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Marketing Guide

The Marketing Funnel Explained: A Blueprint for Business Growth

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Let's cut to the chase: Without a marketing funnel, your business is dead in the water. 

You can have the best product or service in the world, limitless funding and be loved on social media, but if you don't have a marketing funnel, your business is guaranteed to fail.

Big words, I know — but they're true.

Here's the thing: Any business that's surviving or thriving has a marketing funnel of some kind — whether they know it or not. It may not be an intentional, optimized funnel that propels growth effortlessly, but it will loosely follow the marketing funnel template nonetheless.

The bottom line is this: If you want your business to be successful, you need to learn how to create a marketing funnel that produces consistent results.

So, What Is a Marketing Funnel?

Marketing funnel definition: A marketing funnel is a proven process used to turn people into customers and brand advocates. Creating a marketing funnel is the best way to produce consistent sales.

There are many different ways to categorize and explain marketing funnel stages. Businesses typically lean toward different versions depending on their focus and needs. However, every marketing funnel template covers the same basic steps.

Let's explore the marketing funnel stages from different perspectives:

1. The Business Perspective

Businesses can view the marketing funnel stages as 4 distinct steps:

  1. Attract potential customers with ads and other marketing methods.
  2. Convert prospects into leads by collecting their information.
  3. Close the sale by motivating customers to purchase.
  4. Delight customers so they become promoters.

Marketing Funnel Evolution: The Flywheel

These days, there's a lot of talk about the flywheel, which is a new way to view the marketing funnel — although, in essence, only one thing has changed.

Marketing funnel templates typically focus on moving people from A to B — strangers to customers. However, the marketing flywheel emphasizes how customers can — and should — drive new business.

In the image below, you can see how delighted customers become promoters and attract new strangers.

Marketing funnel stages: Here is the marketing flywheel
Source: HubSpot


The concept of customers becoming promoters is shown in the first marketing funnel template seen above. However, the marketing flywheel illustrates how this process can compound and drive exponential business growth.

"It used to be that if you made a customer happy, they would tell 5 friends," said Jeff Bezos, the founder and chief executive of Amazon.com. "Now, with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends."

What's more, the flywheel concept is more important than ever because trust in businesses has eroded over the years. From people surveyed by Hubspot:

  • 81% trust advice from friends and family over businesses
  • 55% trust the companies they buy from less than they did before
  • 65% don't trust news releases from companies
  • 69% don't trust advertisements — and 71% don't trust sponsored ads on social networks

So, if people don't get their information from businesses, where do they get it? Today, people look to their networks for advice, read product and service reviews online, and check brand mentions on social media.

All in all, when thinking about marketing funnels, remember that it isn’t just a one-way flow — it's circular, perpetual and compounding.

2. The Customer Perspective

Now, let's explore the marketing funnel stages a customer must go through before making a purchase.

The marketing funnel template we'll use is "AIDA." The American businessman Elias St. Elmo Lewis developed this system in 1898. However, the principles still hold true today.

Here's how it works:

  1. Awareness: Potential customers become aware of a product or service
  2. Interest: Awareness develops into interest as they seek to learn more
  3. Desire: Interest turns into desire for the product or service
  4. Action: Their desire compels them to take action and purchase
Marketing Funnel Stages: The Customer Perspective
Source: Ryte

The Rise of Personalization

Before digital marketing funnels, it was difficult — sometimes downright impossible — to know where an individual was in the buyer's journey. As a result, businesses couldn’t target individuals with the optimal messaging needed to move them toward buying.

That's changed.

Marketing is no longer purely an art but a science. Digital marketing funnel tools provide a wealth of information about where individuals are in the buyer's journey and how to move them to the next stage.

As a result, funnel building is now a series of experiments. And the results of these experiments allow us to engineer the most effective system to produce new customers. This is often referred to as conversion funnel optimization.

3. Marketing Funnel vs. Sales Funnel

Now, let's take a moment to understand the marketing funnel vs. sales funnel. Practically speaking, marketing and sales share the same funnel, with marketers working at the top of the funnel and salespeople working at the bottom of the funnel.

Let's explore how the marketing funnel vs. sales funnel relationship works in conventional business-to-business (B2B) companies with an outbound sales force:

  • First, the marketing team will attract prospects with advertising and marketing methods, such as search engine optimization (SEO) and pay-per-click advertising (PPC). 
  • The marketing team will then incentivize prospects to convert into leads by offering something of value in exchange for contact details. This offer is referred to as a "lead magnet" and could be a free ebook, report, sample or digital tool.
  • At this stage, the marketing team has confirmed a person's interest and produced "marketing qualified leads," also known as MQLs.
  • This is when the handover happens, the marketing team will provide the sales team with MQLs.
  • The sales team seeks to confirm the MQL's interest and qualify the lead for fit. If there's a good fit, the sales team has produced a "sales qualified lead," also known as SQL.
  • Next, the sales team will nurture SQLs into customers.

As the example demonstrates, marketing and sales work together to move people down the funnel.

The image below shows the relationship between the buyer's journey and the marketing funnel. The handoff between marketing and sales teams happens in the middle between MQL and SQL:

Sales Funnel vs. Marketing Funnel Stages
Source: HubSpot

Marketing Spans All Stages of the Buyer's Journey

With the development of digital marketing funnels and the flywheel, marketers now work on all the funnel stages — especially in business-to-consumer (B2C) businesses. 

Here's a simple example based on just one marketing channel, Facebook Ads:

  • Top of the funnel marketing (TOFU): Use Facebook ads to attract and educate prospects about the brand.
  • Mid-funnel marketing (MOFU): Retarget website visitors and email subscribers with Facebook ads highlighting the product or service's benefits.
  • Lower-funnel marketing (BOFU): Retarget leads who have visited the website in the last 24 hours with a time-sensitive offer.
  • Flywheel marketing: Retarget customers with Facebook ads promoting the referral program to gain new and repeat sales.

Keep in mind that there is much overlap between marketing and sales. And although marketing funnel stages are often shown linearly, the rise of omnichannel marketing demonstrates how funnels often manifest as interconnected webs.

Going Deeper: 7 Marketing Funnel Stages With Examples

As noted above, there are many different ways to classify and present the marketing funnel stages. In this section, we’ll use another common formula that allows us to go a little deeper. It covers 7 key steps in the relationship between businesses and customers:

  1. Exposure
  2. Discovery
  3. Conversion
  4. Consideration
  5. Close
  6. Relationship and Retention
  7. Advocacy

For each of these marketing funnel stages, we'll look at the process needed to move potential customers to the next phase and see real-life business examples of how it's done.

1. Exposure

First things first: Before you can nurture relationships with your target market, you need to capture their attention.

There are plenty of ways do this, such as direct outreach, publishing content optimized for search engines or advertisements, like this one from ecommerce platform Shopify:

Lead Funnel Example: Shopify Ad


Top of the funnel marketing needs to present a solution to a problem your target market has. For example, this Shopify ad is directed at amateur photographers interested in selling their photos:

  • Problem: They have no way to make money from photography.
  • Solution: "Everything you need to go from shooting to selling."

The exposure stage mirrors the first step in AIDA: awareness. So, now that your prospect is aware of your offer, you need to bring them deeper into the lead funnel.

How? Continuing with AIDA, you need to transform awareness into interest.

Some prospects may become interested when they're first exposed to your brand and offering. However, it's likely most will need to be exposed to your brand more than once.

In fact, there's an old marketing principle that suggests it takes 7 "touches" before a prospect will act on your call to action (CTA).

2. Discovery

Once awareness turns into interest, the next marketing funnel stage begins: discovery. 

This stage is all about giving before you get.

The prospect is open to learning more about your brand or offer. So, it's crucial to create valuable, educational content for this marketing funnel stage.

For example, password manager LastPass regularly posts content on their blog that its target market would find interesting and helpful.

Lead Funnel Example: LastPass


Promoting these blogs on social media or through sponsored posts will help get them in front of prospects in the discovery phase.

However you decide to provide value to the prospect, you should always aim to establish trust and subtly position your offering as the best solution to their problem.

Once you've done this, it's time for marketing funnel stage 3.

3. Conversion

You've gained your prospect's awareness, captured their interest and they've started to discover your brand. Now it's time to convert them from a prospect into a lead.

"Lead" is the marketing and sales term for someone who's actively expressed interest in your brand or offer. Here's the deal: You need to capture someone's contact details for them to be a lead. 

Whether the prospect visits your website and activates an advertising pixel, provides an email address, or interacts with your brand on social media platforms, you need a way to contact them to move them further down the conversion funnel.

For instance, OptinMonster, a conversion optimization tool kit, offers prospects a free downloadable guide in exchange for their email addresses.

Digital Marketing Funnel Example: OptinMonster Lead Magnet

4. Consideration

Now that you've converted a prospect into a lead, you should get them to consider purchasing your offerings. 

In AIDA, this is when interest turns into desire.

During this phase, the lead will seek to learn more about your offer's features and benefits, research competing offers and evaluate their options.

Consequently, you want to move from creating content that addresses their core problem to positioning your offering as the best solution. In this next example, the software company HubSpot uses a Facebook ad to highlight the benefits of its offering compared to competitors.

Digital Marketing Funnel Example: HubSpot Facebook Ad


At this point, the lead has a thorough understanding of their problem and the solutions available, and they should be seriously considering your offer.

5. Close

Now you need to close the sale.

In conventional B2B companies, this is done by a salesperson personally — in which case, it’s important that you find ways to create opportunities to speak with leads. 

Cloud Communications platform Twilio places "Talk to an Expert" CTAs on their website to make it simple for leads to reach out and speak to a salesperson.

Digital Marketing Funnel Example: Twilio CTA


However, most B2C companies (excluding high-value purchases) must rely on marketing and sales materials to convince leads to purchase.

The work doesn’t end once you land a sale: There are still crucial steps to take. 

6. Relationship and Retention

After the sale, you need to reassure the customer they’ve made the right decision. This helps prevent them from slipping into buyer's remorse. The best way to do this is to over-deliver on the value you sold — in other words, provide a better product or service and customer service than expected.

Jeff Bezos, the founder and CEO of Amazon, said it best: "The best customer service is if the customer doesn't need to call you, doesn't need to talk to you. It just works."

However, sometimes customers will need help, so it's vital to have systems in place to provide support. For example, the financial services company Square provides support and resources to help customers get the most from the company's products.

Digital Marketing Funnel Example: Square Support


These resources are designed to allow customers to find guidance without contacting support or waiting for help.

Aside from over-delivering, you also need to keep marketing.

However, instead of marketing your core product or service, you should market upsells, cross-sells and your referral program — which leads us to the final marketing funnel stage.

7. Advocacy

Now, the aim of the game is to turn happy customers into promoters and advocates of your brand.

The author and marketing professor Jonah Berger said, "Advertising brings in customers, but word of mouth brings in the best customers."

This marketing funnel stage encompasses the key concept of the marketing flywheel: When you develop a reliable system to turn customers into promoters, you set the company up for exponential growth.

Think of Apple fans queuing overnight for the next iPhone release. These people share their enthusiasm for the brand everywhere they go — not to mention, Apple's cult-like following often captures the coverage of mainstream media outlets.

Task-management tool Trello has plenty of customer-promoters on Twitter who voluntarily tag posts with the hashtag "#lovetrello."

Digital Marketing Funnel Example: Trello


The last tweet in the image above clearly shows the marketing flywheel at play: 

  1. SeedInvest is a happy customer
  2. SeedInvest introduced North Capital to Trello
  3. North Capital may become a happy Trello customer
  4. Etc.

So, how can you actually build a marketing funnel?

