The Funnel to Nowhere

Mar 23, 2015

BY BROOKE NIEMIEC – VP, MARKETING STRATEGY

I recently attended a meeting where three different versions of a purchase funnel were presented. The orientation was different (vertical vs. horizontal) and the terminology was different (“consideration” vs. “intent”, “conversion” vs. “purchase”), but they all shared a common trait. Specifically, these purchase funnels were all presented in a linear fashion, so they ended up oversimplifying the decision-making process. I did see a hilarious version of a purchase “funnel” that was circular and looped back into the first step: “Awareness.” I’m not sure about you, but I would hate to be in a situation where my customers literally forget who we are after they purchase our product.

Figure 1

The reality is that consumer decision-making is pretty much never that linear. Deciding to purchase something is a messy process that looks more like a plate of spaghetti than an actual funnel. As much as consumers like to think they’re rational, they are influenced by so many factors that it’s almost impossible not to be sidetracked along the way. As marketers, we need to be conscious of this meandering path as we’re thinking about how to manage our customer relationships.

A more common purchase path may look like this:

Figure 2

Although I’ve picked on the purchase funnel a bit, it’s actually a useful tool. It makes sense that customers need to become aware of a brand and eventually move toward the ultimate goal of conversion. The primary drawback with the funnel model is that it stops at the point of purchase, effectively dumping a stream of customers into a nebulous pit.

Figure 3

The end of the purchase funnel actually reflects the starting point of longer-term engagement with your brand. A better Customer Lifecycle framework expands the funnel into a (hopefully) never-ending loop of increasing loyalty, where efforts are expended to develop current customers and keep them there.

Figure 4

In this model, customers are broadly grouped into non-customers, new customers, active customers, and lapsed customers. Within each phase, personalized treatment strategies can be developed to directly address the needs of that particular customer group. To oversimplify the concept with high level examples:

  • non-customers can be targeted with brand marketing,
  • new customers can be convinced to make a second purchase,
  • active customers can be thanked for their loyalty, and
  • lapsed customers can be targeted with a re-activation offer.

The strength of this model lies in its view of the customer base across their entire relationship with the brand over time. Rather than dumping customers in a pit after purchase, this framework encourages marketers to think about how to keep those customers engaged for the long run.