The marketing funnel is the idea that consumers progress through several stages on their journey towards making a purchase.
Perhaps the simplest marketing funnel has three steps:
- Awareness – how many people are aware that your brand exists?
- Consideration – how many people consider buying from you, perhaps alongside other competitors?
- Purchase – how many people actually buy your products?
The funnel metaphor suggests that people come into the funnel at the top, and progress through the different stages to the bottom. Along the way, some of them drop out; it’s like the funnel is a bit leaky.
Treating this journey like a funnel allows you to think about the relative numbers at each stage of the funnel. How many people are you putting into the top of the funnel vs. how many are coming out of the bottom? Where the drop-off might be happening?
It also helps you think about where growth might come from. Do you need to invest in the top of the funnel, and build awareness of your product? Or invest at the consideration stage, to make the people who are aware of it more likely to actually buy it?
Common extensions of the funnel add things like “loyalty” and “advocacy” to the bottom of the funnel, or distinguish between “purchase” and “repeat purchase”, but the fundamental mechanism is the same.
It’s become quite fashionable to dunk on the funnel, mainly because it’s a gross simplification of how consumers actually behave. That’s true, but it’s still useful and still commonly used, so it’s an important concept to understand.