What is Digital Marketing Funnel - How To Build One
Updated on 13th Jun, 22 287 Views

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What is Digital Marketing Funnel?

Digital marketing funnel is a model of stages that a customer goes through in the process of transformation from visitor to customer.

Let us, now, see what stages do a customer goes through in a typical digital marketing funnel strategy:

  • Exposure
  • Awareness
  • Identification
  • Purchase
  • Consideration
  • Customer relationship
  • Post-purchase experience

A parallel funnel can be considered for a seller. Let us see what are the actions that a seller has to take in the above stages and try to construct a digital marketing funnel.

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In the above image, you can see the digital marketing funnel on the right side and the stages that customers go through on the left side.

The function of this funnel is to help marketing professionals learn and understand what are the inputs that they have to give at each stage of the process.

Firstly, in a digital marketing funnel, a customer is exposed to the product through ads on social media, search engines, and other platforms. When a customer identifies a need, they become aware of a particular product and then consider the product and its features.

A customer goes through intense research about the product and other users’ experiences with the same. If a customer is convinced by the research, they then move to the next step of making the purchase.

After buying the product, the customer moves to the next stage of retention where the post-purchase experience and the company’s relationship with the customer determine customer retention and future shopping.

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Why is a Digital Marketing Funnel Important?

The significance of a digital marketing funnel cannot be ignored. It helps in classifying customers into different categories; understanding the stage at which a customer is, helps a seller to have a clear and concise idea about the marketing actions that have to be taken and also about the content of directing advertisements and other strategies that may be required for a particular target customer.

This will always lead to better segmentation of the required marketing actions. This will divide the entire conversion process into small sections.

The conversion process becomes easy by following the stages of the digital marketing funnel. It helps marketers in the effective delivery of content to the right customers at the right time.

Consequently, the marketer’s productivity will be increased because now they are aware of the most effective digital marketing strategy. A lot of time and resources can be saved by following the digital marketing funnel. It also ensures that time and resources are not wasted on unnecessary marketing actions.

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Difference Between the New and Old Digital Marketing Funnel

It is worth checking how the old digital marketing funnel compares to the new one. One can determine what adapting strategy is required to meet the current user behaviors.

The old marketing funnel, also known as the AIDA model, includes the following four stages:

  • Awareness: A user knows about the product or service
  • Interest: A user expresses interest in the product or service
  • Desire: A user wants the product or service
  • Action: A user purchases the product or service

Here is a comparison of the new and old digital marketing funnel:

New Digital Marketing FunnelOld Digital Marketing Funnel
Focuses on a nonlinear experienceFocuses on a linear experience
Consists of up to 10 stepsConsists of four steps
Thinks about the behaviors that drive a userThinks about universal user behaviors

As we can see, the new digital marketing funnel focuses more on each individual user. A nonlinear journey can be a little challenging, but the new digital marketing funnel allows companies to offer a better experience to their target market.

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New Funnel in Digital Marketing

The new digital marketing funnel is no longer just about capturing leads and making sales. It is more like a looping hourglass that allows prospects and customers to emerge at any point in the marketing process.

Each prospect is taken through an omnichannel experience that is unique to them. Customers are allowed to enter and exit the funnel at any stage, making the one-size-fits-all movement through the funnel obsolete. This nonlinear lifecycle-focused funnel allows for lasting brand success.

The following are the stages of the new digital marketing funnel:

  • Awareness: Showing the world the value you offer through investments in brand awareness strategies
  • Engagement: Understanding potential customers’ pain points and presenting a solution
  • Consideration: Positioning yourself as the solution to the pain points by focusing on key benefits, differentiators, and competencies
  • Purchase: Nurturing a new customer through their entire purchase journey
  • Adoption: Providing onboarding resources, tools, and knowledge to set up a lasting relationship with the customers
  • Retention: Ensuring that the customers are satisfied with their relationship with the brand
  • Expansion: Connecting with and learning from customers and uncovering new solutions and methods for them
  • Advocacy: Word-of-mouth advocacy for your brand will loop in new potential customers into the awareness stage of their journey in your funnel

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Old Funnel in Digital Marketing

The traditional marketing funnel is cone-shaped, and the aim is to fill the top with as many people as possible and leave the rest to luck. In the old digital marketing funnel, users simply went through the funnel without a phased, detailed strategy.

