What is the difference between a sales funnels, purchase funnel and marketing funnel?
The sales funnel and purchase funnel are terms that can be used interchangeably and arose from the same origin. That being said the purchasing funnel is the preferred terminology, – according to Wikipedia that is. Wikipedia dismisses “sales funnel”, “customer funnel”, “marketing funnel” as the same thing. However Google search seems to disagree, providing data that the term sales funnel is vastly more popular (x10) than Purchase funnel.
Sales Funnel vs Marketing Funnel?
The biggest single difference as to which is used seems to be the context of use, whether it is in a sales or marketing environment.
In most businesses, sales and marketing are still two separate departments, therefore two separate journey maps have arisen to map the progress of visitors and customers in terms of marketing or sales. However, the trend is moving away from this separation of departments, as the technology used for sales and marketing changes, – integrates. Consequently, there are blurred lines between what is sales and what is marketing, a change driven by the need to increase personalization as consumers become desensitized to traditional sales and marketing techniques.
Inevitably this has lead to the merging of the Sales and Marketing funnel as will become apparent as you keep reading.
What is a Marketing Funnel
For marketing departments, the top of the marketing funnel is where visitors are categorized according to their website interaction and company defined customer persona’s, segmenting visitors into interest groups. Thereafter, moving down the funnel, the most important stage is the identification of the visitor. Subsequent stages raise awareness and build interest in the products related to the topic of interest, techniques such as providing incentives to take action and the use of micro conversions to get the customer used to buying into what is offered, even if whatever is offered is free (free ebook in exchange for email address). Continued interest eventually tips the identified visitor into the sales funnel where the sales team takes over.
The Original Sales and Marketing Funnel
This particular acronym was made famous by the movie adaption of the play Glengarry Glen Ross by David Mamet. However, the internet has come a long way since 1992 when this film was released. Considering that AIDA was first proposed long before the internet even existed, back in 1898 by Elias St. Elmo Lewis, an online update is required. The below model is more relevant for the online world of today.
The Sales Funnel
When the identified visitor enters the sales funnel they become a sales prospect, entering the sales pipeline. This point varies according to the business model in question. Modern marketing tools also cater to sales departments (Hubspot and Salesforce are prime examples). Sales automation tools enable the creation of a custom scoring model that automatically transitions the visitor from the top of the funnel through the various sales stages according to their interactions with your website.
The sales funnel is what brings the potential customer (sales prospect) from the takeover point from marketing up until the point when the sale is actually made.
The typical Sales Funnel
- Purchase contemplation
- Narrow down on a choice.
- Purchase the chosen product.
- Experience post-purchase effects.
It’s a Funnel Wild West out there.
The confusion between sales and marketing funnels is understandable considering that the terms are used interchangeably. The constantly changing nature of roles within sales and marketing departments. In addition, there are many other funnel types, sub funnels if you will, for many different purposes. People are just creating their own variations to meet their own needs. This in part driven by the available technology, which encompasses both sales and marketing tasks and roles and funnels which provide the means to make bespoke stages.
This merger of tools and the creation of suites of tools has generated entirely new marketing terminology used to describe typical function and task, – this is the consequence of SaaS vendors try to elbow room in an ever increasingly crowded marketing space. In addition, funnel stages vary from business to business with no naming conventions.
Unified Sales and Marketing departments have a new name to describe their function, – Smarketing.
What is Smarketing
Smarketing is a marketing terminology for a software development concept, a reflection of the growing influence of Agile and Lean Methodology in the operations side of the business, and is often referred to as DevOps, – this includes sales and marketing.
In the past Sales and marketing were plagued by infighting, failure of either side would result in a blame game. Sales would be blamed by the marketing team for their failure to convert the supplied leads and visa versa, marketing would be blamed for providing poor leads.
Does this sound familiar?
Consequently, sales and marketing were both departments where information was hoarded and access limited, siloed if you will, negatively impacting on overall business performance. Agile methodology and sMarketing provides a solution to this particular problem.
Agile is all about breaking down these data silos and improving communication between departments, teams, and customers. Agile also introduces the concept of constant change and being able to anticipate and react to change. This particular feature helps to resolve a long-standing problem with the traditional funnels where the customer journey was mapped to a linear path defined by fixed stages. Humans are an indecisive lot and therefore often do not follow a linear path to become a customer. Consequently, the traditional approach to sales and marketing funnels is inefficient.
Let’s see how the Agile and Lean Funnel does things differently.
What is a Lean Funnel
In a Lean funnel, a visitor can step backward according to an action or inaction, – according to automated feedback. Instead of pushing the prospect down the funnel, you push the customer to the next opportunity to upsell, cross-sell or even downsell. If you have ever tried to set up a marketing automation funnel for a website then you will know how complex it can get. Well, lean funnels can be even more complex. It is a growth hacking approach to sales and marketing that focuses on dealing with those channels that convert first, focusing on what works first and then maximizing it. Only then move onto the traditional marketing channel mix. Again, this is a step toward DevOps and Agile Marketing. Lean IS Agile so just by definition it implies iterative processes, heavily reliant on customer feedback and providing a highly personalized service over traditional methods. Another fundamental principle of Agile is to embrace failure and learn from it – quickly.
In the online world, this translates to AB testing marketing campaigns for every product or service and acting upon the results. Enter CRO.
Conversion Rate Optimization (CRO)
At the heart of any Agile Marketing approach using a lean funnel is Conversion rate optimization (CRO) strategy utilizing a CRO tool. Such a tool enables the measurement and constant refinement (optimization) of digital marketing efforts through personalization and retargeting. Onsite Retargeting is the most powerful of these CRO tools when used in combination with email marketing or a marketing automation platform. Onsite Retargeting provides
- Highly precise targeting, empowering marketers to segment like never before, limited only by their imagination. Highly personalized messages can be provided according to the visitors indicated interest.
- Increased personalization is the end goal, increased feedback provides greater insights into how to provide customers what they want – product improvement. We are talking big data insights for business intelligence.
Where previously you might think of conversion rate in the context of a complete website, with CRO tools this term is used in conjunction with personalized messages and individual products when dealing with an ecommerce website for example.
What is a Conversion Funnel.
The conversion funnel is a modern purchasing funnel for the online world. It is a lean funnel, – Agile and is clearly focused on eCommerce and lead generation.
The term conversion Funnel is typically used in reference to conversion rate optimization (CRO) and ecommerce platforms like Shopify. The purpose of the conversion funnel is to warm up the customer to buying through a steady stream of content with waypoints – micro-conversions. In exchange for personal data, typically an email address or a simple declaration of interest, an opting in visitor might gain access to an ebook or educational video, a free webinar or something else of value.
The more information obtained from the prospective customer the more accurately they can be targeted with onsite retargeting. This is done by defining personas, creating content for those personas and creating personalized messages for them for when visitors visit each piece of content. Thereafter it is a process of refinement, split testing and optimizing messages, both the message and the delivery of the message (video, images, magnet link or CTA) including the timing and placement of the messages. Ultimately the goal is to lead every customer to make a purchase and improve the website conversion rate, message by message, product by product, thereby increasing sales by ensuring customers find what they are looking for and so that they get what they want or need (whether they realize it or not) from the product or service range provided.
A highly optimized conversion funnel is essential for a successful advertising campaign and therefore should be done prior to any PPC or/and retargeting campaign.
How to Optimize Your Conversion Funnel
Step 1 – Delve into your data to identify customer types and build personas.
Step 2 – Survey your customers in order to define buyer motivation + emotions.
Step 3 – Create content for each of your personas, leveraging your buyer’s motivation and emotions.
Step 4 – Create appealing micro-conversions (great offers and CTA’s) to warm up the potential customer to buying. This could be a simple as a buy-in for a newsletter subscription – get their email address!
Step 5 – Create a message for real-time display based on interaction with your website content. In-the-moment pitches with good incentives convert! (Onsite retargeting with OptiMonk).
Step 6. – Split test multiple variations of your messages to optimize your conversion rate for each message.
Step 7. – Upsell, cross-sell or downsell to make the most of every customer.
Step 8. – Loyalty program – keep them coming back with great incentives and by providing value.
The above tasks are essential tasks for Conversion rate optimization, optimizing the targeting of every step of the conversion funnel / Purchase funnel.
Funnel Future Trends
- Tools will continue to redefine team structure and the sales funnel.
- Increasingly integrated Sales + Marketing Funnels
- Increased uptake of tools that provide an integrated funnel
- Increased use of CRO tools to provide precise messages to every website page visitor according to their location + time period within the Journey map.
- Integrating with Marketing Automation Suites or Email marketing platforms in order to continue the conversation via email and other channels.
- Inclusion of Chat and messaging as a monitored and scored data source
- Increasing use of AI, to respond to and interact with website visitors and customers.
- Increasing amount of user data
- Increasing personalization through CRO.
- Mobile first approach to communication with customers
Ultimately everything online is likely to be referred to as the conversion funnel.
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