Tips & Hints

Marketing funnels explained

Published on 28 September, 2021

Marketing funnels are found all across the intricate world of comms and marketing – and are especially useful when it comes to showing your brand’s analytics. This visual tool, that’s actually shaped like a funnel, helps companies understand their conversion process by locating where potential customers tend to drop out of the buying journey. This vital knowledge helps inform your business’ marketing strategy and nurture leads into actual purchases.

We’ve put together this helpful, in-depth guide to explain exactly what marketing funnels are, how they work, and how you can easily create and use them to your advantage.

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What are marketing funnels?

A marketing funnel (also sometimes called a purchasing funnel) is an effective way of visualising the journey that customers embark on when they interact with your company. The funnel illustrates the path customers typically take, from when they first discover your company through to buying your products or services.

The flow of potential customers through the funnel is commonly broken down into six stages within lead generation, lead nurturing, and sales:

Lead generation

Awareness: Potential customers become aware of your company by, for instance, seeing an advert or hearing about your brand from a friend or relative. Awareness can be built through marketing campaigns, events, trade fairs, and social media activities. This is the widest part of the funnel where a large number of leads may drop into the marketing funnel.

Lead nurturing

Interest: Your prospective customers show interest in your company by researching your brand and products. This stage is about potential buyers learning more about you and what you have to offer. You can nurture customers through to the next stage with targeted content, newsletters, and emails.

Consideration: Potential buyers look for more in-depth knowledge about your products or services. You can nurture leads in this stage with automated marketing campaigns, case studies, eBooks, whitepapers, and free trial offers.

Intent: Your leads are leaning towards purchasing from you based on their research. Leads in the intent stage can be encouraged through both lead nurturing and sales processes.


Evaluation: This stage is a real turning point as consumers evaluate whether your offering truly meets their needs. Trials, demos, and demonstrations can help your prospective clients eventually convert.

Purchase: This is where prospects take action and become customers – either through signing up for a demo, buying your product(s), or requesting your services. This is the narrowest part of the funnel where only a fraction of potential leads from the beginning of the journey will convert but you will not have wasted your marketing efforts.

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These steps demonstrate how leads gradually work their way through the funnel to the conversion stage. The number of prospective customers decreases with each stage, so it’s important that companies keep nurturing leads with a well-thought-out marketing strategy to encourage their progression down the marketing funnel and to ensure they eventually become customers. The funnel shape itself is a great visual representation, as potential buyers can get stuck at various stages of the conversion process, and sometimes need shaking up if they are going to keep travelling downwards.

Post-marketing funnel stages

While marketing funnels are essential to understanding your customers’ journey, it’s important to consider what happens once they have reached the bottom of the funnel. Companies tend to focus their efforts on acquiring new customers and making a sale while nurturing the relationship with consumers that have already converted has historically been overlooked.

However, businesses are now increasingly recognising the importance of customer lifetime value (CLV). Encouraging repeat purchases is typically simpler and cheaper than acquiring new clients – not to mention it can significantly boost a company’s profits. This is why two new stages have been added at the bottom of marketing funnels, with a clear focus on customer retention:


Loyalty: At this stage, your prospects have converted into customers and are susceptible to buying from you again. You can encourage loyalty with existing customer discounts and advantages, as well as schemes such as loyalty cards and memberships.

Advocacy: Your customers become advocates of your brand when they have had a positive experience dealing with your company or using your products. 92% of people trust word-of-mouth advertising over forms of traditional advertising, meaning it’s well worth focusing on getting people to love and talk about your brand! You can encourage advocacy by sending review invitations and encouraging customer testimonials and opinions (for instance on social media).

The two stages mentioned above help prevent customers ‘dropping out’ of the funnel and being disregarded, only to have them drop into the marketing funnel of one of your competitors. In fact, customer retention activities can not only encourage repeat purchases, but they can also increase the size of the pool of customers at the top of the marketing funnel. With user-generated content helping to support your company, this can attract more potential customers who view actual customer reviews as a big draw.

Why are marketing funnels important?

Marketing funnels are designed to help companies turn potential buyers into customers by obtaining a deeper understanding of their purchasing behaviour and journey with your company. The data collected provides valuable insight into the reasons why you may be losing customers along the purchasing journey. This data can then feed into:

Your marketing strategy: understanding where prospects drop off along the customer journey will allow you to tailor your marketing strategy to this pain point. You can use the correct tools and messages to keep your leads engaged and promote their progress along the funnel.

Planning consistency: when you know your customers’ journey and have a plan in place to cover each stage, this creates an element of consistency. It will make the whole marketing process simpler as pre-planning for each stage will prevent erratic marketing activities that can confuse customers and cause them to look elsewhere. A seamless and organised process can also benefit your marketing team as they can put automated marketing processes in place to save time and effort.

