The Death of the Purchasing Funnel, and its Relevance to Social Media (Part 1)
Before I explain why I think the funnel model of marketing is dead, or at least in need of serious revamping, I should start by explaining what exactly it is. So, what is the marketing funnel?
Well, think of the last time you purchased a product or service, and think of the various stages you went through before you handed over the dosh.
If marketers and business analysts are to be believed, the earliest stage was awareness, where a TV spot or a jingle on the radio triggered that initial interest. The next is consideration, your curious browsing of the product, then comes evaluate, where you weigh up pros and cons of various companies offering the product or service, and then purchase.
The more sophisticated models also include post-purchase, where you become a recommending, positive reviewing, brand ambassador for the company, or a lucrative repeat customer, or, if goes sour, a dissatisfied punter who defects to a competitor.
Analysts have used the metaphor of a funnel to illustrate the different stages of this journey: like a funnel, it’s linear and progressive, commencing at awareness, and culminating in purchase and repeat purchase.
Also like a funnel, it’s tapering: in other words, while at the beginning you are considering a myriad of different brands and companies, as you progress through the funnel this list is gradually eroded away.
You lose some after consideration, you lose some more after evaluation, and by the time you make a purchase there is only one remaining! The figure below is a very simple purchasing funnel, but it does the trick!
Ok, so that is what it is, now why is it dead? Well, I was exaggerating – slightly! It isn’t dead exactly, it just has to be revamped considerably to fit the new digital marketing world.
New digital technologies - smartphones, the intent and social networking sites especially - are radically changing the way customers interact with companies, and the purchasing funnel model has to be adjusted accordingly. Really, in what ways?
We now know, largely thanks to research by the McKenzie group, that the model of the neat tapering funnel, where customers discard brands as he/she moves through the successive stages of the journey, is out-dated.
In the earlier stages, rather than brands being reduced between the consideration and the later stages, they can actually increase. The customer can become aware of more possible brands, and factor them into the decision process, right in the middle of the customer journey.
More startlingly, research shows that brands that were previously rejected can be reconsidered, and customers can reject brands that had made it through the initial stages: the result of this is a customer journey where brands and companies are in constant flux, caused largely by the highly interactive world of digital marketing and media. These new trends do vary from industry to industry, but in the motor industry, for instance surveys suggest a remarkable 3.3 new brands are introduced in the evaluative stage.
The purchasing funnel model was designed for a world of traditional advertising media, a world of television and radio, where the customer was the passive recipient of expertly crafted advertising. Just as in the case of the Jesuits, who are infamous for saying “give me a child at seven and I will have them for life”, the best advertising and branding you were exposed to early on usually stayed with you, up to the point of purchase and for repeat purchase after that.
Ok, so that is why the funnel is outdated, but what the heck am I supposed to do about it?? Next post sonny!