The main strategy is to attract a mass of users for gaining more prospects and, eventually, customers. The old digital marketing funnel follows four stages—awareness, interest, desire, and action. In this funnel, the awareness stage involves traditional marketing techniques (tv and direct mailing), which get the most attention.

Digitization has changed the way customers look up information. Mass marketing methods do not cut it anymore. Customers, nowadays, expect personalized solutions from brands that truly understand their individual requirements. A new digital marketing funnel is, therefore, a necessity.

Types of Digital Marketing Funnels

There are three types of digital marketing funnels:

Hourglass Digital Marketing Funnel

Hourglass Digital Marketing Funnel

The hourglass digital marketing funnel is the most popular and widely-recognized type of digital marketing funnel. The different stages of the hourglass digital marketing funnel are awareness, engagement, conversion, and retention.

As the name suggests, the hourglass digital marketing funnel has an hourglass-like shape. This shape stems from the following facts:

  • The awareness stage, which is at the top of the funnel, works to attract a wide audience.
  • The engagement and conversion stage, which makes the middle of the funnel, involves pairing down that audience into qualified customers.
  • The retention stage, which is the bottom of the funnel, continues nurturing the growing client base.

Looping Digital Marketing Funnel

Looping Digital Marketing Funnel

The looping digital marketing funnel, also known as the loyalty loop, focuses on customer retention and advocacy. The idea behind this funnel is that it is easier and less costly to retain existing customers instead of acquiring new ones.

The looping marketing funnel consists of the following stages:

  • Awareness
  • Consideration
  • Purchase
  • Loyalty
  • Advocacy

The looping digital marketing funnel requires a solid follow-up and retention marketing strategy to drive existing customers to become passionate advocates for the brand.

Micro-moments Digital Marketing Funnel

Instead of focusing on grand gestures, the micro-moments digital marketing funnel focuses on the potential in even the smallest of moments that are often overlooked by many digital marketers. After all, it takes only a second or less for prospects to decide if they want to work with you.

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Components of Digital Marketing Funnel

A digital marketing funnel can take many different forms for many different types of businesses, which makes it difficult to put it in one box. However, in its simplest form, a digital marketing funnel can be described as having three key components:

  • The foundation
  • The floodgate
  • The actual sales funnel

The Foundation

At the foundation of any digital marketing funnel is the need for a deep understanding of the target audience or potential customers. Companies really must possess a good understanding of who their target market is, the problems they are trying to solve, and the way(s) they search for information online.

Having this information will allow companies to map out foundational marketing strategies that are appealing to potential customers at every stage of their buying journey. This will help craft a unique selling point (USP) and set the tone for the audience.

The Floodgate

Floodgate refers to the traffic source or sources that send visitors to the funnel. This may include search engine optimization (SEO), social media channels, paid ads, Content Marketing, cold outreach via email marketing, etc.

The Actual Sales Funnel

The traffic is eventually directed to the actual sales funnel. While it can take a variety of forms, the sales funnel typically involves a lead magnet that is meant to attract a user’s interest, an amplifier that marks the brand as the superior choice, and a conversion event where the user transforms into a lead.

The key components of a sales funnel generally involve understanding the audience, attracting them to the company’s website, and converting them into buyers.

Categories of Customers in a Digital Marketing Funnel

Sound knowledge in a digital marketing funnel will result in accurate and enhanced targeting. The following are the available categories of customers:

  • The first category of customers is the ones who see the ad; they are the largest group of customers to be addressed.
  • The second category of customers is the ones who see the ad and also think about the product. These customers have a slight commercial intention.
  • The third category of customers is the audience who has the intention to buy, and purchase from them is confirmed.
  • The fourth category of customers consists of current customers who have to be retained.

Strategies for Each Step in the Digital Marketing Funnel

Different strategies have to be used for the four different types of customers. The following are the different strategies that are used in a digital marketing funnel:

Exposure and Awareness

The first stage is the exposure and awareness stage. The customers who simply see, have to be exposed to the product because unless they know about the brand, they will not even think about buying the product. The seller has to attract customers at this stage.

Let us see how it is done.

