If you’ve done any marketing research, you’ve probably come across the term “funnel”. What Exactly Are Marketing Funnels And Why Are They Important?

Marketing funnels are a useful tool that you can use to visualize the path customers are taking from first learning about your brand to converting. Understanding them can provide useful information on why some customers convert – others don’t.

What are Marketing Funnels?

A marketing funnel is a visual representation of the steps a visitor takes from first learning about your brand to converting. The most common type of marketing funnel consists of four steps:

  1. Attention: A prospect sees your ad, social media post, or hears about you from a friend.
  2. interest: You think you can solve a problem and want to learn more.
  3. Desire: The prospect has done their research and wants to convert.
  4. action: The prospect is taking action – they will buy your item, schedule a demo, or take whatever other action they should take.

The promotion may vary depending on the customer and industry. You might want them to make a purchase, sign up, or fill out a form. When someone does something that they’re supposed to do, it’s called a conversion. The visitor converts from browsing to the action to be taken.

Think of the Amazon purchase funnel. There are several steps a visitor must take before they can buy a product. This is how it looks:

  • You visit Amazon.com
  • You see a product
  • You decide to add a product to the shopping cart
  • You complete the purchase

Additional steps / actions can be taken between each of these steps, but they don’t matter in the marketing funnel unless they contribute to the final action. For example, a visitor can view Amazon’s careers page, but they don’t need to be counted in the funnel as these aren’t required steps.

Why are the conversion steps called “funnels”? Because at the beginning of the process there are many people who take the first step.

As people move on and take the next steps, some of them drop out and the crowd gets smaller or tighter. (Even further down the process, your sales team is involved to help close the deal.)

Marketing funnel example

Losing customers may sound like a bad thing, but it isn’t. The truth is, not everyone in your funnel is going to convert. At the top of the funnel, everyone goes in (visiting your website or viewing a marketing campaign). Only the most interested buyers move down your funnel.

So, when you hear people say they are widening the funnel, now you know what they are referring to.

They want to build a bigger network by promoting new audiences, increasing their brand awareness, or adding inbound marketing to attract more people to their website and thus expand their funnel. The more people there are in a funnel, the wider it is.

What are the different types of funnels?

In this article, we will focus on marketing funnels, that is, funnels that start with some type of marketing campaign. This could be a PPC ad, a content marketing campaign, a whitepaper download, a video ad, a social media ad, or even an IRL ad. The point is the first step in the funnel is some kind of marketing campaign.

Other types of funnels you might hear about include:

  • Sales funnel
  • Webinar funnel
  • Email funnel
  • Video Marketing Funnel
  • Lead magnet funnel
  • Home funnel

Despite the different names, they all follow exactly the same thing – the steps a potential customer takes to convert. (Sometimes they’re even called conversion funnels!)

What can you use a marketing funnel for?

You are not limited to using a marketing funnel solely to sign up and / or buy. You can place funnels all over your website to see how visitors move through a particular website flow.

You may want to track the newsletter subscription (viewing the newsletter subscription form> submission form> confirming the email) or a simple page conversion (viewing a subscription page> submitting the subscription).

Find out what your goals are and what you want visitors to do on your website and create a funnel for them.

Once you have the data, you can see where roadblocks are and tweak your funnel. Let’s dive a little deeper into that.

Why Are Marketing Funnels Beneficial?

Marketing funnels provide access to data called a marketing funnel report. So you can see where you are losing customers. This is sometimes called a “leaky” funnel because customers you want to keep can escape the funnel.

Take your average SaaS business as an example. Here’s what a funnel can look like after you:

  • Visited page
  • Signed up for a trial
  • Used product
  • Upgrade to pay

Do people have to use the product before paying? They don’t, but it’s a good idea to track it so you can see if it’s a roadblock.

For example, if you lose a lot of conversions after testing, you may need to update your onboarding process so users understand how the tool is being used or even adjust the top of your funnel so you don’t attract people outside of your target audience.

A real life example of a marketing funnel

Let’s look at a funnel process for a retail store and look at the steps involved in an ecommerce store. We’re chasing a buying funnel.

Marketing Funnels Comparison-Retail-Store-Ecommerce

The ecommerce store is lucky enough to be able to see a funnel as it can track clicks, time on the page, and other metrics. Your marketing would look something like this:

Ecommerce Marketing Funnel

Okay so now we have an understanding of what a funnel is and why it helps. Let’s look at one product that Funnels offer – Google Analytics.

How Google Analytics Marketing Funnels Work

Google Analytics offers funnels that I’ve written about extensively in the past. This is an incredibly easy way to keep track of the path potential customers are taking before converting. Sign in and go to Admin> Goals> + New Goal> Select a goal to create a Google Analytics goal.

Here are a few things you need to know when creating funnels in Google Analytics:

  • It’s a pretty simple funnel: If you don’t want to dive deep into the data and tweak, this is the place to go.
  • You can’t go back and view dates retrospectively: Once you’ve created your funnel, you won’t be able to forward the funnel until the data comes in.

If you’re just getting started with marketing funnels, Google Analytics is a great place to start. Learn how to set up a conversion funnel in Google Analytics.

What is a Marketing Funnel?

A marketing funnel is a visual representation of the steps a visitor takes from first learning about your brand to converting.

What Are the Different Types of Marketing Funnels?

Sales funnel
Webinar funnel
Email funnel
Video Marketing Funnel
Lead magnet funnel
Home funnel

Why Are Marketing Funnels Important?

Marketing funnels provide access to data called a marketing funnel report. So you can see where you are losing customers.

What is an example of a marketing funnel?

Website visited> Signed up for a trial> Used product> Updated to paying customers

Here’s how to create a funnel with Google Analytics

Sign in and go to Admin> Goals> + New Goal> Select a goal to create a Google Analytics goal.

Conclusion

We’ve covered almost everything you need to know about marketing funnels. Here is a quick summary:

  • When someone on your website does something that you want them to do (e.g. sign up, make a purchase, fill out a form, etc.) it is called a conversion.
  • A funnel tracks the steps that lead to this conversion. For example, e-commerce companies want people to buy products on their website. Your funnel can do the following: website visited> product viewed> product added to cart> purchased.
  • A funnel report shows you where people are being dropped on the road to conversion so you can optimize your conversion path and increase sales.
  • Google Analytics offers funnels as part of the free Google Analytics software. It’s an easy and free way to get started with marketing funnels.

Have you created a marketing funnel in Google Analytics? What did you learn?

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