Back to Basics: What is the Customer Funnel?
Your relationship with prospective customers matters; from the first interaction with your company to the moment of purchase, and all the way through the sales experience, it’s crucial customers have a positive experience with your brand.
It's also crucial you are aware of the natural progression customers take when making a buying decision. Even though each customer is unique and your products / services may be customized, when dealing with your business most customers will flow through what is known as the customer (or sales) funnel.
What is the Customer Funnel?
The customer funnel is a visual representation of the flow, relative group size, and stages of the buying cycle most customers progress through as they move from initial awareness of your business to spending hard earned money on your products or services.
The funnel encapsulates the entirety of the relationship you build with your customer, and can be broken down into stages to help you identify opportunities to optimize your marketing strategy.
Common Stages of the Customer Funnel
The customer funnel is often broken down into four stages – awareness, consideration, purchase, and loyalty - and depicts the reduction in group size as customers flow through each stage.
If your company is fortunate enough to boast a high conversion rate, your funnel may end up looking more like a square, as the number of purchases at the bottom matches up with the number of prospects loaded into the top.
Outlined below are the four common stages of the funnel along with insight on why each stage is important for your business:
The Awareness Stage
"Awareness" is the first stage at the top of the funnel, and includes the touch point(s) where prospective customers first become acquainted with your corporate brand. Because this is the first interaction with your business, it's a powerful stage for you to attract the right prospects and introduce them to your product or service.
The Consideration Stage
After prospective customers have become aware of your brand, they enter the "consideration" stage where they consider whether your product or service will satisfy their needs. This stage can occur quickly in the length of time it takes to "add to cart", or can take several months / years depending on the amount of due diligence required before making a buying decision.
While prospective clients develop their own process to weigh the impact of their purchase, brands have the ability to influence the decision in their favor by establishing a strong, authentic relationship.
The Purchase Stage
Once prospects have considered the suitability of your product / service for their requirements, those still in the funnel enter the next "purchase" stage where they are converted to customers. By this stage, a foundation of trust and value has been established with your company, a must-have when it comes to any financial transaction.
The Loyalty Stage
The "loyalty" stage describes everything that occurs post-purchase, including order fulfillment, warranty claims, returns & refunds, handling customer complaints, nurturing customers & community building, and continuous monitoring of customer satisfaction. Because generating a new customer can cost five times more than retaining an existing customer, it's imperative you don't neglect this stage of your sales process so customers don't feel abandoned as soon as the cheque clears.
How to Optimize Each Stage of the Funnel
So now that you've gained a bit more knowledge about the different stages of the customer funnel, what do you do with it? By refamiliarizing yourself with the steps customers take on their way to buying, you can identify opportunities to improve their experience and positively influence the likelihood of purchase.
Below are ways you can improve your customer experience in different stages of the customer funnel:
How to Increase Awareness
Be sure to clearly define your brand’s personality as people remember brands that stand out and tend to prioritize those that resonate with them. This can range from using consistent graphic elements, logos, taglines, and clearly identifiable corporate voice. But remember, whatever your brand’s personality is - make sure it is unique and authentic.
How to Influence Consideration
The consideration stage is the time to fully engage prospects with your offering and prove how it will add value or solve a problem in their lives. To do this, you can write a descriptive blog post, use interactive video demonstrations, share customer success stories, and just generally boast about the benefits of your brand!
How to Solidify the Purchase (Conversion)
While prospects are still considering your product or service, there's a chance they could "abandon their cart" before they convert to purchase. It's important you remove doubt blockers and ensure a user-friendly purchasing experience as they transition from consideration to the purchase stage. To help them convert, you can provide answers to frequently asked questions (FAQs), embed compelling calls to action on your social channels and website, offer point-of-sale discounts and free shipping, and put their minds at ease with readily accessible refund or return policy information.
How to Encourage Loyalty
To encourage customers to continue buying from your company, it's important that you make them feel like they matter after you've already received their money. People don't like to be treated like walking dollar signs, so don't just make them feel special during the consideration stage; take the time to properly deliver your product or service, ensure the customer is satisfied, and encourage post-sale engagement through regular communications.
Why the Customer Funnel Is Important
Now that we’ve reviewed the customer funnel and all its stages, consider its importance to you and your business.
The customer funnel allows you to gauge your audience's response to your brand throughout the entire sales cycle and helps you optimize your strategy to encourage more conversions.
And an optimized sales cycle that increases conversions is just money in the bank!
If you need help with evaluating and optimizing your customer funnel, send us a note - we'd be happy to lend a hand!