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What Is A Marketing Funnel? A Step-By-Step Guide!

Summer Nguyen | 09-28-2020

What Is A Marketing Funnel? A Step-By-Step Guide

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What if I say that you’re in the marketing funnel of a brand, do you believe?

Not you but everyone at least in one marketing funnel of a business. Furthermore, the moment you read this post, it means that you have stepped into the first stage of our marketing funnel before realizing that.

From a business perspective, it can be frustrating when you try to reach your target customers but have no idea how to do that. Of course, everyone can be a seller but to become a successful business with sustainable growth is never easy.

The marketing funnel, a marketing structure to do your business more effectively and efficiently is what you need.

In this post, we will discuss around marketing funnels along with a step-by-step guide to create one and apply it to your business.

Table of contents

What is Marketing funnel?

What is Marketing funnel?
What is Marketing funnel?

A marketing funnel is a model that illustrates the path a prospect goes through from brand awareness to purchase decisions and even the post-purchase stage.

This model provides marketers with detailed insights into leaders’ behavior, which gives them more hints on how to close the deal and build relationships with buyers.

Still find it confusing? Let’s take some examples.

Below will be some negative situations you can relate to your business on a customer’s buying journey:

  • You have a great website with excellent products, but people are not aware of your business
  • Your web receive a positive amount of traffic, but the revenue’s still low, or visitors don’t take any action
  • Visitors start engaging with your brand, but lost interest and never come back
  • Your customers take action, even add their wanted items to the carts then abandon it
  • Customers only buy from your store once

Each situation belongs to a stage of the marketing funnel. What the funnel can do is to help you structure your customer’s journey through different channels so you could deal with each problem that makes the sales fail.

A well-crafted funnel allows you to identify when and where you can interact with your customers to create non-stop engagement. Optimize your marketing efforts and develop tailored plans for each stage of the funnel.

You will need to use multiple marketing tactics to keep visitors engaged continuously with your brand to a point when the purchase decision is made and beyond.

Read more:

What is B2B Marketing Funnel and How Does it Work?

What is B2B and B2C? Differences between B2B and B2C

Understanding the stages of a marketing funnel

Today, there are several approaches in the world of modern marketing when it comes to the marketing funnel.

There’s not a specific and perfect model.

The marketing funnel’s definition is just the base so that you could understand and create the funnel that fits your business perfectly. The number of marketing funnel stages depends on your approach and, mostly, your customers’ behavior. That’s why the marketing funnel demonstrates a buyer’s journey.

2 Common approaches are:

  • The AIDA model (the traditional funnel)
  • The modern marketing funnel

Traditional marketing funnel

If you’ve learned or cared about Marketing, you must have heard about the AIDA model, which identifies cognitive stages individuals undergo during the buying process.

Typically, AIDA is used as the fundament of sales and marketing funnels as both of them are based on the same theory. That’s consumers move through a series of stages before they eventually buy a product or service.

Based on the AIDA principle, a primary marketing funnel looks like this:

  • Attention: Customers are made aware of the brand and its products. Typically, this awareness comes mostly from advertising.
  • Interest: Customer interest grows, and prospects learn more about the benefits they could receive from the brand, products and how it fits with their lifestyle
  • Desire: After the consumer is interested in the product or service, the goal is to make consumers desire it, moving their mindset from “I like it” to “I want it.”
  • Action: The ultimate goal is to drive the marketing campaign receiver to initiate action and purchase the product or service.
Traditional marketing funnel
Traditional marketing funnel

Modern marketing funnel

Some might keep it simple and divide the funnel into the top, middle, and bottom stages.

However, the most relevant for today’s world marketing funnel includes the following stages.

