Customer Journeys: Redefining the Funnel from Attribution to Transaction
Consciously or not, we interact with marketing every day. While professionals in the trade may be more aware of the techniques used in marketing, the space has become so complex and data-driven that it is hard to fully grasp the reach and impact we can have. In this blog post, I will discuss a couple of key marketing concepts: the customer journey and the funnel. I will broaden the concept of the funnel (typically top of funnel, middle of funnel, and bottom of funnel) to account for more stages and the fact that micro decisions (enabling decisions) create incremental loops until the final transaction, which brings in a new customer.
Attribution & the Customer Journey
“Attribution” is a term used to describe the marketing source which led to a conversion. For example, an advertiser may advertise on outdoor billboards, Google Ads, Facebook Ads, and YouTube Pre-roll. Ideally, we should be able to attribute what campaign and what medium led to a “sale.” However, customers each go through a journey to get to the point of decision.
As we look at this customer journey – the path customers follow as they take action on a specific product or service – it becomes much harder to singularly attribute the conversion (decision) to a specific campaign or strategy. Larger brands may have many factors that lead to such a conversion. As digital media has become part of the mix, we have an increasing number of tools and data to allow us to pinpoint key decision points in the customer journey and, therefore, properly attribute leads and prospects to specific strategies and tactics. Tools such as Google Analytics can help pinpoint the conversion sources from digital marketing efforts and, if well configured, offline methods as well. One way to segment the customer journey is to evaluate the marketing/sales funnel and identify key impacts we can have at different stages of the funnel.
Segmenting the Marketing Funnel
Chances are, you’ve heard about the marketing “funnel” before. It’s a widely-used method for segmenting parts of the customer journey and therefore make an impact at key points in the customer journey. The funnel typically encompasses everything from early brand awareness to the “buying mode.” The funnel is often separated into the “top” and “bottom,” with some people getting even more granular with the “middle” of the funnel. The top represents broad marketing and the earliest stage of advertising while the bottom seeks to convert prospects into customers and focuses on more transactional tasks such as capturing and measuring leads and conversions. At the end of this blog post, we will discuss another way to evaluate the funnel through a 5-step pyramid, which is the framework we use here at Media Genesis.
Top of the Funnel
Research shows that it takes between six and eight touchpoints to make a sale. Because of this, a portion of any campaign needs to be focused on getting more exposure in front of prospective customers over time until they reach the point of decision. Typically, point of decision reaches are much more qualified and often much more expensive – therefore, a mix of brand marketing (showcasing the brand and creating awareness) along with more transactional (point of decision) is a good strategy to improve cost of acquisition.
It is common to use different mediums for different reaches, so strategies at the bottom of the funnel may be more high-touch and personalized whereas top-of-funnel approaches may be more focused on mass media. Until the customer reaches the point of decision (i.e. transaction, conversion, etc.), marketing can be categorized as branding, brand awareness, or brand recognition.
One well-researched issue here is that prospective customers at the top of the funnel often don’t realize or recall the marketing that is being targeted to them until they reach the later stages of the six to eight touchpoints. It’s common for people to be unable to recall all the mass advertising they see. However, consciously or unconsciously, it has an impact.
Additionally, it’s common for marketers to be asked what the ROI is on top-of-funnel tasks since they seem inefficient compared to bottom-of-funnel marketing tasks. However, it is key to “prepare the soil before planting the seeds” and get those 6 to 8 touchpoints we spoke of earlier. There are methods that are used, such as aided and unaided recall, that can help assess the impact of top-of-funnel marketing.
You have probably experienced the grey YouTube screens asking you if you recall seeing an ad for a specific company or product. They will often show you the brands or products (which would make these aided recall tests rather than unaided tests, where you would provide these answers top-of-mind without being told the brands and companies). These tests are designed to identify how impactful this top-of-funnel marketing is, how users remember it when unprompted, and whether that differs from aided recall where a company or product name is given along with a list of other products and services.
Given that YouTube knows what they have shown you, they’re testing your recall along with any possible recall bias (or response bias) which tests whether you accurately recall what you saw, how accurately you recall it, and any bias you may have as a result.
These tests can help demonstrate the growing awareness you can garner through brand advertising at the top of the funnel. If you’re fighting to help justify the top-of-funnel spend, look up the emotional response to the previously seen ads study performed at the Denmark Copenhagen Business School and presented at the Association for Psychological Science in San Francisco.
This study confirmed that brand equity can trigger an emotional response and product preference in as little as 3/100s of a second of exposure. This is incredibly fast – much faster than the average human would react to an incoming object or just about any reaction test. For further reading, look up AAU which stands for Awareness, Attitudes and Usages. AAU is one broadly agreed upon methodology of categorizing and measuring brand awareness, which is a good model for further segmenting brand awareness.
Bottom of the Funnel
While brand awareness and brand recognition are important, it is by capturing users at the point of intent where we start seeing some visible and more measurable traction.