Sales generation: without the insights provided by marketing funnels, you are likely to lose potential buyers that do not immediately purchase from you. Nurturing leads along the customer journey is important as you can gradually drive them towards the bottom of the marketing funnel and generate sales that wouldn’t otherwise have happened.

Forecasting: predicting future sales is much easier when you have a deep understanding of your prospects’ patterns and behaviours. Therefore, marketing funnels can help to produce accurate sales forecasts.

Marketing funnels are important in supporting various day-to-day business activities, taking guesswork out of the equation. They are particularly essential when it comes to planning and implementing processes that are not only seamless and consistent but also have greater potential for success.

How to create a marketing funnel

Marketing funnels will vary depending on your company, your offerings, and target markets. You can take a tailored approach to develop a clear image of your company’s very own customer journey. There are various steps you can take to develop a bespoke marketing funnel that truly represents this journey.

1. Learn about your audience

Getting to know your target market creates a strong basis for marketing funnel creation. Find out their interests, their problems, their personalities, and their behaviours. You can gain this information via surveys, web analytics, reviews, and social chatter (for instance on social media platforms). Social chatter can be monitored with social listening software, which allows you to track certain industry topics as well as mentions of your company and competitors. For an even wider view of your target market, you can incorporate your direct competitors’ customers into your research.

Customer traits, personalities, and behaviours can all be used to create customer personas. This allows you to divide your target market into several customer profiles, with different marketing strategies tailored to each profile. This can significantly boost movement down the marketing funnel as it will help potential consumers relate to your brand and feel like their needs are being met on a personal level.

2. Acquire knowledge on your company’s customer journey

Once you know about your customers, you need to find out about their experiences of purchasing your products or services. You should aim to understand elements such as:

  • Their favourite buying platforms
  • Their favourite promotion channels
  • Their product / service research process
  • Their positive and negative perceptions of your company
  • The barriers they experience when considering purchasing from you
  • The way they interact with your website
  • The way they interact with your promotions

Answering the questions above can help you establish the sticking points along the customer journey. It will help you make improvements where necessary, and find out where to reinforce your marketing efforts to push potential customers down the marketing funnel.

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3. Set out the number of stages

While this guide shows the most common stages included in marketing funnels, you may find that the purchasing journey of your customers includes more or fewer stages. The model you create needs to be tailored to your own customer base. Analyse the results of your research and add any other relevant stages to your own marketing funnel.

4. Pinpoint your most efficient marketing activities and build them up

Researching your customers and their buying journey will help you gain an insight into your most and least effective marketing tactics. Once you understand how your customers interact with your company and have spotted the marketing activities that have driven them towards a purchase, you can build on these to drive prospects down the marketing funnel. Whether it’s PPC advertisement, email promotions, or blog posts driving to your website – your research should highlight your most effective marketing activities.

5. Keep monitoring changes

It’s important to remember that consumer behaviour is ever-changing, therefore you need to keep reassessing your marketing funnel to remain on top of your marketing game!

Investing in a customer relationship management (CRM) system can be particularly useful to record both your prospects’ and current customers’ behaviours. This enables you to record any changes along the customer journey, which you may need to incorporate into your marketing strategy. Additionally, a CRM system can help you automate communications and nurture leads simply and efficiently.

The key differences between B2B and B2C marketing funnels

Now that we’ve looked at how to create a marketing funnel and why you will need one for your brand, let’s take a closer look at the two core types of marketing funnel and how they differ: B2B marketing funnels and B2C marketing funnels.

B2B marketing funnels

To develop a B2B marketing funnel you must first research the buyers’ personas and pain points. These are essential, as B2B customers primarily enter a marketing funnel when realise they are experiencing certain problems. Drawing B2B customers in therefore relies on informative content, such as whitepapers, articles, guides, videos, blogs, and e-books, that pinpoints these problems. Once the leads progress down the marketing funnel, you can introduce how your products and services can help them.

It’s also important to keep in mind that B2B customers typically consist of more than one person as the decision process will generally need a group discussion and agreement. So, consider all the parties involved and nurture leads by including all the relevant people.

B2B customers also commonly interact with a sales representative, meaning that more of the lower stages of the marketing funnel will be focused on sales.

B2C marketing funnels

B2C customers are much more emotional than B2B clientele. Therefore, attracting B2C customers and driving them downwards motion through the marketing funnel typically revolves around them connecting with your brand and relating to your key marketing messages.

As well as this, B2B customers are more likely to be influenced by friends, families, influencers, and reviewers. Therefore, a B2C marketing funnel should always include the extra retention stages to drive more sales. Feefo offers an efficient platform to connect with existing customers and develop an array of real reviews that B2C customers will trust. This can significantly help them in their buying decision process – and drive them to move along the marketing funnel.

