As a small business, you might hear a lot of agencies or marketers throw around the term “marketing funnel.” It’s certainly a funny concept on the surface. After all, if you never studied the funnel in school or created your business using more instinctive approaches, we would understand if part of you thinks that the term is some ridiculous, academic marketing-speak made up by so-called experts that never once sold anything in the real world.
But the truth is, regardless of what business you run, it’s a great concept to know. Mostly because it can help you better understand buyer behavior, which is really the point when you talk about marketing and operating a relevant and successful business. First, let’s do a quick a primer.
Who Created the Marketing Funnel?
In 1898, E. St. Elmo Lewis developed a model that mapped a customer journey from the moment a brand attracted a consumer’s attention to the point of purchase. St. Elmo Lewis’ idea is often referred to as the AIDA-model, an acronym which stands for Awareness, Interest, Desire, and Action (AIDA). In 1924, William Townsend took what ST. Elmo Lewis developed and turned it into a funnel structure with the book Bond Salesmanship.

The funnel structure has held up remarkably well over the years. That’s because structure accurately mirrors real customer behavior. (You can actually see this, for example, if go to any e-commerce site and analyze the data of visits to actual purchases – it’s literally a funnel shape. More people are aware of the site or visit than consider buying the products and service or engage with the content on the site. And similarly, more people consider buying than actually purchase and then advocate for a product or service by spreading the word about it. See the adjacent graphic.)
If you think about the marketing funnel, one thing many companies do is try to maximize the number of people who are simply aware of the brand (at the top of the funnel) so that when it comes time for consideration or purchase, more consumers think of their products and services first. You need only look at Coca-Cola, Nike or Apple to see this approach in play. But other companies use their resources to maximize the middle and lower funnel – in other words, push the maximum number of people who are aware of the brand to make a purchase or convert – and then of course, advocate for your products and services.
Over the years, the funnel structure has evolved to include other terms (not just AIDA), where today, you might see words such as brand, engagement, consideration, acquisition, conversion, and loyalty / advocacy, but the overall thrust remains the same. To keep it easy, we at Marketing Nice Guys prefer to use terms such as “top of the funnel,” middle of the funnel or lower-funnel to refer to the different stages.
4 Reasons for Small Businesses to Focus on the Marketing Funnel
So, why should a small business focus on the funnel? Here are four reasons – all of which can help improve your marketing performance.
No. 1: The Marketing Funnel Helps You Think Through the Buyer Journey
One of the things we often see with small businesses is that they are keenly focused, for good reason, on conversions. After all, that’s the ultimate proof of whether the business and any marketing efforts are working. But marketing encompasses much more than just immediate term conversions as, with any purchase, a lot has to happen before a potential customer or buyer converts. The marketing funnel can help businesses understand that journey toward purchase. How do I make someone aware of my products and services? How do I acquire them? What marketing activity makes them take the plunge to ultimately buy. In addition, you might have different audiences that have different journeys toward purchase – or an audience that influences the purchase of a product or service by someone else. Mapping that out can help you better strategically market at those key points in the buying cycle.
No. 2: The Marketing Funnel Helps You See the Bigger Picture
What’s important for small- and medium-sized companies to know is that only focusing your efforts on one area of the marketing funnel won’t be as effective as pursuing a more full-funnel strategy. For example, you might have a great strategy for pushing your brand out through social media in terms of top-of-the funnel awareness, which is important, but if you don’t focus on customer acquisition or conversions in the middle-to-lower funnel you are likely missing out on maximizing the number of purchasers. Similarly, by only focusing on those in the lower funnel (those who express the most intent to buy) you could be losing the opportunity to brand your company in front of a bigger audience and grow. Think about it this way: The more people you have at the top of the funnel, the more potential you have to make the bottom of your funnel wider.
The goal of all marketing is to help you maximize the number of individuals getting to each stage. Using this funnel approach can help you see how all your marketing activities are connected as well. Let’s say, for example, you see data that suggests your newsletter (mid-to-lower-funnel) has the best conversion of any of your marketing activities. Wouldn’t it make sense to think about and implement a strategy to get more people to subscribe to your newsletter? But a lot of companies don’t put two and two together when it comes to their operations. In other words, they may know the data but then they may not then push awareness of their newsletter (top-of-the-funnel) to potential audiences in social, in content or other areas. That’s where defining the funnel and buyer journey can help.
No. 3: The Marketing Funnel Helps You Create a Plan
One of the cardinal sins of even large organizations is that they decide to take the “Nike approach” when it comes to their marketing – they “just do it.” This is bad for several reasons. For small- and medium-sized businesses, lack of a plan often results in marketing that is all over the place with no consistent foundation or lack of coordination on goals. As mentioned above, marketing is one of those specialties where different channels work together (email works with social, which works with paid media and content etc.). So, having an idea of the buyer journey (the funnel) helps you put together a cohesive plan, where each channel can help you succeed and feed other channels pushing more people down toward purchase.
No. 4: The Marketing Funnel Helps You Analyze and Find Leaks / Weaknesses
Let’s say you drive a lot of traffic to your website through search. On the surface this is great, but then you notice that not many people who do come to your site are engaging with your content once they get there. Maybe those individuals aren’t filling in the forms, viewing your products, or subscribing to your newsletter. There may be one of two issues going on.
- An engagement/acquisition problem (middle of the funnel). It might be that your pages have to be improved so you get better engagement. In other words, you have a problem more at the middle of the funnel – visitors recognize your brand enough to come to your website but your pages need to be better at acquiring them or helping them take the next step.
- An awareness problem (top of the funnel). Let’s say you dig further and notice that the search terms individuals are coming to your site on aren’t very relevant to what services or products you have, you just happen to be ranked for certain things. We see this a lot with companies that produce content. For example, a marketing firm that mentions an actor on a piece of content but attracts traffic from people only interested in that actor, not their services. In other words, they may rank for all sorts of terms simply because they mention something on a page. What this amounts to is actually a top-of-the-funnel awareness problem because their brand isn’t becoming known by the right audiences for the topics that are relevant.
As you can see from above, having a marketing funnel approach can help you break down where such leaks are occurring and help you address the right solution in the right area, whether it’s awareness, engagement, conversion, or advocacy.
Conclusion
We hope this has been helpful in terms of thinking through why a marketing funnel approach can clarify the buyer journey process for your particular business. In recent years, some agencies have tried to suggest alternatives to the funnel, but they mostly have all failed because they don’t actually reflect reality. We can’t emphasize enough that the goal of all your marketing, in the end, focuses on maximizing those that will end up purchasing. But that doesn’t mean it involves only keying on marketing activities in that lower funnel purchase area. Using a funnel-based approach helps you visualize are all the parts of that buyer journey and making sure you pay attention to every area. At Marketing Nice Guys, we’re happy to help you think through your own buyer journey and support you at different points where you need it along the way. Just contact us for a free consultation.