The underlying purpose of marketing is to connect with people to convince them to buy. The process of doing that, however, is not as simple. Successful strategies require understanding not just what motivates consumers to decide to buy and the purchase trigger points along the way, but the different stages that lead to purchases.
The consumer decision journey along the purchase funnel is often referred to as the marketing funnel. It is essential to understand the concept of the marketing funnel and its aspects in order to develop the most effective marketing campaigns, to convert prospects into actual customers and guide the sales process’ evolution in the development of a customer relationship management (CRM) system over time.
The consumer decision journey is essentially comprised of the various “touch points” – before, during and after the sale – that influence the decision to buy. Amazon.com, for example, offers targeted product recommendations to customers when they log in that are based on their past purchase history. Zappos.com considers the point of sale and point of return to be critical points in the customer decision journey and accordingly instituted free shipping, both ways, and a 365-day return policy.
The purchase funnel has various iterations, the modern one being the most consistent with the average behavior of a customer throughout a sales process – tracking to the stages they go through before and after they buy. The modern purchase funnel is typically comprised of seven stages.
- Awareness. Making people aware of your brand can be based on a communications message using mass media advertising, word of mouth and social media, or independent discovery.
- Research and Familiarity. Once aware of the brand, prospective customers who have decided they want or need a product like yours will start doing their homework. They will begin learning the features of your product, comparison shopping and asking friends for their thoughts, for example. The greater the value of the product, the more time is spent in this phase.
- Opinion and Short List. This is the stage when the consumer decides on the most likely purchases. Opinions are solidified and the list of options is narrowed down.
- Consideration. This phase advances the consumer’s action in the decision-making process. This is when test drives are taken, product demonstrations attended and soliciting opinions of acquaintances that have already made the purchase are collected.
- Decision and Purchase. This is when it’s time to for the consumer to engage in the purchasing procedure.
- Advocacy (or sabotage). It doesn’t take long for the new customer to form an opinion on the product and brand. Positive or negative, there’s a high likelihood that opinions will be communicated, especially given the ease for doing so through social media.
- Repurchase Intention. All marketers know that it is easier to keep and grow business with existing customers than to bring in new ones. Marketing’s job is to ensure they are pleased with every purchase and that there is a high likelihood they will consider buying from you again.
But even at that point, the battle isn't won yet.
It’s up to marketers to build and bolster touch points that effectively influence people and move them through the marketing funnel stages. But several factors have complicated the consumer path to purchase and challenge marketers’ creativity in responding.
First, the explosion of media and products makes it harder to get brands to stand out in the crowd. Secondly, it’s no longer sufficient for marketers to talk “at” consumers. The shift to a two-way dialog makes it incumbent on marketers to more systematically manage the customer relationship and word of mouth influences over their purchase decisions.
Research by McKinsey and Co. found that two-thirds of the touch points in the first four stages of the purchase funnel involved consumer driven marketing activities, largely driven by Internet-based channels, from social site recommendations to reviews and blog commentary.
This makes it essential that marketers consider the marketing tactics that coincide with the stages of the marketing funnel. For example, at the awareness stage, among the online marketing tactics to increase visibility could be creation of a Facebook business page or campaign, supported Facebook ads. To build advocacy or loyalty, at the other end of the funnel, the business website and Facebook page could solicit and feature customer success stories, or a real-time chat function to help troubleshoot issues and collect vital data.
It takes the development of insights into people and what makes them buy; combined with a good understanding of marketing and its underpinnings to put the marketing funnel to work. Done right, it can achieve the need to build three critical consumer elements – awareness, desire, and trust – to deliver improved returns over time.