Digital Marketing Funnel Comprehensive Guide: What Is It & Why You Need It?

A digital marketing funnel is among the first lessons if you want to learn how to do digital marketing effectively.

The funnel covers a journey of online customers from the beginning when they are interested prospects to the moment the customers decide to purchase, and even until they become loyal customers.

Marketers can narrow down their targeted audience through each funnel stage to apply more focused tactics and activities. That way, not only is marketing cost reduced, but the conversion rate is also improved significantly.

Please keep reading to understand how the digital marketing funnel works and why it is extremely important to help your business grow while reducing the monthly marketing budget.

What Is A Digital Marketing Funnel?

what is digital marketing sales funnel

The Digital Marketing Funnel is also known as “Digital Marketing Sales Funnel,” “Digital Sales Funnel,” or “Online Marketing Funnel,” is a marketing tactic that helps you visualize and optimize customer’s journey from the first touch to leads, customers, then loyal customers and beyond. It’s the same term with the Marketing Funnel, but in the online environment .

We agree – All marketing efforts are to generate revenue, and a sales funnel aims at persuading prospective customers to seal the deals.

A digital marketing sales funnel combines both purposes.

The funnel visualizes how people – through digital channels, decide to consume a product or service. Marketing activities are employed during that process.

It is called a funnel because potential prospects significantly decrease from the top to the end.

For example, you can attract a pool of visitors to reach your digital landing pages. Yet, only a few are genuinely interested in your products and services. Among those people, the number of end-customers is even less.

Why Does a Business Need a Digital Marketing Funnel?

why digital marketing funnel important

How does the digital marketing funnel work?

It focuses on how your customers make a purchase rather than how the business sells. It is an excellent start to understanding your potential segments.

The benefits of a funnel to marketing activities are undeniable.

Better segmentation of marketing actions.

Customers can find and know about your business in different ways. The role of a digital marketing funnel is to brainstorm all possible events during those customers’ buying journeys.

Marketing actions performed at the touchpoints will help generate and nurture the lead through each stage, driving them into a closer conversation.

For example, content marketing is helpful in the beginning to build brand awareness. Once customers know about your business, you can run remarketing ads on social media to engage and drive them into specific actions.

Better communication and customer experience.

When you understand your target customers and their purchasing behaviors, you provide relevant content and communicate with them effectively.

You should be aware that customers are at the heart of the business. They are likely to stay loyal after providing a timely, easy-to-read, personalized, and rewarding experience. Otherwise, they go for your competitors.

Unclear communication will even result in lower sales, bad customer experience, and negative feedback.

Efficient lead generation.

Both productivity and cost-efficiency are benefited.

Only interested leads will move down the funnel. They are qualified and more likely to take further action. In the end, you can expect a much higher conversion.

A carefully designed digital marketing funnel also saves the marketing cost significantly. You only deliver the right content at the right time and in the right channel, which means you can reduce resources wasted on ineffective content or strategies.

Loopholes identification

Not all marketing activities within the funnel are successful. The digital marketing funnel helps identify the stages and the marketing actions that cause you to lose the most leads.

Thanks to reports and data analysis, you can measure and evaluate the current actions, then correct the mistakes for higher conversion.

The New Vs. The Old Digital Marketing Funnel Model

The Old Digital Marketing Funnel

AIDA marketing funnel
AIDA Model is an old marketing funnel

AIDA is a valuable concept for the marketing funnel so far, in which customers go through four stages from Awareness to Action.

Awareness

Customers know the existence of your products or services. However, they do not understand why they should make a purchase and how to purchase.

In this stage, digital marketing actions should focus on the issues or interests of regular readers and address the problems with TV ads, blog articles, social media posts, etc.

Even many customers will not end up reading out more about your business; they already know your business and products or services. In the future, they might consider searching further when they have related demands.

Interest

Those who go through the first stage are those interested. There is a higher likelihood that you can drive them into actual customers.

In this stage, leads spend more time reading about your business, and you had better prepare relevant digital marketing actions at hand to maintain and increase their interest.

Some recommended tactics are to use explicit, easy-to-navigate, personalized, and humorous content, slogan, and imagery.

