The purchase funnel: turning prospects into advocates

1. Pre-awareness

At this stage, the consumer has had no previous contact with your brand.

2. Awareness

People can be made aware of your brand with or without the desire to purchase. Awareness can be based on a communications message, word of mouth or independent discovery.

 

Purchase intent trigger

The moment at which the consumer starts thinking about a purchase could be triggered by an event, a change in circumstances, a pay rise, a need, or even an advertising message.

See also:
Psychology of marketing

3. Research & familiarity

At this point, the potential customer has decided they want or need a product similar to yours. They are likely start reading reviews, learning the features, making comparisons, asking for opinions, and using the internet to research their options in detail. This phase of the process can be lengthened or shortened depending on the value of the product – people are unlikely to spend time researching economy baked beans.

4. Opinion & short list

Decision on the most likely purchases, this could be in the form of a written list, a mental note, or book marked websites.

5. Consideration

Deciding between the most likely purchases, taking test-drives, going to a product demonstrations, asking the opinion of people who have already purchased.

6. Decision & purchase

Final decision on the brand and product and whether they can afford it. Then taking the plunge, online or in a more face to face environment.

7. Brand / product advocate (or saboteur)

Once the consumer has bought, they will very quickly form an opinion on the product. Were there hidden costs? Did it scratch easily? Did it use too much petrol? Did it go mouldy quickly? If the opinion is especially positive they may spread the news of your brand via word of mouth promotion and positive reviews. This process is made especially easy on the internet.

 

8. Repurchase intention

It's an established marketing fact that existing customers are significantly easier to convert than a completely new prospect, so bear this in mind when designing your marketing strategy. At some point in the future, it is likely that the product will need to be replaced or upgraded. If they are pleased with their purchase, there is a high likelihood they will consider buying from you again, but the battle isn't won yet.

 

Preconceptions and experience

Did the previous buy provide an excellent user experience, or break after a month? If it broke, customers may defect to your competitors. If your customer was happy, they may re-enter the funnel at Stage 3 - Familiarity.

Familiarity

Although the customer probably has a good idea about your brand, they will want to familiarise themselves with your current product range, and with your competition.

Opinion

Should they upgrade to the next item in the product range, stick with the most recent version or swap for competitor?

 

Now customers continue through the funnel as before, with final considerations, a decision, and eventually a second purchase.

Purchase funnel as a marketing communications model – an automotive case study

The purchase funnel can be used to guide your marketing communications strategy, and this approach is can form the start of a customer relationship marketing (CRM) programme. By understanding where customers are in their decision process, you can make your messages more personalised and more relevant. As an example we'll consider some typical stages in the automotive purchase funnel. As cars are a high value purchase, most consumers will take time to evaluate their options carefully before deciding on the best course of action.

 

Marketing communications strategy for a fictional automotive business - CLICK FOR A LARGER VERSION

1. Before the potential customers has even started looking for a car they will probably be aware of some of the major car brands and may even have an idea of the model they're looking for. However, lesser known brands may also offer a suitable product, and at this point it's critical for these companies to focus on brand awareness to ensure they make the list of potential considerations. Kia is a good example – a relative newcomer into the American and European markets with a surprising range of models. The customer notices an advert while watching evening TV and realises that Kia are selling cars in their country.
   
   
2. Once the brand has gained some attention, more specific information will need to quickly follow. What does the current model line up look like? Do they have any seven seaters? What makes a Kia special? Are they in the right price bracket? Is there a dealership nearby?
   
   
3. If the customer is interested in an SUV they will need some further product information on the Kia offering, so they turn to the internet. How much does it cost? What engines are offered? How long is the warranty? What do the press think about it? Is the website easy to navigate and professional? Are there any horror stories in an owner's chat room?
   
   
4. The Kia SUV has made it on the short-list and a brochure is ordered, but they still need to make it clear why they are better than the competition. Kia makes a point of their impressive 10 year warranty which certainly stands out from the crowd.
   
   
5. Time for a test drive. Is the dealership well presented? Does the salesman know what he's talking about? What options are available? Is the car impressive on the road? Is there room in the back for the kids?
   
   
6. Ok, the customer is convinced and is ready to part with their hard-earned cash. Is the transaction smooth? Are the finance deals reasonable? Does the salesman do a thorough hand-over?
   
   
7. A few years go by, and if things do go wrong, is the warranty process easy? Is the repair center helpful and quick? Is a courtesy car provided? The customer is happy, and convinces their neighbour to try out the same car.
   
   
8. It is now three years later, and a surprise mailing pops through the door inviting the customer to a special event at a racing circuit to experience the new product range.
   
   The customer is impressed with the warranty, the service and the reliability and adds the model up to their short-list for a new car.

In this case study, Kia have identified the relevant customer touch points and ensured the relevant information is presented in a way that is personalised for each stage in the customer journey. All elements of the marketing mix have been used to successfully convert a prospect into an advocate. Success!

