What Is Funnel Marketing?

Funnel marketing is a model businesses use to guide potential customers through the stages of the buying process. First introduced over a century ago, the funnel marketing approach is increasingly popular with digital marketing. 

Before the funnel marketing model commonly used today, Elias St. Elmo Lewis introduced the original funnel marketing concept, the AIDA model, in 1898. AIDA stands for attention, interest, desire, and action, similar to the stages of modern funnel marketing. While customers still had options to choose from and could conduct comparison shopping, most customers were limited by the items they could purchase locally. 

In the modern era of online shopping, you can now access hundreds of products to compare prices, brands, and more. Now that customers have a seemingly unlimited options for products to purchase, funnel marketing helps retailers connect with their target audience no matter what stage of the buying process they're in, from simply browsing to making a purchasing decision. 

The rise of digital marketing makes the marketing funnel even more popular. The available data makes it much easier for businesses to track and analyze customer behavior at each funnel stage. This lets marketers create more targeted marketing campaigns to guide customers through their buying process.

Explore funnel marketing, how it’s used to engage potential customers, and how to implement funnel marketing in your business.

What is funnel marketing used for? 

Funnel marketing helps businesses create marketing and sales strategies to move potential customers through several stages of their buying journey. 

You might also hear references to the marketing funnel or a conversion funnel. Depictions of funnel marketing typically use an inverted pyramid or funnel shape that narrows from top to bottom. That’s because the top of the funnel has more potential buyers who are comparing shopping or gathering research before purchasing. When these customers reach the bottom of the funnel, you address a more select group of buyers further along in their decision-making.

The stages of funnel marketing

You will see funnel marketing phases given different names in various sources. You may even see some places that have broken the process into more stages. Sometimes, you may see the stages referred to as “top of the funnel (ToFu),” “middle of the funnel (MoFu),” or “bottom of the funnel (BoFu).” In general, funnel marketing falls into four main stages: awareness, consideration, conversion, and loyalty. 

Awareness

The awareness stage is when potential customers learn about a business or product. In this stage of the marketing funnel, you’re at the broadest part of the tunnel as your business aims to attract as many people as possible by creating content that generates interest and awareness in your product or service.

At this stage, potential customers may be searching for information or solutions to a problem they have. They may be unfamiliar with your brand and have not yet engaged with your business in any way. This is an opportunity for your business to create content that provides value to potential customers and captures their attention.

Consideration

Consideration comes next. Here, you aim to capture the interest of potential customers by providing more detailed information about your product or service. This would include content focused on features, benefits, and how other customers have reviewed the product.

Your goal in this stage is to provide information that helps potential customers understand the benefits of your product or service and how it can solve their problems. You’re helping that buyer compare your offerings to your competitors or evaluate their options. Consider this the “Tell, don’t sell” stage.

Conversion

Also often called the action stage, this phase is where potential customers decide whether or not to buy your product or service. The marketing at this stage works to convert the prospect into a sale by providing reviews, testimonials, and other forms of social proof.

Your focus in this stage is to streamline the buying process, making it as straightforward as possible. You want to make things easy to encourage customers to complete the transaction.

Loyalty

After successfully making a sale, you can move your customer into the last stage: loyalty. This is where you entice customers to remain loyal to your brand and even advocate for your business.

By connecting with customers after you make a sale, you can keep them interested in your products and services. Content at this stage demonstrates your continued interest in helping them solve problems and that you’re there when and if they need assistance, providing excellent customer service. 

Why funnel marketing is beneficial 

A funnel marketing strategy can help guide your efforts to speak to potential customers at various stages of the buyer’s journey. A marketing funnel plan can help you know what content you need, what channels to use, and how to budget effectively. When used effectively, funnel marketing improves customer targeting, increases conversion rates, provides data insights, and builds customer relationships.

Improves customer targeting

With funnel marketing, you can take a targeted approach, tailoring your messaging to the specific needs and interests of your target customers at each of the funnel's stages. You can create marketing materials that engage with your customers, whether they are at the top, middle, or bottom of the funnel. 