Desire

Your potential customers are very close. They feel like they want your products or services.

Advertisement or product trials are in the best-case scenario to enhance the desire to purchase. You will want to emphasize the advantages of products and services in their daily lives.

Action

Aroused desire will soon be transferred into an action to purchase products or book an appointment with salespeople.

At this ending stage, marketers should employ compelling “Call to Action” images or messages – for instance, “Buy Today to Get 50% OFF”, “Only 5 Items Left”, or “Talk with Us,” etc.

The New Digital Marketing Funnel

New digital marketing funnel

With the AIDA funnel in mind, modern marketers transform it into a new digital marketing funnel with more details – up to ten steps. All efforts should address behaviors that drive a user and focus on a non-linear experience.

All steps are divided into two main stages: Pre-Purchase and Post-Purchase.

Engagement

The engagement stage is similar to brand awareness when customers try to find out whether your business is relevant to them.

You can cast a wide net by delivering value to those who might be interested. Rather than being directly connected to the products or services, marketing activities are open to any topic – as long as customers can find you and have a positive impression.

Education

This is the problem identification stage. Digital marketing efforts should help customers realize that they have a problem that needs resolving.

Take online content marketing, for instance.

You can address pain points, challenges, and opportunities to get better results. It is even better to suggest a solution at a high level. There is no need to mention your products or services at this step.

Research

After knowing the problem, your audience will research available solutions, asking what factors to consider and alternatives.

It would be best if you still concentrate on the solutions instead of products and services. Listing-type articles or comparisons are recommended tactful ways.

Evaluation

Your customers already research and get enough education to have a checklist in their minds.

It is time to make your products and services central focus. According to the defined checklist above, we recommend discussing technical specifications, value propositions, features, use cases, etc.

Justification

Customers already “desire” your products or services but need more proof to justify the value and make the decision.

Discuss more the ROI, social proof, flexing brand strengths, differentiators that might help.

Purchase

In this stage, the target is that customers take action.

You must ensure a smooth and comfortable transition process where all new concerns, questions, and objections are addressed quickly – a direct salesperson is effective.

Adoption

While the AIDA model stops when customers make a purchase, the modern digital marketing funnel has a post-purchase stage, including four steps: adoption, retention, expansion, and advocacy.

You need to deliver the products and services with the promised quality and smoothness during the adoption step. Product manual guides, tutorials, success checklists, or kick-off meetings should come into play.

Retention

Digital marketing is also about how genuinely you care for customers after their purchases. That way, they might feel the love with the products and services – the very first key to drive them into the next expansion and advocacy steps.

Educational content, tips/best practices, version updates, communities, etc., are for your reference.

Expansion

When you succeed in retaining customers, they will come to you first upon a coming problem instead of looking to your competitors. The more trust you earn from your customers, the better you have chances to sell cross-sell or upsell products or services.

It is well worth remembering that marketing for existing customers is much easier and more time-saving than targeting new ones through the funnel.

Advocacy

The ultimate destination of the modern customer journey is advocacy, meaning the existing customers build loyalty to your brand.

They tend to talk favorably about your products and services and share positive word-of-mouth messages with others. Such endorsements and willingness are extremely valuable, high-convertible, and almost cost-free.

Why Did The Digital Marketing Sales Funnel Change?

why digital marketing sales funnel change

Technological advances have facilitated the way people find and purchase products and services significantly. When customers change their paths, the traditional digital marketing funnel shows their ghosts.

1. Misconception: “Customer buying journeys are linear.”

Back then, customers started with the highest stage, “awareness,” and walked through each stage until they purchased.

In fact, customers now behave differently and are self-directed. They can enter the journey at all stages and even skip one or several steps altogether. The customers sometimes move back and forth and stay at one stage indefinitely other times.

Modern funnel is about bridging all stages and ensuring that potential customers can find your business at any time.

2. Customers enter the buying journey at any stage.

Again, you will want to remember that there are no longer designed “first” or “last” stages. There are many gateways through which customers can enter your universe.

For example, customers might be already well-nurtured by your competitors, yet they find you when searching for some alternatives. The customers can make a purchase directly, knowing that they need your types of products.

