How to Create a Marketing Funnel

A marketing/sales funnel, or Funnel, represents a user’s journey on a website or App. The Funnel represents each touchpoint from the initial stage when a user learns about your website to the actual conversion, where they decide to buy an item or subscribe to your service. It can extend through the entire life journey of the customer.
In this article, we will explore the process of creating a funnel, optimizing it, and managing to get the most value from it.

What is a Funnel?

Every company wants website visitors to arrive at the landing page and engage with their product or service offerings. They want their user journey to follow something like the following:

  • Learn about your brand/search for your product or service
  • Land at your website
  • Browse through your website
  • Make a purchase or subscribe to your service
  • Visit later and buy more

These steps described above are the stages that make up the Funnel. But it’s called a funnel because the number of people present at the first step is high and at the last step is low, which creates the shape of a funnel. The Funnel is also called the Marketing or Sales Funnel based on the intent; the marketing funnel is used to attract the visitors with a reason to buy, and the sales funnel is used to draw the visitors from the Marketing funnel to buy once and then continuously many times.

Stages of a Funnel
The entire marketing funnel works as a unified process. Every section needs to work perfectly for the user journey to be successful. Many things can reduce friction in the Funnel. For example:
Awareness: In this stage where potential customers are made aware of the brand and its offering through strategic content and marketing strategies that aim to educate the customers, capture their engagement and lead them to the website
Consideration: Once a user enters the website, the next step is to get them to start skimming, comprehend what they are looking for, provide relevant offers to leverage the power of the crowd through social proof, and encourage them to make a purchase.

sales funnel

Conversion: This is the ultimate goal of every website – the action that every brand seeks from the user. In this stage, you fine-tune the journey that leads to a seamless “purchase” experience. Considering the increasing drop-off rates along the Funnel, the number of users who make it to this stage will be considerably lesser than the number who started at the beginning. Therefore, it becomes crucial that companies achieve high retention at this funnel stage.
Note that users drop off along the path of the Funnel from top to bottom; the goal is to minimize the drop.
Loyalty: A loyalty program with frequent discounts, email interactions, and social media maintains customers.
Advocacy: Open-minded customers in the loyalty program support your future marketing funnels and recommend their friends in your offerings.

Marketing Funnel Example
Let’s take the case of an online eCommerce company that deals with customized women’s accessories and regular women’s products. Their market study has indicated that most potential customers are first-time customers who use social media platforms to achieve insights, share reviews, and shop on the eCommerce site.
Having determined the target audiences, the company proceeds to run Facebook and Google Advertisements to drive first-time visitors to its eCommerce website. With potential buyers arriving at the website, the perfect situation for the company would be to have first-time visitors signup and move along the Funnel. This way, first-time visitors turn into leads continuing their journey in the Funnel.
Now the nurturing step, over the next few days, the company sends out informative emails to these leads, educating and informing them about its products offerings and discounts. At this stage, the company may also add specific incentives, such as first-purchase coupons, subscription offers, etc., to get the prospects to convert and continue their journey in the Funnel.
Conversion is critical for businesses. Nearly seven percent of customers leave after their first purchase. The average return rate for first-time visitors is less than twenty percent, and repeat customers spend twenty percent more than first-time customers.
This is why companies need to repeat the process and continuously engage with the customers to make them purchase again from their website. Ongoing engagement is a vital part of the Funnel, yet one that is frequently overlooked.

How to Build an Effective Funnel

Now that we have the funnel basics, let’s focus on building an effective funnel. But before we do, let’s discuss each step of the Funnel in detail:
As we’ve seen earlier, the marketing funnel consists of 3 broad stages- awareness, Consideration, and conversion. These stages serve three specific purposes, namely-
• Lead Generation [Awareness]
• Lead nurturing [Consideration]
• Sales [Conversion]

funnel building steps

Lead Generation

This funnel step is all about the marketing campaigns run by companies and customer research that make up the awareness stage. 

invest in lead generation

To engage with the consumers at this step of the Funnel, companies need to invest in marketing campaigns, writing articles, webinars, social media, and Google search ads to maximize their outreach and capture the attention of their target audience.
Lead generation should be an ongoing process as it entails a long cycle and takes time to see the result. Companies that invest in understanding their target leads at this stage can show relevant and engaging lead-generation content. These days, companies can use many customer journey builder tools to engage, nurture and convert potential leads along the Funnel to the next step in the Funnel.

