Setting up marketing funnels is an essential part of any online strategy for businesses that try to sell their products online. But what are they exactly, how do they work and how can you use them? In this blog post, we’ll walk you through the basics to help you work out your own marketing funnel.

What is a marketing funnel?

A model describing the various stages of a prospect’s journey from the first interaction with your brand to the ultimate goal: conversion.
unbounce.com

In other words, marketing funnels are a tool to define, understand and follow the different stages that potential customers go through during the customer lifecycle with the ultimate goal of generating one or multiple purchases. This also implies that most users won’t just see your ad and buy the product. They are more likely to undergo a complex purchase decision-making process and funnels can help you to understand this process and use it to your advantage.

In order for funnels to work, they need constant measurement, optimization, and development.
A complete marketing funnel is usually broad at the top and gets more narrow towards the bottom which looks something like this:

Marketing-Funnel-Sales-Funnel

How do funnels work?

There are more complex funnels, like the one above, that break down the decision-making process into many steps, but in order for you to understand the concept, were going to start with an easy 3-step funnel.

The three basic steps before you can make a sale are reach/awareness, engagement/interest, and conversion.

3 step marketing funnel

Reach/Awareness

This is the top of the funnel where your customers’ journey starts. At this stage, you want to focus on reaching as many of your potential clients as possible in order to create awareness about your product or service.  The goal here is to create an initial contact with your audience, which is usually achieved by providing them with relevant content. The goal at this stage is not to close a sale yet, you only want people to know you are out there and that you can help them solve a problem.

There are many different tactics to achieve this and your job is to find out which one works best for your product. A common practice is to create content (like this blog post😉) in order to get people to visit your website. Search engine optimization, pay-per-click ads, and social media ads are only a few tools you can use to reach your audience and create awareness.
In order to measure the reach and awareness of your online presence you can use metrics like search engine rankings (with tools like SEMrush), the number of impressions on social media and tools like Google Analytics to analyze website traffic for example.

nat geographic awareness ad

When it comes to the top funnel you must learn where your most qualitative traffic comes from and build on that in order to attract even more people.

If you’d like to learn how to determine the right channels for you, we recommend you have a look at our blog post about the bullseye framework.

Engagement/Interest

Once you understand how and where to get in front of your audience, the next step of the funnel is to generate engagement and interest to start building a relationship with them. In other words, you want your potential clients to interact with your brand, content or media on a regular basis. In order to achieve this, your communication must be designed to encourage your audience to consume your content and make them see you as a trusted authority in your domain. The only strategy that can help you get there is to understand which content is helpful to your audience and create exactly that type of content. If you offer client focussed content for free, you are very likely to build a relationship with potential clients and prove to them that your solutions actually work. This trust is necessary because their buying decision in the next step is built on this trust.

To make sure you can reach people on a regular basis you can incentivize them to like your page or subscribe to your newsletter, which will allow you to reach potential clients in the future. You might be surprised but Newsletters still have the highest conversion rates in the industry, however, they are also challenging to build as gathering newsletter subscribers is a slow, but rewarding process.

A faster way to repeatedly engage with your potential clients is to create remarketing campaigns on Facebook, Instagram or Google.  Remarketing campaigns allow you to show your ads specifically to people who have engaged with your content or website in the past.
For example on Facebook and Instagram, you can easily do this by targeting custom audiences of people who engaged with your content or page in the past.

semrush ad engagement

So, how are engagement and interest measured you might ask. This mainly depends on the format of your choice. If you send people to your website you should look at metrics like the time spent on the website, the bounce rate or page views. If you are publishing videos on the other hand, you would keep an eye on the average time watched, social shares and what people have to say about your content in the comments.

If people don’t engage with your content as expected, you’ll need to tweak and experiment until your engagement metrics improve. If the average time spent on your blog posts is only a few seconds, you need to find a way to make your content more engaging or helpful. If nobody engages with your content on social media you might want to experiment with a different copy or different, more engaging visuals.

