The funnel is something most marketers will be familiar with. The great thing about the funnel is its immediate simplicity. It’s a basic concept that is quick to understand and is immensely useful for all manner of marketing from broad brand communications to bespoke tactical campaign planning. It is what you may call, a reliable tool to have in your toolbox.
But like all great tools or methodologies it has rightly come under much scrutiny. If you type into Google “The funnel is dead” you are in good company. There are over 13 million search results… a quick glance down the results and you see reputable brands entering the debate from McKinsey: The Funnel is dead – long live the Consumer Decision Journey, to Campaign, to HubSpot, the funnel is dead long live the HubSpot Flywheel! It seems a great way to get people into the top of your funnel is to write about the death of the funnel itself. Marketing irony.
At Hub we send our account team through the Mini MBA for Marketing taught by Mark Ritson. For those of you who haven’t come across Mark Ritson yet he is one of the most respected marketers on the planet, a columnist on Marketing Week and consultant to many global brands. His take on marketing is refreshingly direct. The structure of the course is set around 10 modules that lead you through the principals of marketing.
In module 6 the funnel comes up. The module is focused on setting objectives and comes right at the end of the strategy section. To recap where this comes in the overall process… strategy is formed after the research phase, which incorporates market orientation, market research and market segmentation. Once this phase is completed you move onto building out your strategy. Here you decide on who you are targeting from your segmentation, then how to position to that target segment and finally what your marketing objectives are. From here on in we move onto tactics. A whole different ball game where incidentally most people start. The central point is if you don’t complete your research and strategy then your tactics are built on zero foundations with as much structure as a house of cards.
Back to the funnel… this was invented in Philadelphia in 1898 by a former advertising agency founder Elias St. Elmo Lewis. He came up with the AIDA model, Attention, Interest, Desire, Action. He talks about the model in one of his first books on Financial Advertising (which will set you back over £100 on Amazon). Tom Roach picks up on the story of the funnel in an excellent article, to say the AIDA model was then utilised by American door to door salesman to structure a single conversation to a closing sale. Since then its growth in both popularity and supposed decline has been attributed to the rise of ad tech and martech companies using it as a ‘catch-all’ to explain how digital marketing works.
But as Ritson states the funnel was only ever to be used as a framework. He illustrates the evolution of the funnel from the AIDA model using the classic steps of Awareness, Consideration, Preference, Purchase, Loyalty and Advocacy. He goes on to say the real power of the funnel is when you convert this into your own bespoke purchase funnel. Use the framework as a tool to build out your own funnel based on the various touchpoints highlighted in your research. So, every business in every sector will have a different funnel. At Hub, we have found how useful a funnel is when its built based on the reality of a clients business. But it doesn’t stop there. The final piece of the jigsaw is adding in the superpower.
From conducting your research and segmentation you should know how much of the addressable market you are currently selling into. By adding this in as a percentage between your Preference and Purchase stage you have your first conversion rate. Calculate this across all steps on your own funnel to determine how successful each stage is to the adjacent stage and you build up a clear picture of the effectiveness of your funnel. Or more importantly, highlight the most ineffective parts of your funnel.
Ritson uses the analogy of a leaky pipe. Our job as marketers is to send as much water down the beginning of the pipe (awareness) to the end of the pipe (advocacy) as possible. But there are holes at each stage. By adding in your real-world data that you have collected you end up with an extremely powerful tool which will direct you to where the focus of your marketing objectives will be over the next 12 months. Fix the biggest leaks first or the ones near the end of the pipe.
Make the funnel bespoke and then add in data to reflect the actual real-world environment you are operating in. You then have a very powerful visual tool for developing proper marketing objectives.
When a piece of marketing theory has remained steadfast since 1898 in its contribution to marketing effectiveness you can’t fail to impress. It’s probably worth writing about to balance out those other 13 million articles…
At Hub we work with lots of brands operating in the investment marketing arena. Defining strategy through research and building into actionable objectives is at the core of our approach. We then move on to tactics using the funnel to build specific content formats to move audiences through the funnel. This methodology becomes even more critical in a retail investor environment where clients cannot buy direct but purchase through a share dealing platform. This illustrates why defining and building your own funnel is so critical when planning to build actual marketing strategies that work.
If you would like help in building your own effective marketing strategy please get in touch with us here at Hub.