Lead Nurturing

Lead generation must be followed by lead nurturing. In this step, customers are introduced to the company’s offerings and product positions through engaging content and discounts.
Emails, targeted content, newsletters, etc., are common ways companies nurture their leads and move them along the Funnel and on their path to conversion. It is also crucial for companies to remember that at this stage, potential customers are looking for more information about the company’s products and services.
In this step, companies must educate and advise the potential customers about the products through free trials, discounts, etc., using automated email campaigns and targeted ads.

Sales (Conversion)

At this step of the Funnel, the potential customers are ready to receive marketing and sales info that advocate the quality of a company’s products.
In this step, you can do demos, trial offers, free samples, etc., to build trust through sales and relationship management.
The metric in this step will be either the purchase or the “conversion” of the user from being a ‘prospect’ into a paying customer at the end of the Funnel. A user’s journey through the Funnel is long and often time-consuming, but given the right nudge at each step, companies will undoubtedly be able to improve the conversion rates as the funnel winds down.

Practical guide in building a Funnel

How to build a marketing funnel? In this section, we will explore creating a Funnel.
Identify your target customers
The first step in building a Funnel is identifying your target customers. You can use tools like Google Analytics to place your website visitors and perform social media market research to know your potential customers for your products or services.
Get target customers’ attention
Even the most awesome Funnel won’t fetch you the results unless you can attract your target customers to enter the Funnel. Your Funnel can only begin functioning when the target customers enter it. The process starts with getting the right content in front of your target customers. Write SEO-optimized content like articles, blogs, case studies, etc. Use Google paid and Facebook ads to get your customers to read your content and grab their interest and attention.
Get target customers to visit your landing page
Now that target customers have started engaging with your content, and you have their engagement, it makes sense to lead them somewhere, correct? You would need your target customers to reach your landing page, which explains your product or service offerings. The main aim of this page should be to guide them to the next step in your Funnel, a clear call-to-action that makes them download your article, case study, or sign for a newsletter by giving their email.
Get started with nurturing campaigns
Now that you have the target customers’ email, your next step is to send marketing emails with discounts and coupons. However, make sure not to flood them with constant emails. Keep the frequency of your email campaign just what’s needed to stay on top of their minds, not bombard them with emails. Familiarizing, promoting, convincing, and making an offer they can’t refuse is part of the “lead nurturing” step. At the end of this nurture period, you should have encouraged your potential customers to convert and make a purchase decision.
Start the Funnel building process
To get new customers, convert and grow your customer base, it is essential to retain the new customers. The funnel steps contain both customer acquisition and customer retention. Continue engaging with your existing customers, encourage trust, build loyalty and keep them interested in your growth as they are a part of overall funnel success.
What makes you apart from your competitor?
For your customers, your company is just one of the names in a highly competitive list of choices they have. Effective funnels can help you offer experiences that apply to what your customers are looking for from your site.
Why should you optimize your Funnel?
Optimizing your Funnel will require you to position yourself as a brand that stands out from your competitors, and you want the customers to choose your products or services over your competitors. Your main job is to draw your customers’ attention to the value of your offering. Don’t concentrate on pushing your customers to buy your offering; that should happen organically through your Funnel.
It may seem like hard work and a lengthy process, but your competitors are doing it, and it is the only way to persist in today’s competitive digital world. When you make an effort to build a funnel that resounds with what you stand for and what your customers are pursuing, you will find that it works perfectly.
An optimized funnel keeps your brand on the top of your customers’ minds. Combined with relevant content, you can build trust and ensure your customers don’t need to look at your competitors.
How do you Measure the Effectiveness of Your Funnel?
The most significant measure of success of your Funnel is how frequently you refine it as you understand your customers. As you learn more about your target customers, their behavior, and intent, and your brand grows and diversifies, refining your Funnel becomes critical. This refinement of the Funnel is what will bring success to you.
For KPI, an accepted benchmark is a healthy conversion rate. Tracking these metrics can help you determine what might not be working for your brand and tweak future engagements to fit completely. E.g., How many people created an account by clicking on your Facebook or Google ad?
Another practical way to measure the success of your Funnel is to customize customer engagement at each stage of the Funnel:
By paying attention to each step of the funnel, you will be surprised to see how the Funnel can be refined to get maximum conversion. You are maintaining your Funnel optimized and ready to engage in a continuous process. You must constantly monitor and adjust your Funnel.
Are there any limitations to Optimizing the Funnel?
Not really. You can create and build multiple funnels to engage your customers at various touchpoints of their journey and engage them for specific conditions. You can optimize your Funnel to any number of scenarios.
In addition to the scenarios mentioned above, customers may leave your website as the product they are searching for may be out of inventory. You can re-engage with these customers once the product is back on your list. For price-sensitive customers, you can send them emails with discount offers to nudge them into buying your product and increase the conversion rate of your Funnel.
How Can your employees help in optimizing your Funnel?
When we look at the Funnel, we often visualize a unidirectional flow, where new customers sign up and eventually make a purchase. But funnel optimization can be applied in different scenarios, not necessarily limited to converting a potential customer into actual customers.
Optimizing the Funnel has multiple advantages for the company, from improving Average Order Value (AOV) to optimizing the Customer Lifetime Value, Average Revenue Per User (ARPU), and reducing customer churn.
Let’s explore a few use-case scenarios where you can optimize your Funnel and deliver an improved customer experience while achieving optimum results.