Delivery of different content on search engines and social media platforms is the answer. Social media and search engines are great platforms for this objective because according to Statista, the number of people using social media will increase to 4.41 billion by 2025. So, it is important for a brand to have a prominent presence in the market, social media, and search engines.

Social media can add to this goal of reaching users and increasing brand awareness. It is necessary to improve the quality of your content on social media to draw worldwide attention. Always follow the 3E rule—educate, entertain, and engage—while creating content for a wide range of audiences.

Do not forget to choose the right social media platform as well; when all your customers are on Instagram, then creating content for Facebook is useless. Your advertisements and content should be unique enough to entice anyone. The reach of YouTube should also not be underestimated.

The exposure and awareness stage demands intense research on the target audience.

If your content is a blog, then try to solve some of the readers’ problems so that it is readable as well as informative in such a way that it generates curiosity in the readers.

The goal of the seller is to create awareness about the brand and the benefits of the product, and then try to convince the customers to go to the next step of the digital marketing funnel.

A marked increase in traffic is the immediate result of a well-implemented strategy in the first broad stage of the funnel. But why do advertisements work? Is this an impact of simply seeing or scrolling through ads?

The answer is yes. By the theory of divided attention, when we are distracted by something, we subliminally take in what’s around us but may not truly register it consciously. So, it is worth investing in such display advertisements and content.

So, now people know about your brand. What next? Continue reading to know that!

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Identification and Consideration

Now, at this stage, the thoughts of the customers have to be aided and the right materials have to be delivered to convince them to move to the next stage of the digital marketing funnel. Here, a business has to deal with the thinkers, i.e., the second category of customers.

The delivered content should explain the perks of the product. The efficiency of the solution that is being offered has to be clear through the presented facts.

Introducing the thinking customers to FAQs can do a lot at this stage. Evaluation of other customers also plays an essential role because, these days, customers believe in other customers more than advertisements. Investing in case studies is a feasible option for the customers at this stage.

All this will clear the queries and confirm the need for the product in the lives of the customers.

Today’s customers are quite conscious and aware. The changing customer behavior patterns cannot be ignored. So, it is necessary to have more than one approach.

  • SEO: Proper keyword research and mobile usability have to be the priority. It is important to appear on the first page of the search engine when a particular keyword is searched. The trend is that customers rarely move to the second and third page, which is why SEO is significant. More reviews will always earn you a better rank.
  • Video Marketing: Why is video marketing important for the customers, in the second category, who think? The answer is because studies show that customers prefer to watch videos rather than read about products. Almost 50 percent of internet users look out for videos and reviews before visiting the store.

    Always consider the fact that the human attention span is eight seconds. Videos can engage multiple senses and give better interactive experiences than written posts.
  • PPC: The significance of pay-per-click (PPC) increases at this stage because users always prefer the top three ads shown in the search engine results. So, there is the possibility of conversion for thinkers who have some commercial intention. Not working on PPC may lead to the loss of such potential customers.
  • Email Marketing: Emails are the professional route to reach customers. Email marketing has proved to be effective. For this particular stage of the digital marketing funnel, what kind of email plays a major role? Your emails should introduce details about the product, its usability, and the solution that is being offered to the customers.

Always make sure that this guides the thinking pattern of the thinkers to the next stage of the digital marketing funnel.

The brand has to attract, demonstrate, and engage customers. The ultimate goal of this step is to persuade the customers of the effectiveness of the service that you are providing to them through your product.

Purchase: At this stage, the conversion has to be happy. The customer is on the verge of buying the product, so the digital marketing funnel strategy adopted here should be personalized. This leads to the customer thinking more about the advantages of the product.

Free trials can be given at this stage for the customers to experience the product for a short period. Whatever be the communication, priority should always be given to the result that the customer can get from buying the product. It should be made clear to the customer how a particular product is better than similar products offered by the competitors in the market.

Only this will help in the desired conversion and lead to the desired goal of a purchase being made. This is the bottom stage of the digital marketing funnel.

PPC, SEO, and email marketing are always the best strategies to use at the bottom of the digital marketing funnel. But it is also important to feed the customers with relevant information.

