Marketing funnels explained: Why they are important and how to build yours


Marketing funnels are plans that companies use to map the path of how a potential customer becomes a customer.

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To learn how to create a more profitable marketing channel, we sat down to Amanda Tallon, Account Strategy at growth marketing agency Shoeslace. Let’s get started.

What is a marketing channel?

The marketing funnel visually depicts the person’s journey from the first interaction they have with your brand, such as reading a blog post, to the moment they make a purchase. Different stages in a marketing funnel correspond to different points along that journey.

The largest part of your funnel captures people who may be interested in your product. These people will move through the funnel as you communicate with them via direct communication or marketing activities until they drop off or purchase your product.

An easier funnel could include awareness, consideration, evaluation, and purchase. A segmented funnel could include awareness, consideration, intent and evaluation. Some add an inverse funnel to map loyalty and advocacy. You can segment your marketing funnel in any way you like. Use three sections, or break it into 10 segments.


We’ll focus on three phases for simplicity: acquire, consider and convert as well as post-purchase loyalty. This will include your top, middle and bottom funnels (ToFu), MoFu (MoFu) and BoFu (BoFu).

Did you know? E. E. Elmo Lewis was the first to develop the idea of a marketing funnel. His model, now known as AIDA (Attention, Interest, Desire, Action, and Satisfaction), was pioneered by St. Elmo Lewis.

Marketing funnels are essential for ecommerce businesses

Funnels promote more meaningful growth. You might discover that TikTok videos are great for increasing awareness about your company, but little is done to convert customers. This will allow for strategic growth. You’ll be able to focus on the things that work and cut back on the ones that don’t.

Build better customer relationships. To whom are you marketing? What are they interested in? What type of marketing appeals to them? A funnel is a way to better understand your target audience. It will help you determine what makes them excited about buying from you.

Manage your inventory. Your average order values will determine how long it takes to sell your inventory. Selling heirloom-quality diamond necklaces at $15,000 per piece will take longer than selling costume jewelry that sells for $39. How many weeks does it take to sell the more expensive and less-expensive items? The marketing funnel will give you an idea of where and when to spend your money to make those products sell in the expected timeframe.

Read more: How to Build a Profitable Sales Funnel

The stages of a marketing funnel are similar to the stages water goes through to make a cup of pour-over coffee. Najib Kalil via Unsplash

Marketing funnel: How the business stage affects your marketing

Your marketing funnel will change and grow over time depending on cultural trends, products sold, and stage of your business. It is an evolving model. It’s not a house you could build and leave it alone. A structure needs to be maintained and cared for in order to thrive.

The two most important factors that distinguish a business’ marketing funnel from one that is just starting are brand awareness and revenue.

How easy it is for new customers to find you business depends on how brand-aware you are. You’ll spend less on awareness and acquisition and more money on consideration and conversion. You’ll need to generate hype and spread word about your products earlier, so your resources and time will be spent on getting new eyes.

How much money you make determines how much money you can spend on marketing activities. You have to spend more on paid acquisition and purchasing new inventory. Your marketing strategies will be different if you are just starting out or have limited funds. You can think: More email marketing, organic blog postings, and social media.

Dig deeper: 17 Creative Marketing Ideas for Small Businesses

How to create a marketing funnel

We’ll work together to create the best marketing funnel for your company. We will discuss the strategies for acquisition and awareness, consideration and conversion, as well as the inverse of the funnel, loyalty.

Marketing funnels outline a straightforward path to conversion. In reality, most customer journeys aren’t as linear. Unsplash

Learn about your target audience

Amanda suggests that understanding who your customer is and what their target audience are is the first step. Amanda recommends analyzing your customer persona if you don’t have a target audience.

An analysis such as this can be done via Google Analytics, or by using a third-party platform that collects quantitative data. To better identify your customers, you’ll need to search for data points such as geography and demographics.

You will gain a deeper understanding of your target audience by collecting qualitative data. This information can be gathered by having one-on-1 conversations with people who have purchased your product.

Next, you will begin to draw inferences from the data. The channels and marketing style you choose will be influenced by what you discover. If you are selling primarily to teenage girls aged 15-20, you won’t need to use LinkedIn ads.

This exploration should help you to understand your audience’s buying habits and which platforms they use most frequently.

Here are some activities that you can use to find your target audience.

  • Take a look at the cumulative purchase history of all customers.
  • Digital analytics tools can be used to collect quantitative information.
  • Use SurveyMonkey to conduct an online survey.
  • Interview past customers one-on-one.
  • Conduct industry research to discover consumer behavior and trends.
  • Analyze the audiences of your competitors to complete a competitive analysis.

This information can be used to create buyer personas, which will detail the characteristics of the most frequent customers of your shop.

Read more: How to Find Your Ideal Customer: How To Define and Reach Your Target Audience

Determine the average order value and the consideration timeline

Your average order value (AOV), is the average purchase value of your customers. If your shop has a revenue of $2,000 and you have 100 orders, your average order value (AOV) is $20.

The AOV is a measure of how much attention you place on each stage of your marketing funnel. If fine jewelry is your AOV, then the consideration stage of your funnel will be longer than a shop with an AOV of $20. A customer will likely think twice before making a large purchase.

This is how we can see the relationship between this and the marketing funnel:

  • High AOV = Long consideration time. Spend more time and money creating content that nurtures people during the consideration phase.
  • Short consideration time = Low AOV. Your marketing efforts will be focused on new customers.

Amanda points out that the model allows you to differentiate between where your budget is placed and what emphasis you place on different parts of your funnel.

Explore What’s the Average Order Value?

Phase 1: Acquisition & Awareness

The funnel’s broadest section represents everyone who hears about your business and product. You might do this through your marketing efforts, a recommendation by a friend, a Google roundup article, or a post on social media. These people are likely to be aware of your business and may need one or more of your products.

