For many businesses, the sales funnel has served to visualise and quantify the process of converting leads into customers. It has helped many business owners better understand this process, but is the conventional conversion funnel still relevant today? Below, we dive deeper into the standard conversion sales funnel. We’ll explain why it still matters and offer some alternative approaches that might better help you get new customers.
What is a marketing funnel?
A marketing funnel is a visualisation chart that represents the process by which people progress through the various stages of becoming a customer. The chart is funnel-shaped to represent that your process becomes more focused as people draw nearer to making a purchase. The funnel narrows as prospects become more exclusive and likely to convert with each successive stage.
How does it work?
Though there isn’t a single, agreed-upon version of the funnel, the traditional marketing funnel consists of stages that marketers use as a guide to understand the process by which leads are converted to consumers. Typically, these stages are:
- Awareness – Potential customers are made aware of the product or service. Often, they are drawn into the first stage through marketing campaigns. This could be done in a variety of ways, such as hosted events, content marketing, social media, trade shows, and more.
- Interest – People who are aware of your product or service begin to learn more and develop an interest. This is a crucial stage because it opens an opportunity for brands to connect with their leads.
- Consideration – People are who are interested in a product or service begin to consider whether they should make a purchase. At this stage, leads are now seen as prospective customers. It’s best to nurture a relationship with them at this stage as they begin to make a purchasing decision.
- Intent – People who have considered the product or service now intend to make a purchase. This is where your prospects can be considered likely customers for somebody. This is the time for you to make a strong case on why your product is the best choice.
- Evaluation – People who intend to make a purchase begin seeking out the best available value in the market. Your prospects are now making a final decision whether to buy from your brand or someone else’s.
- Purchase – People who have determined that you offer the best value finally make a purchase. The last stage of the marketing funnel is where you’ve successfully turned a prospect into a customer.
Why is a marketing funnel important?
To understand your funnel is to understand your customers’ journey. This can help you learn at what stage prospects are dropping out and discover what efforts aren’t working to advance them through the funnel if any. By identifying the point in the funnel where you lose the most potential customers, you’ve inherently located your business’s biggest weakness. By addressing it, you’re making your business stronger.
Since markets are evolving and the buying process has diversified, many argue that the conventional marketing funnel no longer represents the conversion process for many businesses. Some prospects can enter the funnel at different stages. For others, the funnel continues beyond conversion. Here are a couple of the most popular alternative conversion funnels.
McKinsey’s consumer decision journey
One nonlinear model is the McKinsey’s consumer decision journey. This is a circular model that includes the following stages:
- Consideration – a prospective buyer considers an initial set of brands based on brand perceptions and exposure.
- Evaluation – consumers add or subtract brands after careful evaluation.
- Purchase – a consumer selects a brand based on their evaluation.
- Post-purchase – after purchasing a product, the consumer builds expectations based on their experience that will affect the next decision journey.
Another practice that marketers lean into is the inverted funnel. The flipped funnel aims to make customers into advocates, who will then refuel the top of the marketing funnel by lead generation. The stages are as follows:
- Repeat – The goal is to turn first-time customers into repeat customers.
- Loyalty – Customers then develop a preference for your brand and begin to identify with it.
- Referral – Once they’re loyal to the brand, they’re more likely to recommend your products and refer your company to other businesses.
- Advocacy – Customers then turn into advocates, writing product reviews and posting about your services on social media, thus helping you generate new leads.
Creating your own sales funnel
Today, businesses have implemented many variations of the traditional sales funnel, each responding to the many ways that consumers engage with products and services. If you’re looking to know how to increase profits, defining your own sales funnel is a great way to assess and understand your customer base in ways that can impact your bottom line.
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