One of the main tools marketers use is called the Purchase Funnel. Developed over 115 years ago, the purchase funnel is a model which illustrates a theoretical customer journey from awareness to action. Brands and agencies around the world use this tool to help them identify where opportunities exist to optimize their marketing investments. Below is a quick description of each of the stages and how investing in them can help your business.
- Awareness – Customers in this stage of the purchase funnel are aware of the existence of a product or service.
- Interest – Actively expressing interest in a product group.
- Consideration – Aspiring to a specific brand or product
- Action – Taking the next step towards purchasing the chosen product
Let’s use an example to further explain the purchase funnel and how businesses can use it. One of my friends, Scott, was looking for a family friendly activity to do while in Fort Myers. He had heard the area had quite a bit to offer and was hoping he could find something outdoors. Scott went on Trip Advisor, saw a long list of options including Tours, Fishing Charters, Airboat Tours, Parasailing, etc. He took a look at the trip advisor profiles for each company and decided to focus in on an Airboat tour through the everglades. He had a few options, but after looking at the reviews decided to select a local company with the highest rank. It was slightly more expensive, but he was comfortable paying a little more if that meant he was going to have a wonderful time with his family.
In this example Scott was in the awareness stage when he recognized all of the activity options he had. Its important for small businesses to be present on the tools that people use to discover businesses they may want to invest in. As Scott reviewed some of the TripAdvisor profiles that interested him he entered into the opinion stage. There he formed opinions about each of the companies. From there he instantly moved into the consideration phase by evaluating the reviews. The positive reviews and high rank convinced him that investing his time and money with Gary’s Gator Tours was going to be the best way to spend his money. In this situation the reviews Gary’s Gator Tours had helped them create competitive separation when it mattered most. When Scott was forming opinions and considering the businesses he was going to contact. When he e-mailed Gary’s Gator Tours, he took the next step and the rest is history. Other tactics to leverage near the bottom of the purchase funnel include SEO and paid search.
Action or conversion is the low hanging fruit. Before moving into earlier stages within the purchase funnel small businesses need to maximize their investment in this segment. The people within this area are raising their hands and are ready to convert, brands who take advantage of this mindset can invest less to drive sales – increasing their marketing return.