What is a Marketing Funnel? – How it Works?

If you are an experienced marketer, you may be familiar with the term marketing funnels. These funnels are often used by marketers to successfully attract and convert customers to their businesses. 

A marketing funnel is a tool used by businesses to map out a journey the customers embark on when they decide to buy a product or service from your business starting from the first time they learn about your product to conversion. In this article, we’ll discuss in-depth what marketing funnels are and how they help in measuring success, the stages of the marketing funnel, and a comparison of B2C and B2B use of the marketing funnel. 

What are Marketing Funnels?

The marketing funnel is a visualized framework used for understanding the steps of a successful customer’s journey from prospects to customers. Each and every customer goes through different steps before finally making a purchase. These funnels map out the different steps taken by customers at different stages of the marketing funnel. 

This tool is called a marketing “funnel”  because the number of prospects narrows down at each stage as they move along from one stage to another, making the visual representation of the customer’s life cycle looks like a funnel.

Marketers use different tactics at every stage of the marketing funnel. Here’s a marketing funnel template that visualizes the marketing tactics used by marketers at different stages. 

The 4 Marketing Funnel Stages

The marketing funnel is divided into 4 key stages from top to bottom. The top stages include awareness and interest and the bottom stages are evaluation and action:

• Awareness: At this stage, people get to know about your product or service. The prospects are drawn out at this stage with help of marketing campaigns. You give out knowledge about your product with the help of online advertisements, trade shows, content, webinars, email, ebooks, social media, search, media mentions, and more. Lead generation takes place at this stage, as information is collected and stored in a lead management system. These leads are nurtured further down the funnel. 

• Interest: After lead generation, the marketers use tactics to induce interest in the prospects for the company’s products. At this stage, relationship-building practices are used to build trust. The marketing tactics applied here are more refined. Content and emails that go out are more targeted around specific industries and classes. 

• Evaluation: After the marketers successfully inspire interest in some of the prospects in the previous stage, the said prospects move to the next stage. In the evaluation stage, the buyers make the final decision of purchasing a product from your business. At this stage, the marketing and sales departments of your company come together to nurture the decision-making process and convince the buyer that their brand’s product is the best choice. 

• Action: At this final stage, the buyers who decided to purchase your product or service finally click on “Add To Cart”. This is where sales take care of the purchase transaction. And if the customers have a positive experience they may end up referring your products to their friends, family, and co-workers which can fuel the top of the marketing funnel, and the process begins again.

Types of Funnels

The term “funnels” is thrown around a lot. Funnels are used by various fields of the corporate landscape including sales, marketing, HR. They are used to map out a series of happenings that lead towards the desired goal. While our article talks about marketing funnels, below mentioned are some prominent types of funnels that are used by businesses. 

• Sales funnels
• Email marketing funnels
• Content marketing funnels
• Webinar funnels
• Video marketing funnels
• Lead magnet funnels
• Recruitment funnels
• Affiliate sales funnels

B2B vs B2C Marketing Funnels

When we talk about the difference between B2C marketing funnels and B2B marketing funnels the stages of the funnels are the same, the difference mainly lies in the elements of every stage and how the prospects of each type of marketing funnel move through the funnel. 

Elements	B2C Marketing Funnel	B2B Marketing Funnel
Targeting	Individual	Groups
Motivation	Emotional	Rational
Decision Time	Shorter	Longer
Customer Relationships	Less engaging	More engaging

The above-mentioned table highlights the key elements of a marketing funnel and how they differ in a B2C marketing funnel and B2B marketing funnels.

• Targeting: One it comes to B2C marketing you are mostly targeting individuals for their personal purchases. In this case, the individual is the sole decision-maker of the purchase decisions that he/she would be making. The B2B buyers have an elaborate decision-making process that includes the involvement of a group of people. This means that there are multiple influencers and decision-makers involved in the process. 

• Motivation: The motivation behind a purchase decision is obviously different in B2C and B2B. A B2C customer normally makes a purchase out of impulse, to satisfy his/her own need. Therefore, the motivation is almost always emotional. The B2B purchasing decisions are dependent on rational reasons. For example, A firm needs a new machine for its plant. The people purchasing that machine would rationally decide which machine they would opt for after consulting various different individuals within the company.

• Decision Time: The decision time is obviously longer in B2B sales cycles because of the involvement of a group of people and protocols that are set in place by the businesses purchasing the product, whereas the B2C purchasers take less time to decide which product they want to purchase.

• Customer Relationships: The relationship between the business and the customer differs tremendously across B2B and B2C purchasers. In B2C, buyers mostly don’t interact with the business at all but in B2B,  businesses have dedicated sales representatives that nurture buyers through the marketing funnel until they are ready to make the final purchase decision. 

Creating an Effective Marketing Funnel

To build a marketing funnel you need to follow the following steps:

1. Understand the purpose of the marketing funnel
2. Map out the end goal of the funnel
3. Create a framework for all the processes and key steps of the customer journey
4. Build out funnel after thoroughly checking the feasibility of it
5. Launch the marketing funnel and track your results

To understand what marketing tactics you’ll apply at each stage of the marketing funnel, you first need to ask the following question to fully understand what the customers would need at each stage: 

• How will customers at this stage find me?
• What kind of information do I need to provide to help them move from one stage to the next?
• How will I know if they have converted or moved from one stage to another?

Optimizing the Funnel

Funnel optimization is the process of refining the marketing funnel at different stages to improve the acquisition, conversion, and retention of prospective customers. You can optimize the funnel with help of the following marketing practices:

• Creating informative content for blog posts and landing pages
• Email marketing
• Using strong CTAs
• Reputation management
• Conversion rate optimization

Measuring Success

There are three marketing funnel metrics used to measure the success of a marketing funnel:

• Cost Per Acquisition

The CPA measures how much you are spending on marketing to acquire a single new customer.

• Customer Lifetime Value (LTV)

This one is used to measure the continuous value a customer is bringing to your organization. 

• Conversion Rates

The conversion rate measures the frequency of final conversion that occurs for a single marketing effort

Final Note

Marketing funnels help generate more leads and get high conversion rates. You can consult our experts on the process of devising an effective marketing funnel for your business. We can guide you through the entire process and help you come up with the right marketing tactics to apply different stages of your marketing funnel.