Ideally, we seek to identify users who have made an explicit search in a tool such as Google and capture said user at that stage. The bottom of the funnel is much closer to the point of decision and therefore, much more valuable than any broad targeting. Digital is particularly powerful in this space while some of the more traditional medias still offer a lot of value in top-of-funnel exposure.
Metrics & Conversion
As we mentioned earlier, modern technology has made it easy and convenient to track conversions when and where they happen throughout the customer journey. It’s important to keep in mind that there are many types of conversions. While having a customer make a transaction may be your ultimate goal, there can be incremental conversions – equally as important – that your customer may make along the way.
These can be as simple as clicking on a call-to-action (CTA) button, entering an email address, or filling out a content form. These incremental conversions can take place at any stage of the funnel and support overall objectives.
With the data and technology that’s available today, we have the ability to monitor these conversions in order to determine where and when customers interact with a website. Then, we can take this information and customize our marketing to a particular audience (or group of audiences) in order to strengthen these interactions and produce the ultimate desired action – whatever that may be.
If a user clicked on a Google Ads campaign, landed on a landing page, and subsequently left an email address requesting information, that user can then be reached through additional marketing efforts. For example, reviewing conversion tracking on a landing page, we can see a user’s behavior and remarket to that user for up to 540 days as they travel around the web. Second, we can send out drip marketing via email since the user opted in. More importantly, we can see what campaigns produced more or less activity and conversions, and further refine the ads, landing page, remarketing efforts, and drip marketing.
Over time, the data captured in this fashion is very valuable. Google Ads tracking and Google Analytics, as well as third party CRM and marketing automation (such as Hubspot, Eloqa and others), can add many dimensions to this task. One such method, retargeting – the act of having ads following a user who might not have converted online – has great impact at this stage in the game. You’ve probably experienced this if you’ve put a product in your shopping cart and then left the site without making a purchase. Strangely, that product seems to follow you online to other websites.
The reason why you’re seeing this so often is that it produces great results. Some studies show that retargeting can increase conversions by up to 147% when properly configured. It also can significantly increase branded search results (one study showed a staggering 500% increase), which makes sense if we think back to our 6 to 8 touchpoints and how they impact bottom-of-funnel transactions.
Another good tactic is A/B testing, where small differences are included in ads to see if the results are different. This tactic of changing copy, calls-to-action, landing pages, images, etc. is part of the online advertising efforts toward continuous improvement, and can often significantly improve the key performance indicators (KPI) and, therefore, the return on investment (ROI) of campaigns.
Looking at insights like these can indicate user trends, inform future marketing strategies, and guide the planning process. At Media Genesis, we are specialists with data, so we embrace the incredible range of tools and techniques available to sway opinion and impact decisions all along the funnel.
Many years ago, we started using a slightly different vision of a funnel. It’s a bit more granular and allows us more precision at each step of the sales process. It goes something like this:
Attraction: Attraction is the method by which prospects learn about your organization, product, or marketing message. It can be a billboard, a sales presentation, walking by a store, or an online ad.
Experience: Experience is what happens when the customer interacts with the step above. In a brick and mortar world, it’s how you’re greeted at the store, it’s how the store is laid out, it’s how much the ad you may have seen has continuity with your experience(s). Online, it’s the bounce rate on the home or landing page – how often people open the door and, not seeing what they want, leave right away.
Conversion: Unlike the two previous steps, conversion is a psychological tipping point where the user decides to do something. It can be as simple as adding an item to a shopping cart, following an account on social media, or sending out an inquiry. Conversions can only be reached if the threshold of attraction and experience have met the prospects’ needs.
If the user has a bad experience or isn’t well-qualified in the attraction phase, this person won’t convert. If the request for information is greater than the experience and attractions commanded, it won’t work. This is why a user may refuse to provide information for a sales call but may accept to input an email for a contest or a less complex conversion.
This step and the ones before it can happen many times throughout the customer journey. It may take many incremental conversions to eventually buy – especially products or services with longer sales cycle (in B2B settings, for example.)
Transaction: This step is more mechanical in nature – it is how the conversion is actually managed. It, too, needs to work flawlessly. If a user has a question that is unresolved before the end of the transaction, that user is likely to abandon the action. So, for example, not knowing shipping costs or knowing what the total will be before providing payment information can disrupt the transaction. The funnel can break in many subtle ways that can be diagnosed through combing the data to see where the drop-offs are in this critical bottom of the funnel step.
Retention: Retention is critical. Not only is it smart to retarget and remarket to those who expressed interest (as they are the closest to buyers) it also often takes time for people to make decisions. Shopping cart abandonment in the retail sector is a huge issue. So, capturing key info early (e.g. email) to be able to bring back a customer who has expressed interest in a product can catapult sales and help overcome end-of-funnel issues. It’s also important for another reason: since most users go through many incremental conversions, retention keeps them in the game and maintains their interest as they reach their 6 to 8 touchpoints.
This deep dive into marketing strategy is a fascinating and fun part of what makes organizations achieve success online. We’re happy to work with you to share our knowledge and help gain more success. Connect with us at firstname.lastname@example.org or call us at (248) 687-7888.