3. The old funnel ignores what happens after customers’ purchase.

As we mentioned above, the AIDA digital marketing funnel focuses on the pre-purchase stage more than on enhancing the relationships with already-paid customers.

Do not forget the marketing 80/20 rule: 80% of your company sales come from 20% of your customers.

In the traditional funnel, you invest most of your marketing efforts in catching new customers during their buying journey.

4. There is a lack of granularity.

Simplification of the customers’ journey sounds helpful to specify digital marketing activities. You are making assumptions that all customers behave the same ways and require the same treatment. In the end, the results can hardly be that optimistic.

Being granular means, you must cover all the bases and scenarios, such as challenges and barriers facing different customers at each stage.

5. The old funnel does not account for external factors.

The AIDA funnel assumes that only digital marketing activities are enough to drive leads into customers.

It does not mention other significant impacts such as word-of-mouth from peers or efforts of competitors. This causes customers to skip some stages of the funnel.

With such shortages, the birth of new digital marketing sales funnels is inevitable.

3 Types of Digital Marketing Funnel

types of digital marketing funnel

#1. Hourglass Digital Marketing Funnel

Hourglass digital marketing funnel

We have discussed one new hourglass digital marketing funnel we introduced, indicating that modern marketers should pay attention to pre-purchase and post-purchase focal points.

The funnel you are checking now is another version with more steps, including four stages rather than two.

  • Demand generation: Awareness, Knowledge, Interest.
  • Conversion: Consideration, Intent, Purchase.
  • Relationship management: Activation, Repeat, Preference.
  • Propagation: Loyalty, Referral/Endorsement, Advocacy/Evangelism.

Otherwise, we know the hourglass funnel, which only has seven steps.

Hourglass digital marketing funnel diagram
  • Know – It is similar to the awareness phase. Advertising, search, or referrals can start here.
  • Like – In this stage, customers are interested in your business and find some reasons to come back later.
  • Trust – Some digital materials such as customer success stories, reviews, testimonials are of your currency.
  • Try – This is a new step between the “desire” and “action” stages. Customers are still in two minds, wondering whether your solution works for them. Thus, they ask for eBooks, demo calls, webinars, trial periods, etc.
  • Buy – Once your products live up to customers’ expectations, they are ready to buy. Your priority is to orient those customers, exceed their satisfaction, and even surprise them.
  • Repeat – In this stage, you should provide an additional review process, plus upsell or cross-sell touchpoints.
  • Refer – It is successful in turning happy customers into referral customers. They can help expand your leads dramatically.

Whatever number of steps the hourglass marketing funnels might have, the principle is to focus on your existing customers so that they can refer and invite new leads into purchases – without having to drive them through all stages.

#2. Looping Marketing Funnel

Looping digital marketing funnel

The Looping marketing funnel is a sales cycle process that converts a potential customer from brand recognition to purchase decision through 4 stages: Awareness, Consideration, Purchase, and Post-purchase experience

The idea of looping the marketing funnel was raised by McKinsey & company – a worldwide management consulting firm. They assured that customers have an ongoing experience with the business so that they will have further interactions even after the purchase.

Like the other funnels, customers start with a set of initial considerations. They will step further into an active evaluation process to gather more valuable information and decide to buy products or services.

The difference from the old linear model is that customers tend to return for another purchase after enjoying the old products, advocating for your business, and even making a bond.

People also call it a loyalty loop funnel since the purchasing journey is a continuous loop until customers stop preferring your business.

Your rivals might offer similar quality at a lower price (the same-for-less positioning strategy), or their product packaging can be more appealing, the customer service is more dedicated. That time, your digital marketing activities should be changed to be more consistent and lively to retain your customers.

#3. Micro Moments Digital Marketing Funnel

Micro moments digital marketing funnels

Google knows online customers very well. Therefore, since they introduced the new concept “micro-moments” in 2015, this new digital marketing sales funnel has been popularly discussed and applied.

The concept assesses the buying journey in hundreds of intent-driven and real-time micro-moments.

Accordingly, micro-moments happen when users turn to a device reflexively to learn, do, discover, watch, or buy something. Decisions are made during those intent-rich moments.

