.
Here are some key differences of the new funnel:
KEY DIFFERENCES OF THE NEW SALES FUNNEL
Hybrid Marketing is Factored in
The funnel is divided vertically in half so that both traditional marketing touchpoints and digital marketing touchpoints are considered. The fact is while the business landscape continues to transform digitally, a significant portion of business operations and activity still take place offline.
For example, in the awareness stage, on the traditional marketing side, these lead channels can include marketing efforts like word of mouth, referrals, newspaper, magazine, television or radio advertisement, event participation and flyers.
On the digital marketing side, the consumers might become aware of a brand through a Google search, a photo posted on Instagram by someone they follow, a sponsored story on their Facebook feed or a targeted email sent to them through an email list.
Time Spent in Each Stage is Factored in
The time a customer spends on each stage of the customer journey is not equal.
Very little time is spent on the awareness and purchase stages. It takes a short time for a customer to be exposed and aware of a brand. The actual purchasing of a product or service can be completed very fast.
However, customers will spend considerable time on the consideration and advocacy stages of the journey.
For example, in the consideration stage, on the traditional marketing side, a customer might spend time speaking with different sales representatives, visiting different stores to compare products or going through stacks of product literature.
On the digital marketing side, the customer may be gathering as much information as she can by scouring your website to read product descriptions or watch demo videos, looking for online reviews, following you on social media or asking friends or family for opinions.
This difference in time spent on each stage is reflected in the new funnel.
As the world continues to evolve digitally, traditional, digital and hybrid marketers can use this new funnel as a helpful visual reference when planning marketing activity and allocating resources at each stage of the customer journey.
If you would like a professional strategic marketing management consultant to analyse your sales funnel for the digital economy, contact Evolve & Adapt for a consultation call below: