Back to Blog
The Marketing Funnel: a practical explanation

The Marketing Funnel: a practical explanation

funnel May 05, 2021

By Andrea Tartaglia – Co-Founder/Director @ The Marketing Leaders Ltd.

 

As with many of the articles you will find in The Marketing Leaders, I am going to take a practical approach to a topic which had a vast literature behind. Accordingly, I am not going to enlighten you on the theory, preferring to share how I have interpreted some widely used marketing concepts and tools to succeed in my marketing endeavors.

 

My interest in how marketing influences consumer behaviors started quite early in my career.  In fact, for a short while I considered studying psychology, eventually choosing what I thought would be a more ‘sensible’ course of study, Business Administration. I’d like to think that by majoring in Marketing with a dissertation titled ‘The Impact of Advertising on the Cognitive Structures of Consumers’ (what a mouthful…), I had the opportunity to join the 2.

 

And I started using what I learned in my first job in an advertising agency, where I had the opportunity to work on some amazing advertising campaigns with clients like Procter & Gamble, Kellogg’s, Reebok, Coca-Cola, among others.

 

With time, the theory has become second nature and I started using my work experience to guide my thought and operational processes and this is what I intend to share here.

 

There are a few versions of the Marketing funnel floating around. They are all pretty consistent however they vary both in terms of structure and naming conventions. What is common is the core principle behind the funnel, which I have captured in the version I like to use, illustrated below.

 

I like to keep things simple and have decided to adopt a version with 4 key stages. I’ll explain later on how I include in this model any further stages you might have noticed in other representations of the funnel.

 

The basic principle behind this model is that consumers will go through the 4 stages as they interact with a Brand: 

  1. Awareness: firstly, to aspire to any kind of engagement, the Brand needs to be known to consumers. This is a very shallow level of engagement where securing Brand recognition is the main objective.
  2. Affinity: the second step is to deepen the relationship with potential consumers. Here is where more information about the Brand becomes available and Brands create a match between their values and proposition and the consumers’ needs state.
  3. Interest: once affinity is created, Brands need to turn that into some form of active participation. This is when potential consumers start showcasing active behaviours that might lead to a purchase (assuming that is the action the Brand is aiming to generate – which is a very likely assumption).
  4. Action: and this is the final stage when potential consumers become actual consumers. They are aware of the Brand, agree that the Brand solves a need for them (functional and emotional), have made an effort towards the Brand and its products (most likely would have researched it online or reacted to a piece of communication from the Brand) and have decided to proceed to a purchase.

I am using action in a very broad sense here. If this is the first ‘journey’ with the Brand, then the first purchase is the desired action. Otherwise, it could be a second third purchase, turning into Brand loyalty; it could be advocacy, or anything else the Brand needs its consumers to actively do.

 

The above is a very simplistic way to describe the funnel, but it is practical and true.

 

Here is an example I am very familiar with given my experience working for US movie Studios: the launch of a new film.

 

Firstly, the audience, or segments of the audience need to be aware the movie is coming out.

Then, they need to understand if the movie is something they would consider watching. Is it the right genre? Does it have a cast they find appealing? Is the plot intriguing?

If there is affinity towards it, there are still a few details will need to know before showing real interest. When is the movie coming out? Does it fit with any other commitments? Is it going to be available in a theatre conveniently located? 

And finally, there is full commitment among some member of the potential audience and tickets are sold.

 

This is a fair representation of the simplified model.

 

At each stage, there are different tasks marketing can accomplish to drive people through the funnel.

 

Again, simplifying greatly:

  • To build awareness, a simple announce trailer communicating key basic information about the movie starts the journey by introducing the movie into the audience’s sphere of consciousness.
  • To build affinity, more information will have to be served, for example a follow up trailer explaining the plot (without spoiling the full experience!) and showcasing the cast, magazine and digital articles talking about the making of the movie.
  • To build interest, marketing activities need to move the dial and solicit a reaction from the audience, for example with reviews and word of mouth
  • To generate an action, the audience needs to know where and how to buy a ticket. In theatre advertising becomes critical at this stage. And once members of the audience have enjoyed the movie, they can become advocates for it by recommending it to friends and family or they can even go back and watch it again.

 

This is a journey that can last quite a long time. In many cases for example, the first trailer for a movie is released over a year before the film’s release date.

 

If the above describes the funnel in the most simplistic way, here are some considerations to complicate things…:

 

  • In reality the model is not linear. I wish it was… Consumers go up and down the funnel for no apparent reason. One of the tasks of a building connected consumer journey is to measure and anticipate the reaction of consumers towards the marketing activities throughout the funnel and direct consumers towards the final goal (say a purchase).

Also, after having reached the desired action from consumers, we might want them to go back to the journey again to solicit new actions (as mentioned, a repurchase, advocacy, etc.)

  • Consumers are not all the same (obvious statement of the day…). As much as we cluster them into groups of people with similar needs and interests, they display individual behaviors which make their journey hard to manage and influence. We are greatly helped by the availability of data that enable us to be as precise as possible in the identification and understanding of potential consumers; and while we must use all insights and metrics to help us building an effective connected consumer journey, we mustn’t reach paralysis.

And of course, consumers with the same persona might be in different places through the journey, which complicates things further.

(For more on audience/consumer segmentation, check out our blog posts and the TML Knowledge House; we covered this topic throughout the month of Marc 2021 with several articles and a webinar – still available on demand)

  • There are so many factors that influence the funnel and have an impact on how the consumer journey unrolls. We tend to think in isolation: this is what I want consumers to do and how I want them to react to my marketing activations. Even if we try to anticipate what can come between how we intend things to be and how they actually turn out, we just don’t know what we don’t know… I guess the pandemic is a great example of this. Again, modern tools can really help here. Machine learning and AI are highly recommended tools that help simplifying the complexity we operate in. However, I am still to be completely sold on their ability to anticipate change (I am getting there...).

 

The ‘cure’ to all this is a great insights and data strategy. And clarity of intent.

 

Data and insights help making sense of the environment around which Brands operate. Consumer insights in particular provide a deeper understanding of the potential consumer targets and can be really useful in placing each consumer persona across the stages of the funnel.

 

And being clear on what we want the final outcome of the consumer journey to be informed how we look at the data and how we interpret it to help navigating the funnel for each of the possible consumer targets. This is what I mean with clarity of intent.

 

This is just the start of our exploration on the marketing funnel. In the coming weeks we will be talking about navigating the funnel and building connected consumer journeys. And we will debate about how to use the funnel depending on different Brand and commercial goals as well as considering the implications for short term and long term marketing strategies and campaigns.