A few techniques that can be incorporated into emails, which will speed up the process of converting a customer from the thinking stage to the doing stage, are:

  • Constant communication support
  • Quick query resolution
  • Live demonstration and trials
  • Customized content and presentation based on the background of the customer
  • Case studies and testimonials
  • Uniqueness of the product and how is it better than the competitors’ products

Customer Relationship and Post-purchase Experience

It is necessary to make the customers understand that you are trying to help them. The objective of this step is to create a lasting bond with the customers.

The best post-purchase experience should be rendered in all aspects and maintaining regular contact can show the credibility of the brand. But, how? The best way to connect with customers is by reaching out to them for regular feedback and personalized care and attention.

Developing a case study and customized emails with insider-only discounts can be given a little more attention at this stage. Free advice can make a huge difference. Any help required by the customers should be provided. Furthermore, providing video tutorials proves that you care about if the product is working for the customer or not.

This will retain existing customers and convince them to make more purchases. A happy customer is a huge opportunity because they are a resource for the next conversion. Their recommendations, reviews, and word of mouth can play a huge part in convincing other potential customers.

Let us, now, summarize the above-mentioned customer retention techniques:

  • Regular feedback
  • Personalized care and attention
  • Insider-only discounts
  • Share experiences and new features
  • Educate on products through tutorials
  • Communication
  • Surprise the customers
  • Enhanced delivery and return policies
  • Outstanding customer support
  • Subscriptions
  • Customer loyalty programs
  • Reward loyal customers by creating more sales through recommendations
  • Address your promises

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Keys to Reach Out for Customers in a Digital Marketing Funnel

With the number of digital marketing funnels that are available, it can get confusing for companies to choose the right one or even know how to implement a digital marketing funnel effectively to reach the target customers. However, there are a few changes that can be made, irrespective of the type of funnel used, to maximize the reach and conversion rate.

The five go-to strategies are:

  • 24/7 Assistance
    The best way to ensure that a user becomes a customer is through 24/7 customer support.

    There are many other ways to assist the customers. Resources such as the following are a part of customer support:
    • FAQs
    • Chatbots
    • Guides

It is essential to determine which resources will offer the most value to the target market by researching the audience.

  • Looking Beyond Metrics
    While tremendous insight can be gained into the performance of an online marketing strategy, sometimes, a team can become too committed to data. Data should be considered along with the following:
    • User intent
    • User interactions
    • Revenue
    • Gross margin
    • Profit
  • AI and Machine Learning
    Machine learning and artificial intelligence (AI) can help analyze large volumes of data and help brands quickly develop improvements in data-backed campaigns. This also helps brands in additional ways such as:
    • Predicting user intent
    • Discovering keyword and content opportunities
    • Personalizing user experiences
    • Drawing connections between different data parameters

Various third-party software is available for purchase as well to get the power of machine learning and AI. No matter how internet marketing is applied, technology is crucial to enhancing the digital marketing funnel.

  • Marketing to the Ideal Customer
    While promoting a brand to every possible customer in the target market may seem like a great idea, the most benefit comes from only targeting the most valuable members of the audience. It is important to understand the difference between acquiring profitable customers and the customers your competition did not want.

    The focus should be on the return on investment (ROI) of the digital marketing strategy by focusing on the customers that offer the most value to your business. The online marketing funnel should be tailored to that audience to maximize short- and long-term success.
  • Leveraging Brand Value
    A brand carries enormous value in itself. For a digital marketing strategy to succeed, a brand needs to be used to one’s advantage. It is important to demonstrate to the users, at every stage of the buying funnel, that the brand understands their pain points and unique requirements, as well as shares their values. Doing so can help maximize conversions, sales, and revenue and improve brand loyalty.

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How to Create a Digital Marketing Funnel?

  • List out all marketing resources such as websites, blog posts, case studies, and other content.
  • Prepare the platforms that can be used for the above-mentioned resources. For example, images and posts for social media and case studies for email marketing.
  • Organize the marketing resources in stages or assign a stage for each resource. For example, if a case study is applicable for thinkers and users with a lot of commercial intention, then assign both consideration and conversion stages.
  • Prepare a calendar for releasing the content.
  • Create a separate customer database for the customers in the second, third, and fourth categories, and track the progress of the customers. Mention the customers’ stages and deliver the content accordingly.

So, after learning all the tactics, stages, and strategies of the digital marketing funnel, are you ready for a head start in digital marketing?

