Funnel in Marketing: Powerful Complete Guide with Case Study

Funnel is as easy to understand as the funnel you… use to pour liquids. In this post, I’ll lay out the definition of funnel – what is funnel in marketing, different types of funnel, and its practical applications. All digestible and fun to read!

What is funnel in marketing

Funnel in business looks exactly as a…liquid funnel (haha) which is large at top and gradually smaller till the bottom.

Yet, what does funnel mean in marketing? The same questions are: what is a lead funnel, what is a purchase funnel, what is email funnel, etc.

Funnel demonstrates a process, for example, where website visitors go from no buying intent to weak to strong intent, or customers go from trying out the product to buying more to becoming a loyal customer.

So funnel, in other words, can be defined as a process where business prospects going from nowhere to conversion (performing the action you want them to do). Sometimes, it also called “conversion funnel”.

As many business processes have that gradually scaling down nature, funnel is used in lots of business areas.

Different types of funnel

The most common types of funnel include:

  • Sales funnel (sometimes called the purchase funnel)
  • Marketing funnel
  • Email funnel
  • Lead magnet funnel (sometimes referred to as a lead funnel)

The business areas are different but the core of a funnel in business – the gradual scaling down nature – is similar. For example:

Sales funnel

Customers go from entering a trial to becoming a returning customer by the end of the process.

Purchase funnel image to explain what is the purchase funnel

Marketing funnel

Prospects go from being aware of your brand to converting to customer at the end.

Beginners Guide to Create Sales Funnel to Increase Conversion by 300% -  Sanjeev Mishra

The illustrations above are just examples. I mean, there is a sales funnel with 5 steps instead of 3. Also, a marketing funnel could have 7 steps not just 4.

So, how do you know what is the right funnel for your business? It depends. I hate to say that but it’s true.

The upside is you can design it your own! Because all funnels have a core at their heart: demonstrate a scaling down process.

All you need to do is know is your business process and understand the funnel marketing approach. Read on for a real-life funnel example and details of the approach!

Stages in a conversion funnel

Source: Clickminded

Explanation of funnel stages in marketing with example

I’ll give Clickminded’s conversion funnel as an example here. For those who didn’t know, the company provides online courses.

StagesActionsExample
Top of funnelProspects come from various marketing channels / Returning customers come back after dropping off for a while and start a new cycleA prospect happened to know Clickminded SEO via its blog. He keeps reading Clickminded content since then.
Middle of funnelProspects become a lead (sign up for email, book a call, etc.)He then signs up for Clickminded newsletters.
Bottom of funnelProspects make a purchaseAfter following the company newsletters for a while, one day he opens his email and find out he’s been offered a discount for a Clickminded course. The discount is good so he decides to take the opportunity and enroll in the course.
RetentionProspects – now customers – purchase more products/services from the companyHe’s interested in what Clickminded offers so have enrolled in other several courses.
LoyaltyThe casual customers now become loyalHe loves the value Clickminded provides in its courses and introduces the courses to his friends.

Note: Demonstrated above are ideal funnel stages in marketing. In real life, prospects can start with the top of funnel then move straight to the bottom of funnel, or some start off right in the bottom of funnel, some start somewhere then drop off and never come back… (You got the point).

You’ve known what is a funnel, various types of funnel in marketing, and how to design a funnel for your business. So, what is a funnel for?

The funnel marketing approach

Tailor marketing messages

First of all, the funnel marketing approach helps you to identify the various stages your prospects go through, so you can tailor the marketing messages to prospects in different stages.

Source: Hotspot

In the Carestream case study:

Top funnel: A prospect in the top of the funnel is likely to enjoy short and succinct messages such as 30-second video and a social media update.

Middle funnel: Then he moves into the middle stage, he’ll enjoy more detailed content such as a blog post.

Bottom funnel: Gradually he becomes more interested in your business (bottom stage), he now likes longer content as webinars, consultation calls, etc.

Measure efficiency of a business process

Person Pointing Paper Line Graph

Finally, as the funnel marketing approach divides the business process into small stages, you can measure the efficiency of a process’s stage and give insights into:

  • What stage needs improvement?
  • What stage can be removed? And what need to be added?
  • What stage is the key lever of your conversion rate?

Conclusion

In this blog post, I’ve shared about the funnel with these key takeaways:

  • A funnel demonstrates a business process and can be used in many business areas
  • All funnels have a core at their heart: illustrate a scaling down process
  • No need to copycat anyone’s funnel, you can design your own tailored to your business
  • Funnel is used to tailor the marketing efforts to prospects in different stages and to measure the efficiency of a business process and give insights into how you can improve it.

What is the hardest part of creating a funnel when you try to build one yourself? Let me know in the comment!

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