Conversion

“Whoever can spend the most money to acquire a customer wins” – Dan Kennedy, author and business coach

This is our bottom-funnel, your endgame so to speak. After we reached our potential clients online and built a relationship with them through our high-quality content, it is time to ask for a little more commitment. As a reminder: a conversion is basically any desired action we want our customer to take on our website. This can be a quality lead where they allow you to contact them by phone/mail, a subscription to your newsletter or a sale.

Since you are not earning money directly with your newsletter, a newsletter subscription would be considered a micro-conversion. However, this mico-conversion can allow you to generate a paid conversion afterwards and is therefore still relevant.

The goal of any funnel is a sale.
Now it is time for a bit of real-talk. We all know the countless ads that promise us amazing things if we subscribe to their newsletter or exchange our e-mail address for a free e-book. In most cases, you will end up being baited from one promise to another until you hit a paywall.  And I understand very well that at the end of the day, we all need to make a profit somehow. However many funnels just don’t work because users are being baited with false promises and don’t receive any real value until they pay. If you want to build a lasting relationship, don’t obviously try to trick people into buying your product. Tailor your content and communication in a way that makes them want to know more. You literally want them to say “shut up and take my money”. The only way to achieve this is to create real value for your audience.

shut up and take my money

The mindset you need to have when creating a marketing funnel is to think a few steps ahead and be prepared to provide the next product your potential client is going to need along the lines.
Rather than making a direct sale proposition after they read one of your articles, you should extend your funnel by a few steps. This means that instead of rushing to the sale, you suggest to your regular readers to download a free e-book or any other useful resource in exchange for their e-mail address. Once you got their contact detail, you can keep them up-to-date about new offers and have a higher chance of converting them into long-term clients.

Storytime – A real life example

I am constantly researching new helpful content to learn more and get better at what I do. A few years ago I stumbled upon an awesome YouTube channel by the guys from Growth Tribe. They have, among others,  a series where they regularly present amazing marketing tools.  I loved the videos and subscribed to their channel.

After some time during my subscription, I found out that they also offered training where they teach growth hacking techniques or using A.I. in marketing. I had been watching their videos for several weeks and I knew these guys where pros, so I chose their course for myself and attended their classes in Rotterdam.
This is a marketing funnel at its best. By creating value, trust, and a relationship through their content rather than pushing me to buy their product they converted me to a client. Their courses are not cheap, so having the right funnel in place allowed them to sell a 4 figure training class by investing in creating useful content.

Enough story time for today, let’s get back to your funnel. Measuring conversion is easy if you have the right tools set up. Data analysis tools like Google Analytics allow you to easily track which channel generated the most conversions or lead and your go-to metric here should be the conversion rate.

Upselling: the secret ingredient to supercharge your funnel

The most successful funnels out there leverage the principle of upselling. Upselling basically means persuading a customer to buy something additional or more expensive.
Let’s take McDonald’s for example. No matter which McDonald’s restaurant you visit, after every order you’ll be asked if you’d like the item single or with the menu. While this seems like a friendly question, it is actually the main reason for the fast-food chains billion-dollar success-story. They are using their burgers to get people to visit the restaurant while being fully aware that their burgers are under-priced. The fast-food giant makes its profits by upselling low-cost products because they understood that a customer already at check-out is more likely to buy a second product, especially if it’s at a low cost. Their fries are cheap and their drinks come in tanks, literally built for economy of scale.

This same logic explains why every online shop shows you “people who bought this article also bought…” or why you get free shipping over an order of minimum X€.

amazon upselling, people also bought this

If you make the effort to create a marketing funnel it is highly recommended to integrate upselling propositions to the funnel to boost your revenue.

Try to upsell the next product they are going to need after they bought your first product. You are selling shoes? Try upselling shoe care products. Selling smartphones? Why not upsell a smartphone case to protect the newly acquired machine.

Endgame

Your endgame is to create a self-sustaining and ideally automated funnel that generates a profit on average. If you generate a sale that earns you 15€ for every 10€ you spend on advertising you’re already profitable. If you manage to upsell a product to every 5th customer and make another 10€ on top, even better. It can take some time to build but once you are there you got yourself a reliable money-making machine, given that your audience pool is big enough and your advertising costs don’t vary too much.



If this article was helpful, subscribe to our newsletter for more: