Video Transcript: Marketing Funnels

Tom Tubergen, I'm back here again with another module in the introduction  portion of the marketing course. And this particular module, we're going to talk  about marketing funnels, and we're going to refer to a PDF document that you  have in your course outline called how a marketing funnel works. Marketing  funnels are actually very similar to the customer value optimization journey,  which is more of a psychological examination of the journey that a customer  takes during the buying portion process, or in the psychological buy in process  of associating yourself with a product, with a service or with some sort of  organization. Marketing funnels are actually very similar to that, but they're more concentrated on the logistical step one, step two, step three, part of how you  attract people, get leads, what you're going to do with them next, where they  are, step by step, they don't deal at all with the psychological aspect necessarily  of converting a lead into a customer, and also marketing funnels are actually is a thought process that's been around for a long time. Marketing funnels have the  concept of a marketing funnel has existed for decades, whereas this whole  thought process behind the customer optimization journey is actually been much more recent, as new research has been has been created on that. But anyway,  we're going to work our way through the the PDF document that we have here  how a marketing funnel works. In my thought is, we kind of read through it  together, and I would take the opportunity to explain some of the concepts and  some of the higher points here that you need to be aware of. You know, there's a lot of debate that surrounds marketing funnels from who owns it, whether it's  marketing department or the sales department, and whether it's even relevant to today's consumer buying process, and I think there is a definite shift away from  the marketing funnel and more towards the optimization journey. But that's a  whole different can of worms than what we're interested in here today. What  we're going to talk about here is what you need to know about marketing  funnels, and we're going to look at some of the recent changes and some of the  challenges for marketing people. And I'll compare B to C and B to B uses of a  marketing funnel as well, and talk about some of the hype around marketing  versus sales ownership debate. Now, in case you're not familiar, we mentioned  a couple of terms here, a couple of acronyms called B to C and B to B. B to C is  really a business that is selling consumer oriented goods, like groceries, for  example. Is a B to C type business. The other term that we talked about was B  to B, and that's a business who creates products, does services for other  businesses. And you might think of somebody who makes metal stampings, for  example, that they sell to the automotive companies to build cars that would be  a B to B type business. More recently, in 2017 I'm starting to hear a lot of things  about H to H type businesses, and that refers to human to human interaction,  simply because technology has changed so dramatically over the last several  years that we're now just dealing with humans who have specific needs, specific things that they need to solve, as opposed to a business organization, it's driven

even deeper down into the human level. So we're going to compare the B to C,  B to B uses of the funnel. We're going to break down some of the hype around  the marketing versus the sales ownership debate, and we're going to explain  how the marketing funnel can be flipped or worked or manipulated to generate  more leads, more sales leads, and we'll explore some of the non linear  approaches to a marketing funnel. But let's start by creating a basic framework.  What is a funnel? What does it involve? What are the components of it? We'll  start with the next section. What is the marketing funnel? The marketing funnel  is a visualization for understanding the process of turning leads into customers,  or turning people from being aware into your best advocates or your best  promoters and that's as in the context of a marketing and or a sales perspective, the idea is that, like a funnel, marketers can throw out kind of a broad net to  capture as many leads as possible and then slowly nurture prospective  customers through that value optimization journey, narrowing down these  candidates in each stage of that funnel, there's specific stages in the funnel, just  like there's specific steps in that customer value optimization journey that we  were talking about earlier, in other modules. So ideally, the marketing funnel  would actually be a marketing cylinder, and all of your leads are going to turn  into customers. 100% of your leads would turn into into clients or customers for  your business. And this actually is obviously, as we said before, in other  modules. It's not a reality for businesses. It's part of a marketer's job to turn as  many leads into customers as possible, and making the funnel more cylindrical  in nature, instead of a funnel shape. It's important to note that there's not a  single agreed upon version of the funnel. Some of them have many stages,  while others may have two or three, and they might have different names and  actions taken by the business and the consumer for each and you'll see the  diagram that's on the next page. We've done what we could to kind of pull up a  comment in the more relevant funnel stages, terms and actions, so that the  information is as useful as possible to the different marketing people. So let's  talk a little bit in the next section here about the marketing funnel stages and the conversions from one stage to the next stage. You'll see in the diagram that very like, very similar to the customer value optimization process that we talked about in a couple other modules in this section that there's different steps. There's an  awareness phase, there's a phase, the next phase down the funnel is people  are expressing an interest in you and what you're doing, what you have. Then  they actively begin considering, well, is this right for me, or is this right for my  business, or isn't it? And then they drop down into the even lower in the process, in the marketing funnel, is there an intent to purchase? They start going, they've  made the decision that, yes, this sounds good. Now, what's involved in me,  actively getting engaged with this product, with this service, or with your ministry, and then they go through the evaluation phase. How do I fit in? How do I use  this? What's in this for me? So on. And then they actually make the commitment,