How to Create a Marketing Funnel in 4 Steps

Now that you have a thorough understanding of how the marketing funnel and flywheel work, let's run through the steps of building a sales funnel.

To do this, we'll use our original marketing funnel template:

  1. Attract
  2. Convert
  3. Close
  4. Delight

We'll explore the marketing methods available and how to use them for each conversion funnel stage.

1. Attract Prospects

When it comes to lead funnels, there are countless ways to generate awareness and turn it into interest.

Broadly speaking, all marketing activities fall into 1 of 2 categories:

  1. Paid: Advertising channels that cost money directly
  2. Organic: Marketing activities that are "free"

Let's explore some popular options for each.

A. Paid Advertising Channels

These days, there are plenty of paid advertising channels available online that provide incredible targeting and tracking capabilities, such as:

Digital Marketing Funnel Example: Google Ads


Other paid advertising channels include influencer marketing and affiliate marketing.

Influencer marketing is simply the process of paying social media influencers to promote your offering to their audience. For example, the image below shows Instagram influencer Payal Rajput promoting the watch brand Daniel Wellington.

Digital Marketing Funnel Example: Actress and social media influencer Payal Rajput


Affiliate marketing programs are a way to pay third-party marketers to promote your offerings. For example, VPN provider NordVPN provides a 100% commission to affiliates on a 1-month subscription offer.

Digital Marketing Funnel Example: NordVPN Affiliate Program


In essence, all paid advertising channels allow you to buy new prospects, making them the quickest ways to generate substantial new business.

With these channels, you don't need to spend months developing and executing a marketing strategy as you would with organic methods, such as SEO. You can start generating new customers today.

However, the key downside to paid advertising channels is that once you stop putting money in, your flow of customers will come to an abrupt stop. This is where organic marketing methods can help.

B. Organic Marketing Methods

It's worth mentioning that the term "organic" refers to marketing methods that don't require a financial investment. Instead, they can be harnessed with elbow grease and time.

In reality, organic marketing methods may demand a significant financial investment. Only, the money isn't spent on advertisements directly. Rather, it's spent on people-power and the tools needed to get the job done.

You can think of organic marketing as "give before you get" marketing.

Marketer and author Seth Godin said, "Our job is to connect to people, to interact with them in a way that leaves them better than we found them, more able to get where they'd like to go."

There are many organic marketing methods that you can use to capture attention, generate interest and provide value, such as:

  • Social media marketing: Use social media platforms to build relationships with people in your target market.
  • Content marketing: Create value-driven content to capture your target market's interest on social media and search engines.
  • SEO: Optimize your website and content to appear higher in the search engine results pages (SERPs).
  • Referral traffic: Create content assets that other websites will reference, and use direct outreach to increase backlinks to the content.

These organic strategies overlap considerably, so let's explore them together in one example from dropshipping service provider Oberlo.

Oberlo's target market is entrepreneurial-minded young people. These people are likely to search for Instagram templates to improve their content. Now, the search term "Instagram templates" receives 74,000 searches on Google per month.

So, Oberlo commissioned an expert to create a value-packed guide on Instagram templates and optimize it for search engines. The guide ranks No.1 on Google, also snagging Google's featured snippet.

Digital Marketing Funnel Example: Oberlo Content/SEO


Because this guide is such a useful resource, many other websites link to it. Plus, it's often shared on social media. All in all, this guide generates substantial awareness through search engines, social media and other websites.

Here's the best part: Organic marketing methods are the gift that keeps on giving — literally.

When Oberlo commissioned the guide, they made a one-time investment: the expert’s fee. In return, that guide has claimed the no.1 spot for this competitive search term for nearly 2 years — producing an extraordinary return on investment (ROI).

All in all, the best strategies always intertwine paid and organic marketing methods. Still, whatever your methods, make sure to develop a way to generate awareness and bring people into your marketing funnel.

2. Convert Prospects into Leads

Once you've generated interest, it’s time to convert your prospects into leads by capturing their contact information.