Alternative purchase funnel models - a critique

A quick Google search will reveal many different (and sometimes conflicting) purchase funnel models. Most are produced by marketing consultancy firms keen for some easy PR exposure, often using attention grabbing headlines such as "The purchase funnel is dead". It is important to take these with a pinch of salt and evaluate the findings yourself before using them as part of your own strategy. Don't rip up your marketing rule book every time another model is published - they are much more similar than a first glance might suggest.

 

Remember what the purchase funnel is meant to be:

 

The purchase / purchasing funnel is a model which describes the theoretical customer journey from the moment of first contact with your brand to the ultimate goal of a purchase.

 

We've summarised two evolutions of the funnel below, and we can learn from both of them.

 

Forrester (2007) [1]

Forrester make two important points in their research:

 

1. The purchase funnel is more complicated than the the traditional funnel model describes.

2. There are some new factors to consider when using the funnel in a modern context (such as social media).

 

The Forrester report first makes the point that the traditional purchase funnel may be too linear and that the a variety of complex factors are at work, with social media at the center. In this case the traditional funnel is described as a five stage process including Awareness, Consideration, Preference, Action and Loyalty (see below).

The model above describes a complex consumer journey, with major decisions based on user-generated content, recommendations from friends, peer reviews and competitive alternatives.

 

Once the purchase is complete, Forrester describes brand advocates as 'contributors', those happy customers who go on to promote a brand through social media tools. A four stage measure of brand advocacy is proposed which determines how active an advocate is.

 

Forrester's method of measuring the 'engagement' of brand advocates when applied to social media

The learning point from Forrester is that you shouldn't be fooled into thinking purchase decisions are simple, and that people are influenced by different factors. If social media such as customer reviews, and user generated content are important to your customer's purchase decisions, then Forrester's ideas may well come in handy.

McKinsey (2009) [2]

McKinsey is one of the biggest players in the marketing consultancy world, and they also believe the traditional purchase funnel could do with a few tweaks. This time the 'traditional funnel' is quoted as another five step process as shown below.

 

Interestingly, McKinsey's definition of the traditional model conflicts with Forrester's (comparison below).

 

Forrester	Awareness	Consideration	Preference	Action	Loyalty
McKinsey	Awareness	Familiarity	Consideration	Purchase	Loyalty

 

This of course doesn't matter at all, but it highlights the important point that these models are not scientifically proven, but based on the thoughts of consultants which have in turn evolved from different experiences of different brands.

 

McKinsey go on to propose a purchasing loop, which makes a few good points building on the Forrester model:

 

1. It's important to understand the trigger which causes a customer to start the purchasing process

2. Your brand is just one of the product which the consumer is considering as part of their 'short list'

3. It's important to pay attention to all customer 'touch points'

 

McKinsey's 'customer decision journey' is summarised in the diagram below:

Other models

Many other models have been proposed and discussed at great length. Examples include the 'purchase spiral' proposed by David Armano [3] which takes a 'community' focused approach which assumes the biggest purchase decision factor is conversation rather than marketing communications. This agrees to a certain extent with Forrester's model [2] but does not concentrate on just internet based social media applications.

 

Many more purchase models are out there - doubtless being promoted in presentations all over the world right now. Remember, consultants deal in knowledge and need to win pitches in order to generate thier income. Nobody wants to pay six figure consultancy fees for information they could learn in school - which may explain why new exciting sounding systems are constantly emerging. If you research the unique customer journey for your brand and develop your marketing strategy accordingly you'll be a long way towards success.

 

Model critique summary

We can learn a lot from the models discussed above, as summarised below:

 

1. The purchase funnel is more complicated than a traditional linear model describes.

2. There are some new factors to consider when using the funnel in a modern context (such as the internet and social media).

3. It's important to understand the trigger which causes a customer to start the purchasing process.

4. Your brand is just one of the product which the consumer is considering as part of their 'short list'.

5. It's important to pay attention to all customer 'touch points'.

6. Conversation may play a large part in the purchase decision pathway.

 

Here at Marketing-made-simple.com we've taken the best bits from the traditional purchasing funnel model, and added the most important findings from the models discussed above to create (what we believe) is the best summary of the generic customer decision journey. We're not pretending to have invented a ground-breaking new model, just sensible additions to a proven method of describing the purchase process. You can view the diagram at the start of the article by clicking here.

Final words

The purchase funnel varies depending on the nature of your business, your customers approach to buying and your approach to selling. The customer journey for an online pharmacy will be very different to that of a Bentley dealership. What is important is to identify the key stages in your funnel and decide how you can maximize the chances of progression towards a sale.

 

References

[1] http://www.forrester.com/Research/Document/Excerpt/0,7211,42124,00.html

[2] http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/The_consumer_decision_journey_2373

[3] http://darmano.typepad.com/logic_emotion/2007/08/the-marketing-s.html