A few marketing concepts have weathered the past few decades pretty well. However, it may be time to give the ‘marketing funnel’ a fresh look and see if it’s still relevant in our AI-mobile-social-data world. Before precisely-addressable channels like the internet, email, SMS and digital cable – there were primarily mass media like broadcast TV, terrestrial radio and print publications.
The Funnel Is Inefficient
I’ve worked in product management roles in which I spent upwards of $100M per year to buy broadcast TV media that provided a base level of brand awareness that we needed to stay competitive with peers. The metaphor of a funnel was a good description of the marketing process then, which was a game of numbers initially focused on awareness. That is, start with a large number of people and either hope that a small percentage responds to your offer, or slowly qualify them using screeners, business reply cards, and surveys to identify the ones most likely to buy or buy again—and then focus future efforts on them. It was a system that combined the strengths of general awareness with direct marketing and it worked pretty well particularly if you were selling high-margin products.
However, there is a lot of waste in that model, and research shows that purchase behaviors are often irrational, non-linear and multi-channel. Mass media was just that: it drove awareness among a mass of mostly unqualified, undifferentiated people who may or may not be legitimate prospects for a company’s product or service. It’s like casting a giant fishing net in the ocean, capturing 1,000 creatures and then spending the time to wade through the catch to pull out the three bluefish that you really wanted. Every. Single. Day.
It’s Time for a New Mindset
The marketing process today looks like – or should look like – a cylinder, where a number of leads enter the cylinder already pre-qualified using highly-targeted media and prospects’ data of past behaviors, personal information, preferences, and other digital biomarkers. Sometimes prospects use search engines or other high-intent means to find you, and proactively raise their hands based on an unmet need that they’ve diagnosed for themselves. And sometimes they hear about your product from an online influencer or trusted colleague and choose to seek out your solution without you needing to spend a dime.
The marketing process today looks like – or should look like – a cylinder, where a number of leads enter the cylinder already pre-qualified using highly-targeted media and prospects’ data…
While pre-qualifying someone before they enter the cylinder takes resources, it is much less costly and time consuming than applying expensive mass media and marketing programs equally toward every person in the market. And as prospects move through the cylinder, they are continually screened, evaluated and scored for their propensity to purchase, enabling marketers to invest disproportionately in the ‘high potentials’ to increase their yield.
The takeaway is that marketers must consider that the traditional funnel mindset in our digital age can lead to massive waste and talking to prospects that will likely never buy, which can seem irrelevant and annoying. A cylinder approach pre-qualifies prospects and optimizes marketing investments by leveraging data to identify and communicate only with those most likely to buy.