  • Awareness: The top-most stage in the marketing funnel. A future customer starts getting to know your business through marketing campaigns. New leads are pull down into the lead management system
  • Interest: Leads learn more about the brand and its products/ services. Marketers can nurture leads via emails, content that is more targeted around industries, brands, newsletters, etc
  • Consideration: Leads turn into prospects or qualified leads; they show more activity related to that brand. Businesses can send prospects more product-related information through automated email while nurturing them with targeted content
  • Intent: Prospects demonstrate their interest in purchasing from your store. An opportunity for business to make a strong case for why their product is the best choice for a buyer
  • Evaluation: Buyers make a final decision about whether to buy from you or not. Here, marketing and sales work together to nurture the decision-making process and convince them that their brand’s product is what customers are seeking for
  • Purchase: Where a prospect makes the decision and turns into a customer. This is where sales take care of the purchase transaction.

Two additional stages which does not lie in the main funnel.

  • Retention: According to MarTech, existing customers are up to 70% more likely to buy a new product or service and spend around 33% more than new ones. After the purchase, it’s crucial to stay in contact with customers
  • Advocacy: Now, customers turn into loyal supporters of your brand. No matter what, they only purchase from your store. They also become a salesman by influencing their social circle to buy your products.
Modern marketing funnel
Modern marketing funnel

Nonlinear funnels

As customer’s behavior changed significantly over the years, some experts in the Marketing field argue that the traditional marketing funnel is no longer relevant.

Why? Because the buying process is not linear.

In the AIDA model, leads go in from the top to the bottom of the funnel. However, the new approach of modern marketing funnel concludes 2 things:

  • Leads can come into the funnel at different stages, not always through the funnel’s top.
  • Lead can be generated by itself with no campaign’s efforts
  • The linear funnel couldn’t illustrate the customer’s buying journey in reality

With the first point, customers might be referred or already identified that they want to buy a brand’s product. So the early stage where they interact with the business can be the Intent one.

In fact, CEB reports that B2B customers are traversing 57% of the funnel on their own, before encountering sales. This happens because the access to information has increased due to technological advances.

Secondly, I believe that instead of the linear type, the circular model’s much better at demonstrating the modern buying process and explaining why it can fuel itself.

A positive buying experience can lead to afterward referrals that fuel the top of the marketing funnel to make it clear. The process begins again.

Have a look at the below model by McKinsey about the consumer decision journey.

Nonlinear funnels
Nonlinear funnels

Marketing and sales funnel: What’s the difference?

Many people might think two terms, “Marketing funnel” and “Sales funnel”, are one and use them interchangeably.

This thought is true, but not exactly the same.

There is a fine line between a marketing funnel and a sales funnel. And the most significant difference comes from the context of use.

Basically, the essence of sales and marketing is separated into two distinct functions. Each reflects a unique journey map though both outline the progress of a prospective customer.

Marketing funnel:

  • Its functionality is to build the interest going along with brand awareness
  • The bottom of the marketing funnel marks the top of the sales funnel
  • Lead customers from attention to the engagement state
  • Focus on lead generation and nurturing via content marketing

Sales funnel:

  • Involve sales tactics that convert customers’ interest in product desire, and finally buying actions
  • Lie at the narrowest end of the cone-shaped marketing funnel
  • Aim at closing the deal

Look at the diagram below by TrackMaven to see how the funnel’s marketing and sales ownership has changed over time.

Marketing and sales funnel
Marketing and sales funnel: What's the difference?

However, I mention one thing above that the marketing funnel can be changed based on your business’s demands and original orientations.

  • Some see the funnel as being split vertically, with both sales and marketing owning the full funnel.
  • One believes sales control the whole funnel as salespeople are increasingly becoming thought leaders to drive awareness by doing outbound outreach
  • Another side argues that nurturing prospects through the purchasing process via marketing tactics is more important as the impact of the digital world on buyer’s behavior

Each has its sense. However, we don’t have something called “the perfect marketing funnel”. Adjusting your funnel to suit your user personas will make it more effective.

Do you need a Marketing funnel?

Do you need a Marketing funnel?
Do you need a Marketing funnel?

