Blog 42: Stages of marketing funnel and methods for increasing conversion rates

In blog 9, we spoke about using the framework ‘business model canvas’. A 360 degree understanding of our product (i.e. its value proposition, activities, resources, partners, target customers, channels, cost structure, revenue stream).

Based on the business model canvas, we dug deeper into individual elements. In blog 10, we leveraged a framework to map our value proposition with customers’ expectations. In blog 14, it was mentioned that we created user personas to understand each user type. Then, for each user persona we documented their probable journey map (blog 16), i.e., from product consideration to purchase. Every prospective customer’s journey is unique.

So, how do firms increase the probability of converting a potential to a customer?

They deploy targeted campaigns based on the prospect's stage in the marketing funnel: awareness, interest, desire, or action.

In the awareness and interest phases, firms use campaigns to attract new leads.

In the desire and action phases, firms use campaigns to nurture existing leads and help develop customers into brand advocates.

Hence, the concept of a marketing funnel is crucial. It illustrates the customer journey toward purchasing a good or service.

Four stages of the marketing funnel:

·      Awareness: The goal is to attract

·      Interest/consideration: The goal is to inform

·      Desire/conversion: The goal is to convert

·      Action: The goal is to result in a purchase

Awareness

When a prospective customer becomes aware of a product. This can happen through advertising, word of mouth, prospect research, social media (refer blog 7) etc. The objective of this phase is to stay on top of mind.

Interest

When a prospect is interested they go through a consideration process. They research for more information, compare competitor offerings etc. Hence, firms should educate customers on how the product meets their needs. This includes positive customer reviews, testimonials, and case studies, etc.

Desire

Also referred to as the conversion or purchase phase. The goal of this phase is to encourage a purchase (as the product meets a prospect’s needs).

Action

The final stage of the funnel is action or acquisition. Wherein, the prospect becomes an active customer. The goal is to result in a purchase. There are other actions that a firm could be aiming for. They include whitepaper download, subscribe to a blog, request demo, app install, email signup etc.

It is possible to convert a one-time customer into a repeat customer. The lifecycle marketing strategy focusses on this - additional stages are Support and Loyalty (refer blog 65 to learn more). To build loyalty, it’s important to engage with customers. To shorten development cycle, several e-commerce apps integrate tried and tested loyalty APIs into their product (refer blog 74 for more on API products). In this stage, strategies such as upsell and cross-sell are also leveraged (refer blog 76 to learn more about upsell and cross-sell).

This phase is also called engagement phase. In this stage, we can encourage an existing customer to refer our products to their friends and family (i.e., referral). Refer blog 69 to learn more on creating a viral loop.

In addition, refer to blog 71 to understand the different GTM strategies/mindsets (how do product-led and sales-led strategies differ?). These mindsets determine our tactics for each marketing funnel stage.

Refer blog 91 for more on attribution models (models that credit channels and touchpoints, across the marketing funnel, for a customer conversion).

Jump to blog 100 to refer to the overall product management mind map.

Source:

https://en.wikipedia.org/wiki/Purchase_funnel. Funnel model with the AIDA concept was first proposed in Bond Salesmanship by William W. Townsend in 1924.

https://advertising.amazon.com/library/guides/marketing-funnel#:~:text=A%20marketing%20funnel%20is%20the,%2C%20to%20decision%2C%20then%20loyalty.

Best of luck! 😊