Brand Funnel Explained: How It Works & How to Use It

January 24, 2022

By: Grace Lau

Brand Funnel Explained: How It Works & How to Use It

One of marketing's most widely understood concepts is that of the brand funnel.

When it was first developed at the end of the 19th Century by E. St. Elmo Lewis, it was called a “sales funnel”, reflecting the terminology and business landscape of the time. Fast forward a dozen or so decades, and we have now reached a point where the “brand” is as important to the buying habits of consumers as any other metric.

Image Source: Stackla
Image Source: Stackla

86% of those asked say that “authenticity” is important to them when making purchasing decisions.

This represents a seismic shift away from brand competence according to the adage: “the bigger brands must be more reliable”, while not factoring in brand personability. As expected, the most effective modern-day advertisers are social media influencers.

The most successful influencers are those that manage to bridge the gap between achieving maximum engagement and being specific in their messaging, although this isn’t always easily achievable. If you think of how many times you’ve skipped the “this video is sponsored by” part of a YouTube video, you’re at least halfway to understanding this dilemma.

In a world so different from that which gave birth to the original sales funnel concept, how is such a framework still relevant to brands around the globe today? We’ll discuss what the brand funnel is, how it works, the different varieties, and the things you can do to optimize your company’s brand funnel and steal a march on your competitors.

What Is A Brand Funnel?

Whilst the concept or idea behind what we now call the brand funnel has been around for over a century, its currently accepted model still may not be widely understood.

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A brand funnel measures the progress of customers throughout your purchasing journey. In an ideal world, everyone’s brand would appeal to every consumer that encountered it, maximizing turnover and profits for business.

This isn’t how things work in reality, however. Understanding why and how your audience becomes smaller the closer they are to purchasing your product or service can be a key element of understanding how your business is performing.

Separated into individual stages, this process of self-elimination of customers can, if you have the data, highlight all sorts of pros and cons regarding your existing marketing model. Are you attracting too many people who aren’t of your target audience in the first place, creating a naturally unrealistic first stage?

Do the people that start but don’t finish the funnel’s journey with you have a reason for doing so that is more to do with the brand image of your business than it is their particular consumer profile? Could you be utilizing your existing model to turn more people from interested to purchasers, from purchasers to repeat purchasers, and from there to ambassadors?

All these questions are ones that a clearly defined brand funnel can help answer. So let's take a look at how it works in practice.

How Does A Brand Funnel Work?

We now know what the brand funnel is - now we need to take a look at how it works. As mentioned before, this concept is largely unchanged since 1898, so it must hold some value for modern businesses.

The funnel is not only a concept that shows how your audience narrows from “people who see your adverts” to “people who buy from you”. Along the way, it explains what it is that drives certain people to turn away from you, informing your customer relationships and allowing you to improve customer experiences going forward. It manages this by being split into three sections:

  • Awareness
  • Consideration
  • Purchase

Largely speaking these are the elements that make up your typical brand funnel. To better understand how these work, we need to take a closer look at each in turn.

Awareness

Image Source: Unsplash
Image Source: Unsplash

The Awareness (or “top of the funnel”) phase refers to the time when our prospects are the largest in number and most diverse. It’s the data group that contains both the people who will become customers and those who you’ll lose along the way.

It’s the time in the customer journey that sees our marketing at its most general, and our messaging at its most vague. We’re talking to people who may not have previous experience of the industry in which we operate, so we need to make sure our messaging is appropriate, accessible, and inviting.

The point of this is that it isn’t about achieving purchases right out of the gate, but more about getting the message out there to consumers. With messaging containing unique value to consumers, awareness is increased as is your brands worth.

This doesn’t mean going so general as to completely lose your identity - so, if you’re selling camping equipment, don’t shoot for the people whose biggest holiday conundrum is “which 5-star hotel to stay in?”

Rather, it’s about speaking to the most earnest campers, people who camp once every two to three years. This customer persona should be at the core of every brand funnel decision.

Consideration

Image Source: Unsplash
Image Source: Unsplash

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If customers make it through the awareness stage, they move on towards the consideration (or “mid-funnel”) phase that is less about building general awareness of the brand and more concerns itself with addressing people who are now at least moderately interested in what you’re offering.

It reflects the middle ground between initial curiosity and purchasing and requires a more considered, specific approach to advertising without becoming so specific that those who may be still on the fence feel alienated. And the language used here should reflect this change. This is where you get to talk about what makes you stand out from competitors or how you solve problems that others don’t.

It’s also the point where brand loyalty can begin to be introduced into your materials by connecting the item to your larger brand identity.

So here, if we go back to our camping example, you’re dealing less with “who wants to go camping?” and more with “when you’re looking to go camping, here’s what we can offer, and here’s why you should shop with us.”

Purchase

Image Source: Unsplash
Image Source: Unsplash

The purchase (or “bottom of the funnel”) phase is the next stage. People who have made it all the way from the top of the funnel to this stage are almost ready to make a purchase.

This doesn’t mean that we should assume that they’re going to complete - more that it allows you to speak more directly to them about what they’ll get from your goods or service.

At this point, it’s all about making the purchasing experience easy, convenient, and comprehensive. Purchase-level marketing is generally more simplified, more assertive, and more direct as a result.

Here, you’ve done about as much convincing as possible, so ensure that your messaging is succinct and doesn’t come off feeling like a hard sell as that will, more often than not, put people off, minimizing your conversion stats.

The Post-Purchase Stage

An increasingly important area for companies to consider in relation to their customer’s journey is what happens after they’ve made their purchase.

You have between a 5% to 20% chance of selling to a new customer, compared to a 60-70% chance when it comes to returning customers.