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Who are the Top-of-the-Funnel Users in Digital Marketing Funnel and How to Reach Them?

The customers who are at the top-of-the-funnel (TOFU) offer the most opportunities for brands. They may not be ready to make a purchase yet, but they are keen to explore and find the next purchase or solution to their problem.

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Strategies for TOFU in Digital Marketing

One can reach TOFU users with multiple digital marketing strategies:

  • SEO: SEO is an excellent online marketing strategy for reaching customers at any stage of the funnel. It helps brands improve their visibility in search results and helps reach users, in the target market, looking for information. It also allows a team to build brand awareness by becoming a go-to resource for users in the early stages of buying.
  • Content Marketing: With the help of a user-focused content marketing strategy, a brand can create relevant content for users looking for solutions to their problems. Content can also be optimized for search with SEO, as appearing at the top of search results is critical as well.
  • Social Media Marketing: Social media marketing is an excellent digital marketing strategy for reaching TOFU users. It is a reliable platform for building brand awareness. Companies can showcase a brand and how it matches user expectations and requirements through the target audience’s preferred social media platform. It is also possible to make quick and direct contact with TOFU users with influencer marketing and make a positive first impression of a brand.
  • Video Marketing: Videos provide customers with information on products, brands, and more, allowing them to choose from multiple options when it comes to resolving a problem with a product or service. Videos can have an immense impact on brand awareness; they can be informational videos, question-and-answer videos, how-to videos, etc.

Who are the Middle-of-the-Funnel Users in a Digital Marketing Funnel and How to Reach Them?

In the middle-of-the-funnel (MOFU), user actions vary from focusing on a specific product to comparing brands. This stage experiences a lot of action, and there are proven strategies for reaching MOFU users.

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Strategies for MOFU in Digital Marketing

Some of the strategies used for MOFU are:

  • SEO: 93 percent of online experiences start with a search engine. Therefore, SEO is the top source of organic web traffic and leads. It serves most stages of a buyer’s journey. SEO can help a website rank higher on search results.
  • Email Marketing: Email marketing, especially opt-in email marketing, is extremely effective for MOFU users. It is low-cost with a really high ROI. If a user opts-in, they actually want to see valuable information, so it is important to meet these expectations.
  • Video Marketing: Four times as many customers prefer to watch a video about a product over reading information about it, and almost half of the users look for videos related to a product or service before visiting a store.
  • Paid Search Ads: On average, 41 percent of clicks go to the top three paid ads on the search engine results pages (SERP). PPC advertising or paid search ads can increase brand awareness significantly. Moreover, most users, who click on ads, believe that online search ads are helpful in finding what they need.

Who are the Bottom-of-the-Funnel Users in Digital Marketing Funnel and How to Reach Them?

The users at the bottom of the funnel (BOFU) are ready to buy your product, visit your location, or call your business. This is why BOFU users offer the most value for brands. Brands, therefore, use digital marketing as well as paid advertising to reach these users.

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Strategies for BOFU in Digital Marketing

The following are a few ways how brands can reach BOFU users:

  • PPC: PPC advertising is used to attract users who are ready to buy. It can help brands reach users who have conducted in-depth research into brands and products. PPC can also be used to remarket to users who have visited the website in the earlier stages of the funnel.

    It is advisable to set a campaign budget that meets the value of potential customers. It is critical to understand a user’s requirements to incorporate their product or service checklist into the ad copy and persuade users to click on your ad and become your next customer.
  • Email Marketing: Email marketing is a proven strategy for BOFU users as it generates 50 percent more sales than any other lead-generation method. Email marketing campaigns can drive users to make a purchase. An effective email marketing strategy can be created by segmenting the audience and understanding user intent. This will help build a customer’s loyalty to a brand.
  • SEO: When SEO is used for BOFU, it focuses on actionable keywords. However, this approach is often competitive. Brands should target every stage of the funnel to reach more users and have less competition.

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Conclusion

Sound knowledge of what is a digital marketing funnel and how to build a sales funnel is the secret formula for success in digital marketing. Even though it is time-consuming, it is worth waiting because of the immense possibilities that open up along with the funnel strategy. Nothing saves time, effort, and resources as much as a well-planned and implemented digital marketing funnel.

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