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Funnel Marketing: How do potential customers become paying customers?

Best Practices

Funnel marketing may not be a known term for everyone, but behind the wording there hides a sophisticated and clever marketing strategy which every company that sells products and services should consider. The goal of a marketing funnel is a long-lasting customer loyalty to a company.

Let’s start from the beginning
Funnel marketing strategies are based on a funnel principle. In the beginning, there is a funnel where many leads or potential customers are inside. The leads are going through specific stages until a small amount of selected loyal customers come out of the funnel. This is the ideal idea of an efficient marketing funnel, but in everyday business life, it’s quite different from the expectation, because not every lead will automatically become a long-term customer. The guideline is a simplified representation of an extraordinary strategy that unites various goals of a company.

How does funnel marketing work?
Depending on the service and industry, the funnel is separated into several stages. An example, in this case, the five-step model is often used in the B2B and B2C area.

Stage 1 – Awareness: This is the stage where the customer becomes aware of your product. The customer should remember the company and the product or service. It often takes more contact points to create this awareness, for example with advertising, AdWords or Social Media Marketing.

Stage 2 – Interest: Interest can be created through usability, the content or the design of a website. Tools to measure traffic are for example the visitor numbers and the retention period of the visits.

Stage 3 – Evaluation: The customer searches for information about the product. He obtains offers and compares multiple suppliers. Normally, the following applies: The more expensive a product is, the more the customer will look for advice.

Stage 4 – Negotiation: Negotiating about price and conditions. Negotiations are conducted especially in the B2B area as more expensive and risky deals are often concluded.

Stage 5 – Decision: The customer chooses the best supplier. After the purchase, it is important to strengthen the customer’s loyalty by reconnecting with the customer. Strong customer loyalty brings positive word of mouth and is worth ten times more in the long run than conventional leads. With the help of re-targeting, Google AdWords, newsletters and so on, new offers can be submitted to existing customers.

Practical example
A simplified example from the technical area could be as follows: A lead that was generated through social media registers as a user and receives an offer via newsletter to purchase a power bank. In order to increase the existing interest which has already been fostered by other factors such as usability of the homepage and informative content, the buyer receives a new customer discount which is intended to encourage the purchase. Depending on the personal importance of the product, the user gets information about the product and compares it with other products. If price, emotions and the product itself are consistent, the buyer chooses a supplier. In order to not interrupt the flow of purchases, the buyer should be offered additional products at this point, for example with the help of advertisements like „Other customers also bought…”.

More and more companies are discovering funnel marketing for themselves. Leads and the continuous acquisition of new customers are not the only way to reach a company’s goals. A funnel can be used in any process that a customer goes through in order to reach a certain goal – be it purchasing decisions, registrations or donation goals. Right from the beginning, it is important to proceed tactically.

HBI will be pleased to support you with your funnel marketing. For more information please contact HBI at!

– This article was written by Melanie Kehl, Marketing Assistant at HBI

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