Your target audience and your AOV will determine the strategy you use for each stage in your funnel. There are some activities that make sense for awareness and acquisition. You can also run paid ads. However, organic content creation and collaboration with influencers at this stage of the funnel will help you achieve long-term success.

Not only does it help you increase traffic to your website , but it also nurtures customers who are interested in learning more about your products or your industry.

Similar benefits can be achieved by a presence on social media. It gives prospects the opportunity to learn more about you and your brand, as well as get a feel for your voice and personality. They can also engage with you by asking questions or posting comments, sharing content with their friends, and engaging with you through social media.

Sometimes traffic is not what you want. Sometimes traffic is successful but not conversions. To grow and profitably grow, you must combine both.

Invite someone to join your email mailing list to learn more about your products and engage with them. Some businesses offer discounts to encourage people to sign up, while others promise valuable content. No matter what you do, offering the option to subscribe allows you to keep in touch with people even if they haven’t yet made a purchase.

If you want to increase your reach, consider partnering with micro-influencers.

Amanda said that she recommends to brands to “work with micro-influencers” or to use existing audiences. It’s becoming very costly to acquire new audiences via paid search and social media.

Micro-influencers are those who have 10,000 to 50,000 social media followers. Amanda states that if your brand aligns with micro-influencers, there are chances their followers will also be like yours.

Learn More: The Beginner’s Guide To Influencer Marketing

Be careful when choosing your acquisition strategies

Although we are talking about awareness and acquisition, the methods that you use to drive traffic to your site must target prospects who will convert. A podcast might be a great way to drive traffic to your site. The listeners may not be in your target audience and, while they might be curious about your product they don’t convert.

Peepers is a brand that sells fashionable eyeglasses. It ran into the same problem. Like many other ecommerce shops, the business is trying to diversify its methods of finding customers and driving traffic to its store. They tried out non-traditional routes and, despite having great ads and compelling content, they did not drive conversions.

John Hart, Peepers’ VP Operations & Ecommerce, said, “Sometimes it is not possible to get traffic.” Sometimes traffic is successful, but not conversions. To grow and profitably grow, you must combine both.

Peepers creates trendy eyeglasses. Peepers

Phase 2: Consideration

The awareness phase was all about building and maintaining relationships with people. Prospects reach the consideration stage when they have identified a need for your product. It could be used to solve a problem or spark joy. This stage is when someone becomes aware of your business and what you do. You might have them on your email list, or they may be following you on social media.

Amanda mentions email Marketing as one of the most effective tactics for prospects at the consideration stage in her marketing funnel. What’s the benefit? Because they are on your email list, these individuals already have an interest in your brand.

Amanda says that email marketing can help you tell a compelling personal story. “You can do a lot of brand building within someone’s inbox.”

Continue reading: 20 Best Email Marketing Practices to Turn Campaigns into Sales



Do not forget about consideration in the cold

It is easy to forget about consideration. Instead, focus on the bookends: awareness and conversion. Amanda cautions that while some customers will convert immediately after they are acquired, others may need to be enticed to make a purchase.

Phase 3: Convert

Now is the moment you’re ready to go. You have created great social media content and sent out emails on time. Maybe even collaborated with an influencer. It’s now time to highlight your business ethos, product benefits and unique value propositions to convince the prospect to buy.

To get the highest revenue from your ad spend, you should run ads at the purchase stage if you don’t have much money.

Amanda Tallon, Account Strategist for Shoelace

At this stage, there are two strategies that work particularly well:

Customer conversations. Customers will only reach out to you if they are actively looking to purchase. You will help them overcome any obstacles. You might have questions about product clarifications. (Can you show me the earrings? Shipping concerns (Will Canada be shipped from England?) ), custom requests (Can I make this in blue?) Talking directly with customers builds trust and gives them a feeling of who you and how you work with them. It can also help to ease any concerns they may have.


Conversion Optimization for Beginners: Free Reading List


Paid ads. Amanda says that paid ads can be run at any stage in your marketing funnel. Amanda says that paid ads can be run at any stage of your marketing funnel. However, if you don’t have the budget, you should focus on the purchase stage. Prospects already know you and what you do. Your ads serve as reminders. You should include copy that highlights the benefits of your brand and products over all others.

Arturo Rey via Unsplash

The inverted funnel: Inspire loyalty and encourage customers to return

Recommending past customers to come back is one of the best ways to increase your average order values. It can be very costly for businesses to acquire new customers. Amanda says that the best scenario is for customers to return and make additional purchases. This will increase their lifetime value.

The Peepers team focuses on repeat sales at all points in their business plan. This starts with product development. They create products that are unique and stand out from the rest, use high-quality materials and sell them at a competitive price.

John states that the next step, and something John has tried to be more focused on, is delivering the best customer experience.

Learn More: How to Market to Existing Customers

Our technology services : Magento posshopify posbigcommerce poswoocommerce pos

We recommend these marketing activities for the loyalty section.

You can try a direct mail campaign. Peepers sends direct mail to increase traffic to their website. There are so many things to try here. You can send a postcard with a unique code, a fun set of stickers, or a handwritten message. The possibilities are endless.

Ask for user-generated content. Amanda suggests that customers send an email asking for photos of the purchase and reviews. You could offer a discount code for their next purchase after customers have provided the content. This allows you to create new content to promote your funnel. It also brings people back to your website , and prompts to give them a discount code.

Develop a loyalty program. This is a great way to reward repeat customers. Reward customers who make repeat purchases with loyalty programs Girlfriend Collective offers perks based upon a customer’s lifetime value. Customers who spend over time can get benefits such as free shipping, returns, and early access to sales.