Marketing: The Funnel and the Pathway

By Spencer Critchley

There are many customer pathways (sometimes called customer journeys) towards conducting a transaction, whether it’s buying a product or donating to a nonprofit. Say, for example, you buy a car. Your pathway, one of many that could lead to buying a car, might look like this:

  • You current car needs repairs more often these days, and relief from the bills would be worth the temporary pain of paying for a new one. Or maybe you just want a hot new ride so people will think you’re cool. Both the discomfort and the desire are examples of the System 1 affects that are the primary drivers of purchase decisions (no matter what we may tell ourselves).
  • You start paying attention to car ads that you would usually ignore.
  • Having see a couple of models you like that are in your price range, you Google them for information and reviews.
  • You go to a car maker’s website and try their online configurator so you can see different colors, options, and price estimates.
  • You drop by a dealership for a test drive.
  • You buy a car.
  • The dealer enrolls you in its owners club, and begins communicating with you is email, direct mail, and other means so as to maintain the connection, make you a habitual user of its repair department, and eventually, sell you your next car.
  • If you live your car, you’ll rave about it to your friends, partly to help them choose their next car we’ll, and partly to enhance your status as a smart buyer with an enviable ride.

By following this particular pathway, you have also traveled through what’s known as the funnel.

The funnel illustrates the process by which a business gains new customers or a nonprofit gains new constituents. It looks like this:

 

The marketing or sales funnel

 

Here are the definitions of the funnel stages, matched with the steps in our car-buying example:

Awareness means simply knowing that your organization and its offerings (products or services) exist.

Example: You see ads for new car models.

Interest is felt by a subset of people who are aware of you. They want to learn more, hopefully because they may want to engage with you in some way.

Example: A couple of cars catch your eye. You Google them for information and reviews.

Engagement is the stage at which interest is strong enough that the prospective supporter wants to “try you out,” by having some kind of experience of what you offer.

Example: You try a car-maker’s online configurator. Then you take a test drive.

Conversion frequently means making a purchase (from a for-profit company) or a donation (to a nonprofit): a prospect is “converted” to a customer or, for a nonprofit, a constituent. But conversion can refer to other marketing objectives as well. For example, if you run a campaign intended to attract new e-newsletter subscribers, a conversion will be defined as a subscription request.

Example: You buy a car.

Relationship is the ongoing connection between the customer or constituent and the organization. It’s important because of what’s known as the "lifetime value of a customer." This is the value of not just a person’s first purchase or donation, but of every additional one that might be made in the future. It can be significant. Furthermore, it’s much easier to keep a customer than to win a new one. So good Customer/Constituent Relationship Management (CRM) is important.

Example: Now you’re in the car dealer’s Owner’s Club, and start getting a steady stream of messages and offers via email and other media.

Advocacy is a stage only a few people are likely to reach. These are people who not only want to maintain a relationship with your organization, but who will promote it to friends and acquaintances.

Example: You love your car, rave about it to your friends, and post about it on social media.

In digital marketing, as in all marketing, we have to think beyond the individual project at hand — web page, email, social media post, display ad, whatever — to how that project fits into a system. We have to think about the people we’re trying to reach, the pathways they might follow, and how those pathways could lead through the funnel to a conversion.

There are two key differences with digital marketing:

  1. There are many more possible pathways, and
  2. They seldom follow a straight line.