From a Lead to a Loyal Customer: Understanding the Marketing Funnel for Small Businesses
Marketing is essential for every small business.
Marketing is essential for every small business. However, the way small businesses market themselves has changed significantly with time. Over the years, one word that has become a catchword in marketing is the funnel.
What is a marketing funnel?
A marketing funnel maps out a person's journey from a lead to becoming a customer. Through a marketing funnel, a small business owner can visualize a customer's different stages from a business perspective. The stages range from a prospective customer's initial interaction with a business, where they first learn about a product or service, to their final purchase decision. Small businesses can carefully analyze and evaluate the marketing funnel to understand what they should do to attract customers at different stages to generate more sales, create better brand awareness, and get more loyal customers.
Marketing funnel evolution
Elias St. Elmo Lewis, an ad executive, created the first marketing funnel in 1898 based on AIDA (Awareness, Interest, Desire, and Action).
The marketing funnel has evolved several times since its conception, but the basics remain the same. As a result, some marketers follow the simpler model of the marketing funnel that involves:
ToFu (Top of the funnel): Generate awareness
MoFu (Middle of the funnel): Generate leads
BoFu (Bottom of the funnel): Generate customers
Modern marketing funnel
The modern marketing funnel involves five stages:
Awareness
It is the first stage of a marketing funnel where the goal is to generate the interest of potential customers. Next, the marketers focus on generating awareness for the brand, increasing its reach, and building their reputation and credibility. The different strategies small businesses can use during this stage include search engine marketing (SEM), social media marketing (SMM), content marketing, paid advertising, public relations, and referral marketing.
Interest or consideration
The interest stage is when a future customer considers a brand, product, or service as a way to provide a specific solution to their problem. The funnel narrows down at this stage, and the consumer is now classified as a lead. Here the marketer's goal is to prove to the leads why they are the best choice for them than the competitors by providing proof, showing them the value the product or service can add, and highlighting the strengths.
Conversion
This is the stage where the consumer converts and purchases the product or service. The goal of the small business here is to get as many people as possible that they were attracted at the first two stages to purchase by removing friction and simplifying the buying process. Use strategies like optimizing the checkout process, offering incentives, adding live chat, and pursuing abandoned carts.
Loyalty
The focus of the loyalty stage is customer retention. It costs small businesses less to retain existing customers than search for new ones. Here the marketer takes steps to make the customers come back for more. Some tactics to use at this stage include email marketing, loyalty and reward programs, freebies, and birthday and anniversary discounts.
Advocacy
The last or bottom stage of the marketing funnel is advocacy, where loyal customers are turned into fans. It involves encouraging loyal customers to spread the word and recommend the business to generate new customers. Marketers can use tactics like surveys, referral programs, social shares, and contests and take action to remove friction and improve the business.
Benefits of the marketing funnel for a small business
Some of these advantages include the following:
Increased sales
Better customer understanding
Help focus attention on the right leads
Reap the rewards of a good funnel
Every small business needs a marketing funnel to remove the guesswork and be in the driver's seat. A marketing funnel will help engage prospects, build trust, and create an authentic fan base. It will help understand what is stopping the prospects from converting into customers and take the necessary steps to make the marketing strategy more effective. The marketing funnel will help get the most out of the marketing efforts and grow the business.
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