How Do Marketing Funnels Work (Easy Beginner Guide)

Oct 21, 2021

You've likely heard of "funnels" if you've been learning about marketing analytics. What are they and why is it important?

Marketing funnels can be a helpful tool to visualize the journey customers take, from discovering your brand to converting. These funnels can provide valuable insight into why certain customers convert and others don't.

What Are Marketing Funnels?

A marketing funnel shows the visitor's journey from discovering your brand to converting. Four steps are the most common type.

Attention: A potential customer sees your advertisement, sees a post on social media, or hears about you through a friend.
Interest: They believe you can solve a problem, and want to learn more.
Desire: The prospect has done their homework and is ready to convert.
Action: The prospect takes action -- either they buy your product, schedule a demo or do whatever else you ask them to.

The actions you choose can be different depending on the customer or industry. You might want them to sign up, make a purchase, or fill out forms. A conversion is when someone does what you want. A visitor converts from browsing to performing the action you want

Consider the Amazon purchase funnel. Before a customer can buy a product, there are many steps. Here is how it looks

They visit Amazon.com
They see a product
They add a product to the cart
They complete the purchase

There are many additional actions that can be taken between these steps. However, they don't count in the marketing funnel unless it contributes to the final action. A visitor might view Amazon's Careers page. However, we don't need these steps to be included in the marketing funnel.

Why is this process called a funnel? Simple. The conversion pathway visually resembles a funnel.

A lot of people start at the top, where the funnel is widest.

As people move on to the next step, some drop out, and the group shrinks.

It might seem like losing customers is a bad thing, but it's not. It's not likely that everyone in your funnel will convert. Everyone enters the funnel at the top (visiting your website or looking at a marketing campaign). But only the most qualified buyers should go further down your funnel.

When people say "widen your funnel", you now understand what they mean.

They want to reach a wider audience by increasing brand awareness and inbound marketing. A funnel is wider if there are more people in it.

What are the Different Types of Funnels?

This article will focus on marketing funnels, which begin with a marketing campaign. This could be a PPC ad, content marketing campaign, whitepaper download, social media ad, or an IRL ad. The first step of the funnel is a campaign.

You might also hear of the following types of funnels:

Sales funnels
Webinar funnels
Email funnels
Video marketing funnels
Lead magnet funnels
Home page funnels

These funnels all track the exact same thing, despite their different names. They are the steps that a potential customer takes to convert. They are sometimes called conversion funnels.

What Are Marketing Funnels Used For?

A marketing funnel is not limited to signing up or purchasing. To see how your visitors navigate through a particular website flow, you can place funnels everywhere on your website.

You might want to track newsletter subscription (Viewing the newsletter signup form > submitting form > confirming email) or a simple page transformation (viewing a signup page > submitting signup).

You can create a funnel by identifying your goals and the actions you want your visitors to take on your website.

You'll be able to see the roadblocks and optimize your funnel once you have the data. Let's dive a little deeper.

Why Are Marketing Funnels Beneficial?

Marketing funnels give you access to data that allows you to see which customers are leaving you and which are converting. This is often called a "leaky funnel" because it allows customers to exit the funnel.

Let's use an example of a typical SaaS company as an illustration. Here's what a funnel might look like for them:

Site visited
Register for a trial
Product used
Upgraded to pay

Is it necessary to use the product before you pay? Although they don't have to use the product before paying, it is a good idea.

If you lose a lot of customers after the trial stage, it is possible to improve your onboarding process. You might also need to adjust your funnel's top to ensure you don't attract people who are not your target audience.

Real-Life Marketing Funnel

Let's take a look at the funnel process in a retail store and in an e-commerce store. We will be following a purchase funnel.

Because they can track clicks, page time, and other metrics, e-commerce stores have the advantage of seeing a funnel. Their funnel would look similar to this:

Now we know what a funnel does and how it works. Let's look at Google Analytics, which offers funnels.

How Google Analytics Marketing Funnels Works

Google Analytics has funnels. This is a simple way to track prospects' conversion paths.

To create a Google Analytics goal, sign in and then go to Admin > Explore > Funnel exploration.

These are some things to keep in mind when you create funnels with Google Analytics.

This is a very basic funnel. You don't have to go into detail about the data or optimize.
It is impossible to view data from before you created the funnel. Once you have created your funnel, the data will only allow you to use it moving forward.

You will see a ton of stuff going on. Use this tutorial to orient yourself

If you're just starting to use marketing funnels, Google Analytics can be a great place to start.

What is a marketing funnel?

A marketing funnel shows the sequence of steps that a visitor takes to find out more about your brand and convert.

What are the various types of marketing funnels available?

Sales funnels
Webinar funnels
Email funnels
Video marketing funnels
Lead magnet funnels
Home page funnels

Marketing Funnels: Why are they important?

Marketing funnels give you access to data called a "marketing funnel report", which allows you to see which customers are leaving you.

What Is a Marketing Funnel Example?

Visited the site > Signed-up for a trial > Used product> Upgraded to paying customers.

How to Use Google Analytics for Creating a Funnel

Conclusion

This article has covered everything you need to know regarding marketing funnels. Here's a quick recap:

If someone visits your website and does something that you ask them to (e.g., sign up or make a purchase, fill in a form, etc.), it is called a conversion.
A funnel records the steps leading to conversion. E-commerce companies, for example, want customers to buy products from their site. These steps could be part of their funnel: Visited site > Viewed product > Placed product in cart > Purchased.
A funnel report will show you where people are falling off the conversion path so that you can optimize it and drive revenue.
Google Analytics offers funnels as part of the free Google Analytics software. This is a free and easy way to start marketing funnels.

Were you able to create a Google Analytics marketing funnel? What were your lessons?