Marketing: Purchasing funnel basics

Marketing: Purchasing funnel basics

First and foremost, I am not a marketing expert and I have never worked in marketing. This article is meant to be a basic 101 on marketing – traditional and digital – for small business owners and start ups. Moving from consulting to corporate to start up – and working with so many small business owners on the side, I constantly find myself explaining marketing. So here it is.

Marketing has undergone a massive evolution in the last 20 years thanks to the internet and the growth in digital channels.  Marketing is full of weird lingo and terminology that only agencies and marketing managers understand. My intension here is to give a good practical grounding – so some of my sweeping definitions will be just that. Deeper understanding and nuances you will learn as you continue down the rabbit hole into the dark art of marketing.

FYI: I will use product and service interchangeably in this article. There is some much of both these days, and its painful to type “product or service” in every instance. Same goes for “potential customer” and “customer” – you get it.

Before we get into marketing and advertising, lets first align on a simple purchasing funnel or customer journey when engaging with your industry and brand. We will explore why and how to target customers at different stages of the purchasing funnel in a future article.

Purchasing funnel

This is a simplified view and it isnt linear. People jump around and the “repeat business” end is very chaotic. But it is a helpful framework to think about where customers heads are at at any given point.

Awareness

Awareness comes in two different forms: Product or offering awareness and Brand awareness

Product Awareness: potential customers need to know that your solution is actually in existence. Not yet your brand. Lets take for example Marlboro cigarettes. When mass produced cigarettes were invented to compete against disgusting chewing tobacco, the first person to invent them would have had to go out and educate the market on what a cigarette is. The name “cigarette” would have had to be coined. People would need to understand what it is, how it is used, its benefits and features.

Think about other products and services:

  • The iPod
  • The ab-blaster
  • Tablets
  • Compact Discs
  • The motorcar
  • Denim jeans
  • A lighter (to replace matches)

Before anyone could go into a store and ask for a lighter – they needed to know a lighter exists.

In modern times, where new inventions and services are being developed at a rate of knots, market education is a big part of what companies need to do. Some companies, as with the iPod, integrate the education of the market with the brand and product trade mark.

Im going to “uber” to the restaurant – app based taxi hailing.

Ill “google it” – internet search service. 

Brand awareness: once a market knows about a product or offering – or has had the need for some time and / or buys competitors products – you need to let potential customers know that you sell the particular product or service.  AND what differenciates you in the competitive market.

“Hey, we’re Marlboro. We sell cigarettes to adventurers, tough guys and those who take the road less traveled”

“Hey, we’re Apple. We sell computers and laptops for those refined types looking for a sleek product to process their films and photographs on. Be seen at the coffee shop on an Apple!”

“Hey, we’re Microsoft. We have a software solution for all of your functional business needs. We are all about utility and productivity for people looking to get stuff done.”

Customers need to be AWARE of what you sell and WHY you are selling it to THEM.

The painful thing about innovative new products is that you have to invest in educating the market that something exists and that they should try it and they should try yours.

The awareness step may seem silly – and it may be depending on your industry and product line – but at some point, a customer needs to become aware that they could buy your product if they wanted to.

Consideration

The next step in the customer journey is shortlisting your product.

Think about t-shirts. When someone mistakenly throws a pair of their significant others red underwear in a white load and ruins their white t-shirts – they are immediately AWARE that they need new t-shirts.

Now, which 1, 2 or 3 t-shirt brands immediately spring to mind?

Or does an online clothing store spring to mind to go and browse t-shirts?

This is the consideration phase. “I know you exist and sell t shirts – I am now thinking of maybe buying one of your t-shirts.”

Activation

This is the micro moments around interacting with the t-shirt that really push me towards the checkout. I go online and search for t-shirts. The designs resonate with the brands essence. There is a helpful tool to help me figure out which fit I want – slim fit versus regular. There is a big, prominent button that says “Add to Cart” with a message underneath saying I get “free delivery”. Im feeling like there should be nothing standing between me and this t-shirt and I toss it in the cart and pay conveniently by credit card.

This is the critical activation step.

Lots of people staring at your products in store? On your webpage? At your market stall? But few actually checking out? They may need a little push.

How much does Nike invest in their stores? A ton. But surely if people are walking into the store then they want Nike goods? Yeah – sure. Doesn’t mean that they wont just browse and leave. That entire store - sales people, colours, music, layout and product placement – is purposefully designed to get you to buy something and not leave empty handed.

That is activation.

  • Door to door salesman – activation
  • Jehova’s Witnesses – activation
  • In store wine tasting – activation
  • Try it for free – activation
  • 30 day money back guarantee – activation

Conversion

Simple – someone pays you and then owns one of your products.

Loyalty and Repeat Business

You want your customers to keep coming back (unless youre in the coffin business…).

They have already gone all the way through the funnel – found you, your brand and been interested enough and ACTIVATED enough to try it out. If you deliver on your promises of brand values and quality, it should be really easy to get them to buy your crisps / t shirts / cars again, right!

Better yet – if they love your stuff, they will tell their friends about it. Maybe even become an informal brand ambassador and post picture on facebook in their new t-shirt, next to their new car, in their new gym gear. Free and powerful advertising to their group of friends and followers.

Stepping back on the funnel as a whole

Purchasing funnel

As discussed, the funnel is seldom linear. I see brands and forget about brands. I don’t need a Nike golf shirt until I see Tiger Woods in the Masters and Im like “shit, he looks so good in that combination, I should get me some” – straight to activation where Nike is investing in brand awareness advertising.

A salesperson ignores me in store and Im now back to considering other brands – or worse still, I don’t buy a product at all!

Ive been a Nike person for years and Adidas invests in an awesome activation campaign in a local shopping mall. Suddenly I own 3 Adidas gof shirts, 3 pairs of shorts and Adidas sunglasses – yet Ive been aware of them for decades. What is this sorcery?!?!?!

Having said that, the funnel is a great way to think through where your customer is in their journey.

Who are they?

What are they thinking?

What are they feeling?

What information do they need to move forward?

What will cause them to move backward?

Who else are they thinking about at this point? Why?

How do we best reach them and serve them given where they are?

You will see how powerful this becomes when we start over laying marketing channels and media over the funnel in a future article.

The other elements which are critical to the customer through this process is consistency and trust. There is no better way to shake up the funnel than to sell a tough guy, adventurouslifestyle in your cinema brand advertising, but when someone goes to try out your cigarettes, there is a picture of a cat on the box.

Your Youtube video is hardcore and edgy with tattoos and piercings and motorcycles but your spring range of t shirts has grumpy cat on it.

The same customer is going through the funnel. How you engage with different customers in different stages and how you engage through the stages must be consistent.

And, most importantly, must be consistent with who you are as a brand and company and the products you eventually sell.

Problem Solving Step 3/7: Prioritisation

Problem Solving Step 3/7: Prioritisation