Here are some main reasons for the indispensable role of a marketing funnel:

  • Assist in strategy determination: Analyzing and building a marketing funnel lets you dive deeper into a customer’s mind and understand the roots of all their actions. Hence, know what tools and strategies you can use to keep them engaged
  • Create consistency: All the marketing activities in each stage will be planned at first and work in a complete system with the ultimate goal - converted leads
  • Be measurable: The funnel maps out your process and identifies any weak points in the marketing and sales systems that make you lost customers. So that you can pivot and modify your strategies
  • Increase conversion rate: The funnel will filter out all the non-targeted visitors. With suitable marketing tactics, you can narrow the number of visitors to your site only to target ones who are more likely to be converted
  • Drive more sales: The most vital competitive advantage always starts from customers’ insights. In each stage of their buying journey, the needs and wants change. Able to identify your marketing funnel, you can nurture leads until they’re ready to purchase
  • Time and effectiveness: Planning beforehand all activities for each marketing funnel stage allows you to automate your marketing efforts. You can save tons of time and resources to achieve better results
  • Retaining customers: A plan of post-purchase marketing activities helps you keep customers engaged and make them return now and then

How to create a powerful marketing funnel?

Step 1: Understand your audience

What comes to mind when looking at those statistics of the Marketo Engagement Gap’s report?

  • 61% of marketers think that they easily engage with the right content
  • 56% of consumers want businesses focus more on the content that meets their needs and can solve their problems
  • 51% of consumers claim that brands send to much irrelevant content to them

So what’s the problem here?

Many businesses do marketing but lack customer’s insights. In other words, some don’t truly understand what their customers want and need.

You need to sell what the customers need, not the thing you have.

That’s why the keys to making use of your funnel marketing efforts are knowing your audiences and personalizing your marketing strategies.

6 Ways to understand your audience better:

  • Search and analyze all the current customer data
  • Evaluate your competitors
  • Create customer personas
  • Get to know your audience personally
  • Use social marketing and research tools
  • Monitor audience feedback, comments, engagement

To ensure that you’re operating an efficient funnel with compelling and relevant content, you’ll want to invest some time and resources into conducting a quality audience analysis.

Step 2: Determine the number of stages in the marketing funnel

As I said below, your customers do not necessarily go through all the modern funnel stages.

Once you have an in-depth understanding of a typical buyer’s journey, then you can determine different stages in your funnel. After all, a marketing funnel is just a way to lead more people in the right direction you want it to be.

Different customer segments will have different buying journeys. They will be the basis for forming the stages of your marketing funnel.

Whatever how your funnel’s going to be, there are 3 primary stages for a well-structured funnel:

  • Top of the funnel: All about increasing the visibility of your business. People here are not ready to buy from you. In practice, it looks like someone reading a blog post you wrote or notice you in a review video.
  • Middle of the funnel: When you build enough trust that people start showing their interest in what you do and offer. You need to provide more value that your website visitors are willing to give you a piece of contact information. Turn them into leads.
  • Bottom of the funnel: Your job is to show your offer in a compelling way that makes prospects want to own it and take action. This part refers more to sales tactics than marketing

The act of building a funnel is just the process of building an automated system with each stage having the incentives that move people down the funnel.

Step 3: Pick tactics for each funnel stage

This move will help you put your marketing funnel to work, from paper plans to reality.

Start thinking of the tactics and channels you want to use and the types of content for each stage of the funnel you’ve just created.

I will list down some tactics you could use for each stage of your funnel

In the awareness and interest stage, what you will need to consider is lead generation. Build yourself a landing page, create a lead magnet, and drive traffic to your page.

To bring your business in front of the target audience’s eyes, you can use:

  • SEO and blogging to gain organic traffic and direct them to your website.
  • Social media and Youtube to drive more social traffic to your web content that addresses the customers’ problems.
  • Paid advertising and email campaigns that directly target specific groups of people.
  • Influencers for brand awareness and allow you to reach more people

With the next two stages - consideration and intent, you need to make yourself the best and most compelling option in the customer’s mind by any chance.

When customers are starting to be serious about your brand and option consideration, your offers should be special and unique compared to things of the competitors.