Following four stages, you can adopt the micro-moments digital marketing funnel supposing that your customers search for information on a smartphone.

  • I Want to Know moments: In this first stage, customers are exploring for valuable resources, educational information, or inspiration. They tend to be curious about maps, addresses, and location-specific content of particular places.
  • I Want to Go moments: Customers are still interested in gathering information rather than making a purchase. They often desire to know “near me” locations for specific products or services.

For instance, it is understandable for customers in a new town to look for a local search to uncover the hip new restaurant or coffee shop. If you run a relevant business, you should improve your Google My Business listing with more information.

  • I Want to Do moments: Your leads almost feel like taking action, yet they need more “how-to” instructions. Tutorial articles are popular so far. Nonetheless, we suggest you consider video content since customers like loading and watching the tutorials quickly.
  • I-Want-to-Buy moments: Congratulations, you have to drive your leads into the last stage. Their soon-to-be buyers tend to assess prices and require a smooth checkout process.

Components of An Internet Marketing Funnel

internet marketing funnel components

In the next part, we will get insight into how to create your digital marketing funnel by dividing it into three main components.

  • Foundation in which you try to define objectives
  • Floodgates to get traffic into your funnel
  • Sales funnel that will finally move traffic from the top stage to the bottom one

Foundation

Never sit down and draw out your marketing funnel without building some foundation knowledge. Otherwise, your digital marketing strategy might fall short.

We would suggest conducting a competitor analysis, SMART goals, and most importantly – establishing your buyer personas.

The personas often include geographic information, age, gender, income, education background, job role, pain points, opportunities, content preference, etc. All in all, it focuses on the behaviors and habits of customers to create a value ladder and content mapping.

Floodgates

They refer to the sources of traffic to your funnel, including but not limited to social media, search engine optimization (SEO), paid ads, marketing events, email marketing (cold outreach), etc.

The best practice is to utilize as many sources as possible.Social Media Marketing

The benefits of social media marketing are undoubted. They help increase customers’ engagement into the funnel and keep loyal buyers posted on new digital campaigns.

You will want to copy the three E’s rule when it comes to social media posts:

  • Education – the content should be educated on topics that are relevant to your industry.
  • Entertain – the posts should be humorous and with your business’s culture.
  • Engage – frequent messages, comments, polls, or surveys will also help.

It is necessary to avoid landing a hook all the time. Instead, you should deliver superb information, engage them, and add the hook later when people are ready to sign up or enter the funnel.Search Engine Optimization (SEO)

Optimizing digital content on the search engine (Google, Bing, Safari, etc.) is less direct than the social posts. Nevertheless, this floodgate ensures a long-term approach to get traffic to the funnel.

You must follow the SEO techniques and create green-ever content.Paid Advertising

The most common digital advertisements are Facebook ads and Google Awards, and they are effective in casting a net to your audience in the first awareness stage. However, you need to consider the advertising cost carefully to make sure it is well worth it.Marketing Events

Some recommended events are online webinars or in-person charity events. They help connect prospective leads with useful content and direct conversation.

If the topics are general, you can collect the first audience. However, you can also use marketing events in the Interest or Justification stages.Email marketing

One of the best digital strategies is email marketing automation. It is usable in the interest stage, where customers might sign-up for something on your websites.

Digital Marketing Funnel Stages

Digital marketing funnel stages

As you can see, there are so many types of digital marketing funnel on the market depend on the creator name it. So, there will be different sales funnel stages are available to marketers. However, when we look closely, The digital sales funnel ends up with three main stages:

  • The lead magnet
  • Amplifier
  • and conversion.

1. The Lead Magnet

In exchange for the email address or impression on social media, the lead magnet is involved in sharing free value with your prospects. Importantly, you need to keep it gated with some “Call to Action” purposes.

Some common forms of lead magnets are ebooks, checklists, case studies, webinars, templates, whitepapers, manual guides, etc.

Whichever you choose, we suggest eliminating all distractions on the magnet, ensuring a small number of links away, offering clear and competitive incentives, etc.