Often, marketers will use a "lead magnet" to incentivize this conversion — a free offer given away in exchange for a prospect's contact information. For example, the marketing tool creator CoSchedule produced a free report on the state of agile marketing that prospects can download by inputting their email address.

Digital Marketing Funnel Example: CoSchedule Lead Magnet


There are tons of different lead magnet offers you could create to incentivize conversions, such as:

  • Templates
  • Ebooks
  • Case 
  • Industry reports
  • Resource lists
  • Quizzes
  • Infographics
  • Email courses
  • Wallpapers
  • Video content
  • Webinars
  • Scripts
  • Case studies
  • Audiobooks
  • Access to private online groups
  • Free products or services

You could also capture prospects’ "contact details" by tagging them with your Facebook Ad pixel to retarget them with ads on Facebook and Instagram.

Here's how it works: First, you add a snippet of code (i.e., the pixel) to your website. Then, when a prospect interacts with your website, your pixel will tag them with a cookie that will allow you to advertise to them later.

Plus, Facebook provides numerous options to retarget and track website visitors:

Digital Marketing Funnel Example: Facebook Ad Pixel


Finally, you could encourage prospects to follow your social media accounts.

All of these conversion funnel methods provide a way for you to nurture relationships with leads so you can move them closer to buying.

3. Close Sales

During this marketing funnel stage (and the previous one), you'll be paying close attention to conversion funnel optimization. This is the process used to increase the percentage of users who visit a webpage and convert into leads or customers.

Remember, desire is what drives people to purchase, and objections are what stops them from buying. So, whether you plan to use salespeople, brick-and-mortar shop assistants, or an ecommerce website to close sales, aim to increase desire and handle objections.

You can increase desire with time-sensitive offers, stunning product pages and engaging copy. In your copy, make sure to highlight features, promote benefits and use compelling calls-to-action. 

Plus, you can handle objections with tactics like offering a guarantee or harnessing a phenomenon called "social proof" by promoting positive reviews or client logos to build trust.

For example, check out this conversion funnel landing page from software company Teem:

Digital Marketing Funnel Example: Facebook Ad Pixel

4. Delight Customers

The marketing flywheel strategy depends on your ability to turn customers into promoters — so how can you do it?

Again, the most essential strategy is providing an exceptional customer experience. That’s why Derek Sivers, the founder of CD Baby, said, “Customer service is the new marketing.”

Team messaging platform Slack does this brilliantly. In the image below, Slack showcases its transparency, dedication to improving its product and care for every customer:

Digital Marketing Funnel Example: Slack Customer Service


That said, you can also propel the marketing flywheel by using:

  • Referral programs: Set up a way to reward promoters.
  • User-generated content: Encourage customers to post photos of their purchase on social media and tag your brand.
  • Review incentives: Incentivize customers to leave reviews on social media platforms and third-party review sites such as TrustPilot.
  • Email marketing: Create a follow-up email marketing sequence to nurture customer relationships.

Of course, the best strategy would include all of the above methods working in perfect sync.

The Marketing Funnel Explained

A marketing funnel is a system used to capture people's interest and turn them into customers and brand advocates.

The marketing funnel can be defined in many different ways. One common breakdown of the marketing funnel stages is:

  1. Attract
  2. Convert
  3. Close
  4. Delight

When it comes to generating the initial awareness and interest needed to bring people into your marketing funnel, there are 2 main types of marketing: paid and organic.

Paid marketing methods such as Google Ads and Facebook Ads provide a way to create a substantial number of new customers quickly. But the moment you stop investing, your flow of customers will dry up.

On the other hand, organic methods such as SEO and social media marketing can take time to build. However, they typically develop momentum and continue to pay dividends long after you've stopped investing in them.

When creating a marketing funnel, you need to optimize conversion rate optimization (CRO) continually.

Remember, the marketing funnel doesn't stop when you secure a new customer. You still need to delight the customer and turn them into a promoter. This is the key concept of the marketing flywheel.

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