the purchase commitment, they buy your product, they buy your service, or they  actively get involved in a ministry or a church type application. So the next  several paragraphs on here talk about this in more detail, the awareness, the  interest, consideration. We'll probably skip through that for now. How does  marketing funnel differ for different types of businesses? And again, they're  referring here to the B to C and the B to B type scenarios. And to better help you understand how that marketing funnel differs, let's take a look at the modified  diagram that's right immediately below this on I think it's page three of your  handout, which outlines B to C and B to B, consumer actions and conversions in each stage of the funnel. So the top one here we see is generally the same. It's  an awareness phase. It looks for information. The interest phase you're talking  about, learning about products. For the consumer side of things. On the  business side, they might be looking at engineering information. They might be  looking at specific products to solve a problem that they have with a project that  they may be working on. And then the consideration phase, think about how you buy products online. If you buy products online? Are you reading reviews? Are  you comparing one product against other products that you're finding on your  searches, in Amazon or in Google? Whereas buyers at a business are going to  share research on products, they're going to associate brands such as an IBM  product or another well known name, with other stakeholders in the process.  Further down the intent for a consumer, they would actually demonstrate that by  putting the product in a cart, in a shopping cart online, for example. In the  business world, they would probably contact someone and say, We need to see  a demo. We need to have a tangible product in our hands. Can you come by?  Can you talk about what you have and how this might work for us? In the  evaluation phase, a consumer is going to look at the shopping cart. They're  going to review what they have. They'll look at the shipping costs. They're going  to look at the quantity to make sure that the quantity is right. They're getting one  and not two. And then they'll go to the checkout process, whereas in the  business world, they may get a actual physical quote on paper or email, and the  buyer at the business will review that make sure it looks good. He'll probably  issue a purchase order, which will get mailed or emailed back to the person  supplying that product or the service. And then the purchase process at the very bottom of the marketing funnel, they talk about the sales transaction that needs  to get completed, or the process the checkout process actually is completed.  And the same would be true for the business aspect of this. So let's talk a little  bit so that actually talks about the whole marketing funnel concept. And this is,  like I said at the very beginning, this is actually fairly old, old school marketing  process here, and it's still true. The only difference is the customer value journey that we talked about in these other two modules in this section, is that there's  less detail here and it's more concerned with process than it is with the  psychological impacts of getting a consumer to buy, all right, nonlinear funnels. 

They talk in the document here about nonlinear funnels, some experts argue  that marketing funnels aren't relevant anymore because a buying process is no  longer linear. Leads are coming into the funnel at different stages. In other  words, they may not always start out at the awareness phase. Maybe they've  been aware of your product or your service or your ministry for many years, and  they might jump in at a different level, on the marketing funnel or even on the  optimization journey thing. Sometimes this happens because they're referred or  they may have just moved into an area. They're new movers, and they already  know that they want to buy a brand's product, so they jump in at the intent stage. And it also happens because they pursued their own education, they jump in at  the interest or the consideration level of a marketing funnel. As access to  information has increased due to the technological advances and capabilities,  specifically with the internet, customers are increasingly doing their own  research and depending on digital content to give them the information that they need about products and services. In fact, B to B customers specifically, are  going through about 57% of the marketing funnel process on their own, before  they even encounter a sales rep or they have a conversation with the seller of  the product or the service. One alternative the marketing funnel is McKinsey. It's  a big, very well known, very elite consulting firm. Their consumer decision  journey similar to the valley optimization journey that we talk about, which  employs kind of a circular model to show how the buying process is actually kind of a vicious circle, I guess you could say, and to highlight pivot points or touch  points on the process. Touch points meaning where your product, where your  information, will actually contact or come into contact with a potential prospect.  And you can see the diagram that they have here, the orange and the blue  diagram down below. Here, they go on here in the document, in the PDF  document, say that some experts doubt the approach. Brands may put the  decision in the center of the journey, but customers don't always do that. There  still isn't really a perfect model, except for the fact that I really personally  subscribe to the customer value optimization journey process, so both the  customer decision journey and the marketing funnel simultaneously will be used  by marketers, and therefore they're both actually still very relevant processes in  a in a typical profit making larger business where you have discrete departments of people in marketing and other people who work explicitly in sales. There's a  lot of tension between the two areas, and they talk about marketing versus  sales. Who owns this funnel? Who owns this process of nurturing people,  nurturing sales prospects, through the process from making the initial contact,  becoming an actual lead, to becoming your best customer. There's a real heated debate that's happening, continues to happen. I really should say, in the  marketing sales world over, exactly who's in charge of that whole process. One  side is going to argue that as consumers have become a lot more dependent on digital content to inform their purchasing decisions, marketers have taken on a 

lot more responsibility for the funnel. They continue to nurture prospects through the purchasing process. Take a look at the diagram below to see how marketing  and sales ownership of the funnels changed, and you can see the old paradigm  on the left, where they talk about the sales and marketing. Marketing is  

responsible for creating awareness and interest, where sales follows up and  contacts people who have expressed the interest to actually bring them to the  very end of the process and convert them into clients. In the new paradigm,  marketing is responsible for so much more they go through the they will take it  right through the consideration portion of the funnel process, the intent portion of the funnel process, and that's where sales could really pick up and move on with this. All right, flipping the funnel marketing the customer experience they show.  The practice for marketing sales, customer service and experience managers is  really to flip the funnel into a customer experience funnel. This is kind of a new  thing that is kind of an interesting take in this the funnel outlines the process of  turning customers into advocates, which in turn reveals the top of the marketing  funnel by driving awareness, driving lead generation, creating more sales lead  and the diagram for that customer experience funnel is down below that. You  see here some of the more important stages of the customer experience funnel  are to repeat, which means the customer has already made a purchase. The  next step is to make them a repeat customer. It means improving the retention  nurturing customers, to make more purchases bigger purchases. Marketers  continue activities. At the bottom of the funnel, I should say, to encourage these  repeat actions by the customer. And I might say that in the again, in the  marketing world and the secular world of promoting products, promoting  services, working with and nurturing existing customers is easily the least path  of resistance for generating more activity, more revenue, more sales. And so the final step on this particular customer experience funnel is the advocacy phase,  and this is where you turn your customers into advocates. And it's really kind of  the end game for marketing people. So these are a couple of different examples  of marketing funnels. The whole theory behind marketing funnels and how  marketing people use them and apply them to the profession of generating more leads, generating more interest for whatever it is they're working with, and  converting them into physically paying customers or into advocates for your  ministry or your Business or whatever you're doing. See you next time,