Understanding the four key marketing funnels metrics

But how do you know if your marketing funnel is working? Quantitative metrics can let you know how efficient your market funnel is and help determine how successful your marketing activities are along the customer journey.

Metric 1: Cost per acquisition (CPA)

CPA measures how much is spent on marketing activities to gain a new customer. It incorporates all paid marketing activities along the funnel to define the cost of each conversion.

This quantitative metric is calculated by dividing the entire cost of your marketing activities by the number of conversions. If the cost per acquisition outweighs the gains, then it may be time to re-think your marketing strategy.

Metric 2: Customer lifetime value (LTV)

This metric establishes how much a customer is worth to your business over the course of your relationship with them. This is particularly useful for companies offering subscriptions services, such as SaaS (software as a service) businesses. It is also highly relevant to traditional sales and e-commerce businesses, as repeat purchases can significantly add to your customer lifetime value.

Metric 3: Conversion rates

This metric is key to assessing the success of your marketing funnel as it shows the percentage of leads that end up converting into sales. This will help establish where your prospects tend to get stuck along the buying journey. These micro-conversion metrics commonly include the following:

TOFU (top of funnel) conversions: this shows how many potential customers become marketing qualified leads (MQLs). Such leads consist of consumers that have shown a certain level of interest in your company and are therefore more likely to become a customer. You can use a rating system in your CRM to establish who your MQLs are.

MOFU (middle of funnel) conversions: this measures the percentage of MQLs that convert into subscribers or provide their details to sign up to a marketing subscription, such as newsletters or webinars.

BOFU (bottom of funnel) conversions: this measures the number of sign-ups that convert into paying customers.

Your overall conversion rate, alongside these micro-conversions, is important. In fact, micro-conversions will allow you to work on the least efficient stages while the overall conversion rate will show how successful your marketing funnel is.

Metric 4: Conversion rate per channel

This metric will assess the effectiveness of each marketing channel you are currently using, such as emails, inbound marketing, events, paid online ads, webinars, referrals, social media, and more. Assessing the percentage of prospects that convert through each marketing channel will help you determine where to focus your efforts and which channels may need improvement – or sometimes even need to be removed.

Keeping track of the metrics abovementioned is important – not only to establish your current success rates but also to determine how they are evolving over time. It will enable you to make informed decisions that create more conversions and attract even more potential buyers into the top of your funnel.

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Extra tools to consider

In addition to the tools mentioned in this guide, there are even more that you can use to help you further develop your marketing funnel. As company websites are at the core of most businesses, we have included options that will help you understand how potential customers interact with your website and allow you to make changes that will improve your conversion rates. Tools allowing this include:

Heatmaps: this tool can help you gain a deeper understanding of the way your prospects interact with your website. It works in a way that highlights the unpopular parts of your pages in blue and the popular parts in red. This can help you establish which elements of your website may need work and which elements may cause potential customers to drop off. Making the necessary changes to optimise your website design can significantly increase your chances of turning leads into customers.

Session recording: this tool captures the exact actions of your website visitors. From house movements to clicks and scrolling actions, you will be able to see exactly how your users are using your website. As for heatmaps, it will help you establish which parts of the site entice them and which parts may cause people to drop off.

Bug tracking: this type of tool monitors and logs any errors and problems on your website or app. This will not only help you identify barriers that your potential customers are experiencing when trying to purchase your products or services online, but it will also help you improve overall usability. Technical problems are sometimes at the core of purchase drop-offs, which you may not be aware of until you use a bug tracker tool.


Marketing funnels are excellent visual tools that can help drive the success of your marketing activities. Once you’ve established the different stages of the customer journey, you will be able to identify where your customers tend to drop off, and kickstart the right marketing activities to keep them engaged and turn more lea ds into conversions. Such decisions can be supported by the metrics that are calculated to assess the success of your marketing funnel.

Creating your company’s marketing funnel needs a lot of in-depth research about who your customers are and how they behave along the buying journey. It’s important to note that the development of a marketing funnel will vary depending on whether your clientele is B2B and B2C, but tools such as CRM platforms, social listening software, surveys, and review websites can help you to gain this type of detailed knowledge and use it to your advantage.

Feefo can help support your marketing funnel efforts by allowing you to connect directly with your customers and nurture relationships with your clients. Customer reviews are a rich source of information when it comes to learning about your customers’ needs and wants and can even help you expand your client base.

Your marketing funnel should be the basis of your marketing strategy, helping to inform marketing activities across all your platforms – spending the time and effort on getting this right will lead to long-term conversions and loyal customers that will shout your name from the rooftops.

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