Increases conversion rates

Thanks to your customer targeting, you can provide more specific messaging to the customer at their particular stage of the journey. This can help you to make the content more meaningful and useful to them along the way, increasing the likelihood of conversions. You can improve your targeting and messaging as you learn more about the needs, wants, and behaviors of your potential customers. 

Provides valuable insights

This approach is especially efficient for digital marketers, who can use data to track customer behavior at each stage of the funnel. Using the information gained, your business can more easily identify what is working and what isn’t. This lets you optimize campaigns and improve the overall customer experience. Since it’s digital, you can get the data in near real-time, which can help you course correctly to save budget.

Builds customer relationships 

Your attention to guiding potential customers through their buying process helps build trust. As you move that prospect through the funnel, you also establish a relationship with your customers. Your efforts to tailor your approach to their needs and to make the process as easy as possible can lead to increased customer loyalty and repeat business.

Who uses funnel marketing?

Both business-to-business (B2B) and business-to-consumer (B2C) companies can benefit from funnel marketing. The sales funnel approach gives you tools to establish trust, educate potential customers, and provide the information needed to close the sale. Companies of all sizes, from startups to large corporations, benefit from funnel marketing.

How to implement funnel marketing

If you’re ready to implement a funnel marketing strategy at your company, you can follow these steps to begin: identify your audience, create content for each stage of the funnel, generate and nurture your leads through the funnel, provide support as people convert to new stages, and lastly identifying what went well and where you can improve in the future. 

Identify audience.

To use the funnel marketing approach, you must first research your target audience. Once you know the groups your product or service may appeal to, you can dig deeper to develop individual buyer personas. These fictional profiles of your customers help you tailor content throughout the funnel.

Create content for the funnel.

Each funnel stage would get different content to develop the relationship with the potential customer. For instance, say you make customized phone chargers. Imagine your customer is looking for a gift for Father’s Day: 

• To appeal at the awareness stage, you might post a blog that rounds up various ideas for Father’s Day, including your own offering. 

• To appeal to a prospect in the consideration stage, you might have a blog and social media content about the appeal of personalizing a gift.

• For conversion, you might have a landing page that explains your company’s personalization process and how the customer can verify their purchase before it’s sent.

• After they’ve purchased, you might send a thank you email to encourage customer loyalty and future purchases and encourage them to post a testimonial.

Generate and nurture leads.

For the marketing funnel to show a return on investment (ROI), you need leads to nurture through it. To find leads, you’ll typically generate content that people want enough to provide their contact information or indicate interest. Lead generation can also involve events and contests.

Then, you need to nurture the leads to guide them through their journey. Often, this uses email campaigns to send targeted messages that resonate with buyers based on typical customer behavior or preferences.

Support conversions. 

It is possible to do all the work to get someone to move through the entire funnel but lose them at the end. To help prevent this, optimize your landing pages, implement retargeting and personalized offers, and test various messages around urgency and scarcity for your potential customers.

Conduct funnel analysis.

By continuously optimizing your funnel, you can improve your success rates. Using analytics tools, you can track behavior throughout the funnel and identify areas for improvement. You may need to adjust your strategy to drive conversions and grow your business.

Next steps 

Funnel marketing can help you understand your audience and reach them in targeted ways at every stage of their customer journey. Although you may see variations in how marketing professionals lay out their sales funnel, the basic stages include awareness, consideration, conversion, and loyalty. By implementing a funnel marketing strategy, you can improve your customer targeting and conversion rates while gaining valuable insight into your marketing efforts. 

You can learn more about the fundamental principles of digital marketing, including funnel marketing, by earning your Google Digital Marketing & E-commerce Professional Certificate on Coursera. This seven-course series allows you access to professional-level training from Google. 

You might also focus on the power of data analytics in understanding funnel activity with Meta’s Marketing Analytics Foundation course. Once you complete the introductory lessons, demonstrate your understanding with a Social Media Capstone Project offered by Northwestern University.