What is the sales funnel and is it alive or dead?

The sales funnel is one of the most powerful conceptual tools in marketing. It gives marketers the ability to contextualise how consumers move from being unaware prospects to converted brand advocates. It was originally conceived by Elias St. Elmo Lewis an American ad agency owner who was operating out of Philadelphia in the early 1900s – so yes, it’s an old idea. Lewis conceived the idea that you have to take consumers on a journey to purchase, advising The Bankers magazine in 1909 to “attract attention, awaken the interest, persuade / convince”. Originally this was his formula for writing a single piece of advertising copy, but in time this evolved in to the Awareness-Interest-Desire-Action (AIDA) model which tracks a hypothetical consumer path to purchase over time.

There are two important aspects to the sales funnel model:

First, it recognises that consumers move through cognitive, emotional and behavioural stages as they move from unaware prospect to engaged buyer. This has implications for the development of creative advertising and many aspects of media planning and buying.

  1. Awareness – requires cognitive change (learning)
  2. Interest – is an emotional state (comfort, reassurance)
  3. Desire – is a state of need recognition that is partly emotional and partly rational
  4. Action – is a rational behaviour to satisfy need

In marketing terms, the messaging and media channel selections that influence awareness and interest can be significantly different to the messaging and media selection required to drive behavioural change (purchase) once interest and desire has been created.

Second, it is an hierarchical model in that it takes consumers on a linear journey from being unaware to being a customer. Because it’s an hierarchical model, a prospect has to move through each stage to get to the next, even if this happens very quickly.  The reverse logic of this hierarchy is that a consumer won’t buy unless they are interested and can’t be interested unless they are aware.

Criticisms

Critics of the sales funnel model argue that there is little empirical evidence to support the concept (Demetrios Vakratsas and Tim Ambler, “How Advertising Works: What Do We Really Know?” Journal of Marketing Vol 63 1999).  More recently the advent of digital media has caused the traditional sales funnel approach to be questioned with critics arguing that the path to purchase is no longer a simple funnel, but a much more complex set of interrelated touch points and movements.

Supporters

Whilst many critics observe that the funnel model has limitations, no better model has been proposed to date. In the absence of any other effective model, the sales funnel model has some heavyweight supporters.

Mark Ritson, a leading commentator on marketing globally and a former professor of marketing at London Business School, argues that the overall model is a strategic planning tool that should not be evaluated against tactical needs. He has said of the funnel:

If you think the sales funnel is dead, you’ve mistaken tactics for strategy. Reports of the death of the sales funnel are greatly exaggerated. Consumers might be bombarded by media and marketing from all angles, but marketers must still understand how to influence their journeys towards a purchase.”

“The sales funnel precedes the invention of television, direct mail, telemarketing, cinema ads, the internet and smartphones. Each and every one of these technologies has changed the tactical options available to marketers, but the essential challenge of marketing strategy and the enduring value of a properly derived sales funnel remain undimmed.” (in Marketing Week 2017)

Patrick Barwise, also of LBS and Thomas Barta in their book 12 Powers of a Marketing Leader also note that:

“A marketing model that everyone understands is worth ten times more than a complex one that nobody gets. One examples of this is the marketing funnel. Using it allows you to say things like “only percent of people prefer our brand. We need to increase brand preference because 40 percent of all those who prefer us end up buying us.”

Adobe have also stated the following in their Adobe Digital Marketing Blog:

“A funnel-type breakdown is helpful because, in the most ideal use of this idea, it helps us organise our efforts into tiers—picture a series of horizontal cuts across your funnel. At the top of the funnel, we just want to be noticed. As things progress, we retain interest by satisfying the needs of the consumer (earning ourselves a relationship), before finally looking to close at the funnel’s bottom. Even after the sale is complete, the follow up and service we provide continues to serve the funnel, as repeat purchases, upgrades, etc. come into view.”

Conclusion

The sales funnel remains an important planning tool for strategic marketers.  This is mainly because no viable alternative exists. Currently, there is no other model that can offer at least the same standards of explanation, logic or utility. So, it seems that for the time being, the sales funnel model is easy to criticise but much more difficult to replace.

Author: Simon Foster

Simon Foster MA FIDM Media training specialist helping marketers get more from media agencies