Category Funnel

E-commerce companies often find that users show more than a general interest in a product. They do so by browsing various categories of the product. However, this doesn’t always end in conversion, as they leave the page without making a purchase.
Marketers can take clues from such customer behavior. The fact that they are browsing the product across product categories means this user segment is more likely to purchase than others. So you should pay close attention to this customer segment.
Here is the way your employees can Help


sales funnel category
funnel category

For the more likely-to-purchase customer category, your employees can help engage with them and nudge them into making a buying decision. Using email campaigns, businesses can send the right email messages, enabling them to convert. They can also be addressed on a one-on-one basis with Messenger tools that can be used to deliver high-value, relevant and time-sensitive information to customers on their mobile apps.

Onboarding your Funnel

Storage space is not a constraint on smartphones today. Often, customers download applications on their mobile and then forget about them. Say you are an online retail business. It’s a crowded market, and users often download several online retail apps but end up not using them. How do companies motivate these customers to start using their apps? One approach is to send an email reminding the customer to use the App to order products to get discounts. Another method is periodically sending notifications (without overwhelming) to the customer’s mobile about the deal on your products.

New User Registration Funnel

A challenge for many marketers is turning new visitors who arrive at your landing page into leads you can nurture and convert into paying customers. But this is not an easy process; not everyone who lands on your website is looking to make a purchase or give out their email.
Remember, most of these visitors are in the Funnel’s consideration stage and are doing their research before committing to your product or service. As a marketer, the value-add you provide to visitors at this stage is to identify their intent and offer relevant and personalized content.
Following are some of the techniques you can use to convert a new visitors to register on your website
• Once a visitor lands on your website, you can engage them to register using personalized lead generation content.
• For that visitor who does not register on the first visit, you can help follow up with a personalized offer
• You can further engage visitors who still don’t sign up by providing a discount membership card.
This strategy is based on the website traffic analytic tools to identify the visitor in various steps in your Funnel.

Cart Abandonment Funnel

Another pertinent example where funnel optimization can yield excellent conversion is while dealing with “cart abandonment.” Every year cart abandonment costs businesses multiple billion dollars in lost revenue.
The constant challenge for marketers is reducing car abandonment rates, as this is where many related marketing metrics can also be optimized, like Average Order Value (AOV).
How can you manage cart abandonment?
When customers abandon their cart and exit a website, it is a lost opportunity for your company, a highly undesirable outcome for you. However, you can send targeted emails giving discounts on the items added to the shopping cart to nudge the customers into making the purchase. Also, identify your checkout process for issues, fix them, and simply the entire checkout process.

Returning Visitor Funnel

A visitor checks into your website and leaves without making a purchase. How do businesses engage with the visitor so the visitor purchases the subsequent visit?

How to fix Returning User Funnel

Businesses looking for higher conversions is to understand their target customers based on customer segmentation. You can use third-party tools to create visitor segmentation based on visitor behavioral patterns, response to marketing emails, purchasing trends, geolocation, historical data, etc. Once you have the visitor segmentation in place, identify which segment the returning customer falls under and perform a targeted marketing campaign pertinent to the visitor segmentation.