To do this, keep utilizing the marketing tactics before that, but change the content and its used purposes (which I will mention later).

Besides, there are some critical points for your marketing strategy in this second stage:

  • Keep producing quality content: It should not focus too much on sales, but other valuable information around your industry, market, and customer’s concern
  • Testimonials and ratings: Display testimonials to increase trust between customers and your business
  • Create a nurturing system: It’s a series of emails that gently turn your potential customers into paying ones. Email marketing is always a powerful and multi-functional tool you should not miss

When it comes to the evaluation and purchase stage, sales elements take over the funnel. This is where you have to put the final nail in the coffin and make sure that the potentials end up making a purchase.

Several ways that you could apply in this phase, depending on your niche and customer segmentation:

  • Urgency: Limited-time offers can be used to create a sense of urgency and are known to be an effective sales technique
  • Scarcity: Having the same result as urgency. Making your offers scarce has worked for many retailers to raise the desire of owning something from the customers
  • Free product trials and demos: If you’re selling software or extension etc, then this will give your buyers a chance to check out your features and feel the value in the things you’re offering
  • Remarketing strategy: Focus on targeting people who visited your site or interacted with your brand but left without making a purchase
  • Personal offers and discounts: Provide customer incentives to buy from your store

Read more: 22 Tactics to create the best E-commerce Shopping Experience

Step 4: Create content for each part of the funnel

With each phase of the funnel, change and optimize your content to achieve its objectives.

For the awareness stage, you’re not just attracting any audience but also a solution seller. So all the content should be valuable and informative, focusing on solving or answering the customers’ questions or concerns.

Your content scope needs to be broad and cover your industries, market, and customers’ problems.

Step to the second phase, when you want to direct more to the target audience and relate customer’s solution with your product or service, the content can point out unique features and compelling incentives.

With the final phase, to close the sales, your content needs to include much stronger incentives than before and create a sense of urgency or scarcity. The content in your promotional posts or emails has to make the readers want to buy it immediately.

Read more: How to Design Content for better User Experiences

Step 5: Build a brand community

Turning your existing customers into advocates is always the ultimate goal for nurturing current customers.

Once the tactics you’ve chosen and your strategy works, you should start building a community around your brand to ensure continuity.

Leveraging blog posts, podcasts, and user-generated content, and more can help drive more new leads for your marketing funnel. Or even gaining an external recommendation not connected to a brand can strongly influence prospects.

Giving a reason for the existing customers to come back and make the second purchase and beyond. That’s how your marketing funnel can fuel itself and make the business grow sustainably.

Step 6: Keep track of change

After finishing all the tasks to build a complete funnel doesn’t mean your job’s done as the market never stops changing.

You will need to track all those changes and optimize your marketing funnel to make it more flexible and competitive day by day.

To do that, you require research and a clear understanding of what makes the customer engaged with your brand. What’s more, the purpose of optimizing your funnel is to get more people into the funnel, nudge more down through it, finally turn them into advocates.

Keep an eye on specific metrics that indicate the customers’ engagement and interaction with your marketing campaigns and ask yourself:

  • Which areas of your marketing funnel that you’re losing customers?
  • Why do customers leave your funnel there?
  • How can you remove/ eliminate the problems that prevent customers from purchases

By doing that, you can identify the exact obstacles which are getting in the way of their purchase path and modify your marketing funnel.

For each change you make, monitor subsequent site data to establish its success. This will help you compare the viability of different versions of your funnel. Hence, each change can guarantee to generate the highest returns.

It is your turn!

I believe after this post, you can start using marketing funnel in your business to bring back the most satisfying results.

Though you will not capture every person who comes to your site, it’s normal to lose people during the funneling and nurturing processes. And anything new needs a start.

So it’s time to apply your knowledge!

Table of content

    A data-driven marketing leader with over 10 years of experience in the ecommerce industry. Summer leverages her deep understanding of customer behavior and market trends to develop strategic marketing campaigns that drive brand awareness, customer acquisition, and ultimately, sales growth for our company.

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