In 1898, E. St. Elmo Lewis developed a model that mapped a theoretical customer journey from the moment a brand or product attracted consumer attention to the point of action or purchase. St. Elmo Lewis' idea is often referred to as the AIDA-model, an acronym that stands for Awareness, Interest, Desire, and Action. This staged process is summarized below:
- Awareness – the customer is aware of the existence of a product or service
- Interest – actively expressing an interest in a product group
- Desire – aspiring to a particular brand or product
- Action – taking the next step towards purchasing the chosen product
The purchase funnel is also often referred to as the "customer funnel", "marketing funnel", "sales funnel", or "conversion funnel". The association of the funnel model with the AIDA concept was first proposed in Bond Salesmanship by William W. Townsend in 1924.
This early model has been modified by marketing consultants and academics to cater to the modern customer and is now referred to in marketing as the "purchase funnel" or "buying funnel". Many different business-to-consumer purchase models exist in marketing today, but it is generally accepted that the modern business-to-business purchase funnel has more stages, considers repurchase intent, and takes into account new technologies and changes in consumer purchase behavior. As a model, the buying funnel has been validated in a variety of domains, including searching, keyword advertising, and lead generation, but also modified to include previously unconsidered steps and metrics such as outbound sales, Internet impressions, and Sales Funnel Stages.
The purchase funnel concept is used in marketing to guide promotional campaigns targeting different stages of the customer journey and as a basis for customer relationship management (CRM) programs and lead management campaigns.
Similar to a purchase funnel, "conversion funnel" is a technical term used in e-commerce operations to describe the track a consumer takes through an Internet advertising or search system, navigating an e-commerce website and finally converting to a sale.
The main elements of an online purchase/sales funnel are:
- Traffic sources (i.e. SEO, PPC, referral traffic, etc.)
- Top of the funnel (TOFU) which coincides with the traditional awareness stage
- Middle of the funnel (MOFU) describing prospects in the consideration stage
- Bottom of the funnel (BOFU) corresponding to latter life-cycle stages (i.e. decision, conversion, purchase)
- Re-engagement paths – strategies and techniques meant to recover lost prospects/leads, usually through retargeting ads or email marketing
The modern conversion funnel can have many entrance points, meaning people can enter at any stage of their life-cycle, they can leave and enter again. This is why an effective online marketing strategy requires an omnichannel approach which combines various traffic sources, campaigns and re-engagement paths, and makes them work as one in order to finalize the purchase and even lead to loyal customers or brand advocates.
- E. K. Strong, Jr. The Psychology of Selling and Advertising. New York 1925, p. 349 and p. 9.
- "The salesman should visualize his whole problem of developing the sales steps as the forcing by compression of a broad and general concept of facts through a funnel which produces the specific and favorable consideration of one fact. The process is continually from the general to the specific, and the visualizing of the funnel has helped many salesmen to lead a customer from Attention to Interest, and beyond" (p. 109).
- A modern purchase funnel concept - Marketing-made-simple.com (2009)
- Court, D. Elzinga, D., Mulder, S. and Vetvik, O.J., "The Consumer Decision Journey", McKinsey Quarterly, June 2009, Online: http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey
- Branding In The Digital Age - You're Spending Your Money in All the Wrong Places
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- Jansen, B. J. and Schuster, S. (2011) Bidding on the Buying Funnel for Sponsored Search Campaigns. Journal of Electronic Commerce Research. 12(1), 1–18.
- Wilcox, G., & Sussman, K. (2014). Lead-generating social media strategies using the social media performance model: The B2B connection. Journal of Digital & Social Media Marketing, 2(1), 70–78.
- "How The B2B Marketing Funnel Works". www.bizible.com. Retrieved 2016-01-06.
- 5 Stages of a Sales Funnel – The Ultimate Guide