If you work in or even close to marketing, then you’ll have no doubt heard about the funnel.
If you haven’t or are looking for a quick refresher, then check out this great Beginner’s Guide to Marketing Funnels by ahrefs.
According to the guide, a marketing funnel is:
‘a system designed to attract and convert customers (or clients) to your business’.
That ‘system’ usually correlates to some form of customer journey. If you think of the old AIDA model, it might look something like this:
Awareness — PR and advertising tactics to make people aware of your product or service.
Interest — online marketing tactics to get people really interested in your product or service.
Desire — nudge and brand marketing activities that make people want your product or service.
Action — conversion tactics that get people to actually purchase your product or service.
So why the funnel?
Well, if you visually translate the above AIDA model into a funnel shape, you’ll see that you probably have a heap more people at the top than at the bottom. Some have even referred to the funnel as the ‘leaky bucket’ because you’re losing customers along the way like you would water from a leaky bucket!
Where the funnel really came into its own though has been in recent years with the advent of ‘customer journey marketing’ and ‘marketing automation’. Two things that have reinforced that funnel concept to such an extent that many marketing teams and companies now base their whole planning process around the ‘funnel’.
And let’s be honest, it’s a really useful concept.
Not only is it visual enough to help internal teams get a grasp of how the process works. But it has provided just a little bit of humour to the dreary world of KPI with terms such as ‘TOFU’, ‘MOFU’ and ‘BOFU’ (top of/middle of/bottom of funnel).
Where it’s perhaps most useful however, is when it is correlated with numbers and conversion rates, therefore serving as a really useful budgeting and planning tool.
Now forgive the badly hand-drawn approach here, but below is a quick example of how you can make a funnel work as a budgeting and planning tool:
Now obviously all of this will depend on your organisation’s set-up and the words and numbers need to be customised. But you can see that by starting with your target or end goal number (the 5 at the bottom), you can reverse the calculations back up the funnel to see roughly what sort of numbers you need to be hitting at the top of your funnel.
And then translate this into the budget required for your tactic(s) of choice.
So what’s the flywheel?
The flywheel is actually not a new concept. It was first introduced by Jim Collins in the early 2000’s in his book ‘Good to Great’. And was picked up from there by the likes of Jeff Bezos who used it to craft the Amazon model of ‘continuous improvement of customer experience’.
More recently, it’s made a comeback, specifically in marketing and specifically by the platform vendor HubSpot.
In fact, HubSpot have gone so far as to say that the flywheel effectively replaces the funnel, mainly because those who use the funnel aren’t putting the customer at the heart of what they do.
At the core of the flywheel is, therefore, the customer. And everything that ‘spins’ off the flywheel should be done with the customer in mind — whether that’s customer experience, content creation, the sales process, website updates… you get the gist.
What’s great about the flywheel is that it’s dynamic — it represents that customer journey much better than the funnel does. Because, let’s face it, who actually follows a linear journey when they’re considering what TV to buy or even what type of accounting software to procure.
It’s also a more comprehensive way of viewing the customer experience, and involves multiple departments in contributing towards it, rather than just marketing, or just sales — you know, the silos that exist in so many companies!
So is the funnel dead?
So if the flywheel is so great, does that mean the funnel is dead?
Well, I’ll stick my neck out on this one and say NO!
Because whilst the flywheel is a great way to capturing the messiness of the customer journey and the fact that everyone needs to pull together in order to create that optimal customer experience, it’s not actually that practical to use or put into action. How exactly do you translate some constantly-moving circular graphic into an actionable plan that a marketing department can control?
BRING BACK THE FUNNEL!
And that’s where the funnel comes back into play. Yes, it’s an oversimplification (although so too technically is the flywheel!) and yes, it gets overused in some instances where teams are held accountable for numbers that are essentially ‘back of fag packet’ calculations.
But it’s a great way to work out roughly what numbers you need to be feeding in at the top and how much budget that roughly equates to in terms of the marketing activity you’re doing.
Note the key word here is roughly.
In other words, it’s just a guide —like so many models or systems, it cannot represent reality 100% and should only serve as a visual aid to simplify chaos and contribute to planning.
I’ll just close off with a statement I love from Drift:
“At some point, being data-driven started being more important than being customer-driven. As a result, the buying experience most companies provide has become cold and impersonal. Not only is it a terrible experience for potential customers, it’s also bad for business.”
If you remember this, and treat the funnel as the model it’s designed to be, then you can’t go wrong.
Long Live the Funnel! And maybe the Flywheel can come along to the party too!
💜 Happy Planning!
From Emma at immerj
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