At its core, the marketing funnel is a way to visualize the path a potential customer takes from initial awareness of your product to becoming a paying customer.
Think of the marketing funnel as an internal roadmap, providing a framework for building effective and efficient marketing and sales strategies.
Understanding the basic structure, categories, and key terms used to describe the stages of the marketing funnel can help you plan your overall strategy. Each stage of the funnel consists of unique challenges and opportunities. There are several different simplifications and terminologies used to describe various stages that prospects go through on their way to becoming a customer. We will cover many of these terms here. Keep in mind that different organizations use different terminology to describe their customers’ buying experiences, depending on the need and complexity of their product, service, buying cycle, or specific program.
The key to using these terms is to create a single lexicon for your organization – from executive leadership to marketing to sales – so everyone is speaking the same language and working with the same definitions.
Having a well-defined funnel with associated S.M.A.R.T. goals becomes important for addressing leaky funnel syndrome, where potential customers slip away between stages. Not every lead or person who gets captured in the awareness stage is going to become a customer (this why the funnel shape — wide at the top and narrow at the bottom — is commonly used). There are many reasons for this. Some leads simply are not the right target audience or the right fit for your product or service. Others get busy with other projects, distracted by the day-to-day responsibilities of their job, or lose interest. Understanding where and why people fall out of the funnel will help your teams adjust and optimize their strategies.