2. Amplifier

After creating the first connection with the potential leads via the lead magnets, you must attract them to stay longer and take specific actions. It is the main responsibility of the amplified components.

Some available tools are videos, customers’ feedback, testimonials, demo versions, social proof, or webinars.

The amplifier should be included in the Desire or Evaluation stage.

3. Conversion

Do not make the conversion actions tricky or hard to access unless you want customers to leave for somewhere else.

One tip is to ensure that the Call-to-action buttons or forms are easy to find. You can place one at the top of the screen and another at the bottom.

A rule of thumb is to collect the information you really need. To do so, you need to use more analysis tools.

Common Mistakes When We Create Digital Marketing Sales Funnels

Digital marketing funnel mistakes

1. Treating A Sale As The Conclusion of The Funnel

In every digital marketing funnel, prospects are expected to turn into customers – either by buying products/services or taking one action that benefits your business.

What next?

Those customers do not just vanish, so conversion is apparent, not the conclusion of the funnel-like what we assume in the traditional AIDA model. If your business satisfies customers, they can become loyal fans and brand advocates who make repeated purchases.

Applying new digital marketing funnels will help correct the mistake.

2. Letting Prospects Go

Another mistake is to let the leads slip away without reminding them.

Just because people left with no purchase at the first time does not mean they have no interest in your business. They might forget what they are doing or need more time to make a decision.

They are still very potential leads whom you should retarget and remind of your business.

3. Not Integrating the Funnel into Content Strategy

Many marketers think of content and digital marketing strategy as two different worlds.

In fact, they should be well-integrated. The funnel gives direction to content; meanwhile, content delivers values such as humor, authenticity, entertainment, information, or empathy to move prospects forward.

It is important to map out content for each stage of the digital marketing funnel.

4. Not Updating Your Marketing Funnel Strategy

Knowing that technologies evolve and change customers’ buying habits, you should be ready to pivot the digital marketing funnel along with them.

Never think of the funnel as a one-time effort, and you should instead catch on to the change and optimize the funnel with more steps and scenarios. Replacing the old AIDA model with one of the new funnels is an example.

5. Being Impatient With New Ideas

You are open to funnel updates, which is great. However, you might not be successful unless you give the updates a proper time to shine.

No business can take off without giving each idea a proper time to shine.

Discuss the content marketing efforts as an instance.

Even the most awesome content needs time to be presented on the first search results page. However, many businesses just pull the plug on the content plan when they do not see instant success.

6. Having Too Many Distractions In The Funnel

New funnels often have many stages; you might end up adding unnecessary distractions on each step, trying to cast a net for as many prospects as possible.

For example, you have multiple pop-ups and buttons on your landing pages, and your leads will not know where to click. You should have one or two options only: Buy Products or Schedule a Call with Us.

Or, you try to mention a large topic with bulks of content. People are tired just by scanning it. Breaking down a large topic into a series of relevant content is a good practice to avoid information overload.

7. Having A Weak Call-to-Action Message

All efforts go in vain if you cannot provide a strong sales offer at the purchase stage. Imagine your sales funnel as a chain and deliver clear Call-to-Action messages accordingly, such as “Click Here to Learn More,” “Provide Contact Details,” or “Make Purchase.”

Some tips for creating a sellable Call to Action:

  • Creating a sense of urgency 
  • Trying to be engaging and persuasive  
  • Using actionable language as direct instructions
  • Not requiring too much effort and commitment when customers make a purchase.

8. Ignoring Or Misreading Analytics Data

Conversion rate data is of a significant value. Nonetheless, many marketers fail to utilize their data, blaming that analytics tools are hard to understand.

Without data, you find it hard to understand why leads leave the funnel and identify which areas to improve.

As a digital marketer, you had better learn how to check and analyze the data from today.

Conclusion

It is coming to the end of today’s discussion on the digital marketing funnel. What to take away with you is the importance of having a specific funnel for your digital marketing efforts and understanding several available funnels to pick up your right one.

Having a suitable funnel will provide directions to your specific planning and digital marketing strategy in the near future. Otherwise, all efforts will fall short of your goals.

You should also grab some common mistakes from other businesses to avoid them while doing marketing.

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