So not only does it take more to move a customer from the top to the bottom of the brand funnel, but the chance of that journey resulting in a purchase is significantly lower. Anyone with even a modicum of business knowledge can see that this is an impractical way to spend most of your time. So invest in more likely sales where possible using this concept.

Making sure issues are resolved quickly, with minimum fuss on the customer’s part is something that most consumers want, so having a decent IVR system with trained agents on the other end of their call is of the utmost importance.

There’s no denying the importance of returning customers to a business. When coupled with how much easier it is to acquire a sale from them, it’d be foolish not to consider this as part of our central brand strategy.

Similarly split between three segments, the post-purchase brand funnel looks like this:

  • Retention
  • Loyalty
  • Advocacy

Retention is the most immediate stage following a customer’s purchase. This stage is all about balancing the need to retain converted consumers whilst also not being too pushy. No one wants to have their inbox filled with marketing comms over the days or weeks following their initial purchase.

It’s hard to imagine someone would say no to a few emails, though, maybe with a discount off a next purchase? Or perhaps a quick survey that enters the customer into a draw to win a prize? Getting this balance right pays off with half of your business’s repeat buyers making a second purchase within 16 days of their first.

Loyalty refers to the stage of the customer’s journey when they begin to be less concerned about the product and more about the brand itself.

Customers that reach this point are more inclined to keep buying from you because they identify with your overall brand, and their purchasing has less to do with an individual product that you sell. Limited edition or collectible lines of products are a really effective way of taking advantage of this.

Getting this balance right means that customers are more likely to discuss your brand with friends, family, and colleagues, which leads us on to the final stage of the post-purchase funnel - advocacy.

By the time this is reached, you’ll have invested a wealth of time and resources in getting a consumer to this very point so the rewards need to be of value to the customer.

Image Source: Unsplash
Image Source: Unsplash

During the advocacy stage, customers engage with reviewing your products both on your site and on blogs or social media. If all goes well, they’ll brag about your products across all their socials.

Whilst this may, in isolation, seem a little gauche, and doesn’t apply to all brands, it is nonetheless the gold standard that everyone working on a brand’s customer journey should be aiming for.

It’s especially beneficial if any of these customers have a decent social media following, as the opportunity for brand partnerships are something influencers and companies alike are always on the lookout for.

The Brand Funnel’s Influence on Content

When it comes to how to put this into practice through your content, it is worth noting that the different stages of the brand funnel require a slightly different tone of voice. It’s about selecting how you want to present the different stages of their journey with you.

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Think about how things such as logo variations, the presence (or absence) of a color scheme, or how annoying the model in a brand’s advert is, and you’re on the right track.

The marketing literature that you use for a more general audience will strike a different tone to that which is getting returning customers to buy from you again.

Awareness Stage

Content at this stage should seek to strike a more general note without coming across as too vague. It should also seek to provide answers to the initial queries of your more curious audience.

Being proactive and answering questions on blog posts or tutorial videos is one such way this can be achieved. Avoiding technical jargon, hard-selling cliches and patronising language here is a must.

Consideration Stage

At this point, you’ve got your audience at least somewhat on board, so you can afford to approach material that reflects that in order to move them further along their funnel journey.

Here, you can address pain points more directly because they are a more specific group of potential consumers. It’s here where content based around product comparisons and free samples come into play.

To be avoided here would be the generalist language of the consideration stage as it conveys an idea to the customer that you don’t really know what you’re talking about. Similarly inadvisable would be language that is too succinct or direct as it also portrays you as a “sales at all cost” business.

Purchase Stage

We touched upon how the messaging in the purchase stage is more purposeful, direct, and concise. It’s more focused on easing the pain of committing to something like a purchase or subscription whilst also making the process more seamless. Free trials, flash sales for new customers are all excellent choices.

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Being flowery or overly complex in the language you use here is a bad idea as customers just want to get a purchase done smoothly.

Image Source: Unsplash
Image Source: Unsplash

How to Use It

It’s safe to say that we all understand the brand funnel by now. What remains to be mentioned is how best to use it.

In short, brand funnels are used in order to assess the health of your business and the success, or lack thereof, of a marketing campaign or your overall messaging. It allows you to take a fairly detailed look at the state of your brand equity too.

Making the most of the data you can acquire from customers these days as a digital business means identifying what’s working and what isn’t.

If your brand funnel looks like a skinny breadstick, then this means two things. On the positive side, it means that your messaging is engaging throughout the customer journey and very few of the initially interested customers leave without making a purchase.

On the downside, it means that your awareness messaging isn’t reaching as wide an audience as it could, giving you something to work on.

Similarly, if your brand funnel takes the shape of an actual funnel, the inverse is true. You’re reaching a wide and diverse audience with your initial messaging but something later on in the journey is causing them to go elsewhere.

The most ideal brand funnel shape is that of a wide starting point that, whilst losing some of this on the journey down, is still converting a sizeable amount of curious potential customers into eventual purchasers.

Conclusion

Throughout the course of this article, we’ve highlighted and explained what a funnel is, what it’s composed of, and how to use it. Whilst the idea behind the concept of the brand funnel is nothing new, how it is used changes with shifts in modern business.

Any business that functions in a post-COVID world is set for an awful lot of shake-ups, rethinking, and remodeling. When such drastic changes take place, the old ways can get left behind. And sometimes, this is a good thing.

Foundational concepts such as brand funnels, though, remain a cornerstone of marketing for a very good reason, so abandoning completely would be a bold and slightly silly move.

People will always want to buy things, so having a mechanism in place which highlights how successful you are at getting your message out to people that they should buy from you remains as crucial now as it has ever been.

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Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud business phone system and communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Here is her LinkedIn.

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