The Marketing Funnel Explained

What is a marketing funnel?

A marketing funnel describes the specific stages of customers’ journey with a brand.  Many marketers refer to a marketing funnel as a purchase funnel because of its focus on driving customer purchases. However, as we’ll see, the marketing funnel doesn’t end with a customer purchase.

A marketing funnel is a way to organize a customer’s brand journey into a series of stages. Marketing funnels are the path through which brand marketers must take prospects in order to create high-value customers.

Let’s take a look below at the customer journey through the marketing funnel.

The basic premise of a marketing funnel is that customers must achieve each step in the funnel process before moving to the next step.

Let’s look at one example. I’ve discussed my love of cars in other articles. The automobile market is a great industry for marketing funnel examples because there are many different price, brand and usage options.

Suppose a customer living in Michigan spends his winter weekends driving a snow plow for extra income. Unfortunately, his large SUV on which he mounts the plow has seen its last days and now needs to be replaced. This customer may be able to rattle off the names over 100 auto brands—Chevy, GMC, Ford, Mercedes, Fiat, Ferrari, Mini, BMW, Tesla, and more. Put differently, this customer is aware of many different car brands. This is the first step in the marketing funnel—brand awareness.

However, our plow driver needs a vehicle he can use to plow on weekends. Because of this, he will not consider purchasing a number of these brands. Ferrari, for example, is not a brand with models practical for plowing. Additionally, because our customer plows on the weekend for extra money, it’s unlikely he has the disposable income to afford a luxury supercar with a price tag over $250,000. In other words, he would not consider purchasing a Ferrari. This is the second stage in the marketing funnel—brand consideration.

Notice that our customer first has to be aware of an auto brand before he can consider it. Each stage of the marketing funnel follows the same rule—the prior funnel stage must be achieved before a customer can move to the next funnel stage.

Let’s take a detailed look at each marketing funnel stage.

Brand awareness 

Brand awareness represents the first stage of the marketing funnel.  There are several different types of awareness—aided awareness and unaided awareness are the two most popular. Both metrics measure the percentage of customers who can remember a brand in some capacity (the different awareness metrics measure the different capacities in which customers remember a brand). Consumers must first be cognizant that a brand exists before any other marketing funnel stages can occur. Awareness marketing is a major area of focus for new brands and is typically built through reach and frequency advertising campaigns. Read our full overview of brand awareness here.

Brand consideration

The second stage of the marketing funnel is brand consideration.  Brand consideration is defined as the percentage of customers who would consider a brand when evaluating their purchase options. Our auto example above illustrates that 1) customers must be aware of a brand before considering it, and 2) customers do not consider all brands of which they are aware.

Purchase 

Purchase is the third step in the marketing funnel. The purchase stage is defined as the percentage of customers who purchase from a brand. As with other funnel stages, consumers must be aware of and consider a brand before they make a purchase. The marketing funnel is often called a purchase funnel because of this stage. Marketers want purchases! Remember that the terms marketing funnel and purchase funnel are often used interchangeably.

While purchase is the goal for marketers, top-funnel metrics such as awareness and consideration are not the only drivers of purchase activity. Bottom-funnel stages that occur after purchase can also drive incremental customer transactions. Let’s explore our bottom-funnel metrics—loyalty and advocacy.

Brand loyalty

The fourth stage in our marketing funnel is brand loyalty. Once a customer makes a purchase, the journey is not over.  Brands aim to cultivate a strong consumer relationships with the goal of fueling repeat purchases. This concept is very important in product or service categories that have short product cycles and potential for many repeat transactions.

There are many strategies with which to build customer loyalty—rewards and loyalty programs, high-quality customer service and discounting tactics are a few examples— but all these programs aim to solidify a brand in consumers’ minds as the only option for future purchases.

Brand advocacy

The final stage in the marketing funnel is advocacy.  Customers who are advocates for a brand are extremely valuable to marketers because they act to attract new customers. In other words, brand advocates act to market a brand for free. There are likely some brands that immediately jump to mind as having a strong following of customer advocates—Apple, Tesla, Nordstrom, and Paul Reed Smith (an incredible electric guitar brand) are a few examples.

Brand advocacy has become so important that companies like Google are now rewarding brands for positive customer online reviews and referrals. See our guide to SEO for more information on Google and organic rankings.

How do marketers measure the marketing funnel?

Brands measure their marketing funnel through surveying their target audience via a quantitative survey over time.  Brand marketers will typically use a research company such as Nielsen or Ipsos to conduct these tracking studies. The studies use various methodologies to understand a brand’s rating for each stage in the marketing funnel.

Additionally, most brand marketers conduct a brand tracking study regularly so they can monitor the increases or decreases in various stages of the marketing funnel.

How do marketers use marketing funnel insights?

The marketing funnel allows marketers to diagnose specific areas of opportunity in a customer’s journey. There are many tactics and strategies to help improve each area of the funnel. Below are a few examples of programs brand marketers may employ to grow each stage of the marketing funnel.