Less is more: The marketing funnel
When small businesses come to DWD for help, one of the first things we often notice is that they are trying to reach too many people with their marketing efforts. Their goal is simple: To get their name in front of as many people as possible.
Unfortunately, there are are a couple of problems with this approach. First, it can be costly to try to reach “everybody.” There are many people out there, and almost as many avenues to reach them. Trying to target every possible audience is virtually impossible to do on a small business’ limited budget.
The second problem with this approach is that it isn’t usually very effective. The reality is that no business can appeal to more than a few groups of people. Called the target audiences, these are the groups of people who will be most likely to buy from the business. Trying to reach anyone else is probably wasted money.
That is why one of the first things we recommend to small businesses that come to us for help is the creation of a marketing funnel. By using targeted digital marketing to sift through potential customers and reach those most likely to spend money with our client, we can increase the results they get from their marketing efforts.
What is a marketing funnel?
Consider this point of view from Mikael Dia, a digital marketing expert and the founder of a tool for understanding and utilizing marketing analytics, called Funnelytics: “If you want to sell anything online today you need a funnel. People’s attention is at an all-time low and if you just send traffic to a website hoping that your customers will do what you want them to do, you are mistaken. You need to hold their hand and guide them step by step. That’s what a funnel does.” Using this method, Mikael scaled one of his businesses from $2,500 / month to $5,000 dollars per day in revenue and has helped countless clients grow at a similar quick rate as well.
Essentially, a marketing funnel works exactly how you’re picturing it. You pour your target customers into the top of the funnel. If done right, that funnel will slowly begin to leave behind customers who are not likely to buy so you can spend marketing dollars on those who will.
Let’s work through two example customers to illustrate how a marketing funnel works:
Companies A & B both sell a widget to men in Chicago. Company A posts about their widget on Facebook and other social media platforms and has a nice website where you can buy their product.
“Essentially, a marketing funnel works exactly how you’re picturing it. You pour your target customers into the top of the funnel.”
Company B, however, knows that their ideal customer is between 25-30 years old and tends to like pages on Facebook about sports cars. Company B dumps these people into their funnel with a fun promotional video on Facebook. If someone watches more than 75% of his or her video, that viewing is considered a success.
Those people are then moved through the funnel and start receiving ads on Facebook that lead them to an informational page on Company B’s website. Some people may make a purchase there, and that’s great. However, everyone who lands on this page, regardless of whether or not they buy anything, will start seeing advertisements on Google Searches, CNN.com, Facebook, and even their local newspaper website.
Sounds like a lot of work, right? Well, it’s not. This funnel needs tweaks but does not need to be added to every day like a traditional social media presence. Now sure, if you don’t have the time to implement the funnel, you’ll need to hire a company like us to do it for you, but you can’t afford NOT to implement one. Only 1-3% of people will purchase a product on an impulse without being comfortable with the brand or doing any research. That means that by not having a funnel, you are missing out on the opportunity to convert 97 percent of people who learn about your business.
So how does one implement a marketing funnel? Also, how can a small business use digital marketing to create a marketing funnel that is affordable and effective? Here are a few of the strategies we here at DWD use to create a marketing funnel that puts our clients’ marketing dollars to good use.
Marketing Funnel Strategy 1: Focus on the target audience.
Here we stand in a world where newspaper marketing is expensive and unmeasurable, where people are cutting the cord on cable and listening to podcasts more than they are to the radio. It’s easy to spend hundreds, if not thousands, of dollars a month on marketing materials that don’t cut it anymore. While you’re advertising your locally created product in the newspaper, Amazon is helping your competitor ship their similar product directly to their customer.
As Ken Eitel says, “It’s been my experience you have to know how your audience (customer) is receiving their information and change how you reach your target market, even though you personally don’t care for the media. You also have to be willing to abandon or reduce expenditure on methods that are not effective.”
Essentially, small businesses who wish to compete must start thinking less about throwing money at random advertising strategies and more about whom they want to reach with their marketing campaigns. Then they need to intentionally guide those individuals through the marketing funnel until they reach the point of converting those people into customers.
Take retargeting, for example. This digital marketing strategy involves showing a specific advertisement to a user who has viewed that product on your website. This kind of targeted marketing encourages people to remember to check out with the products that interest them. Moreover, it does so by using the customer’s preferences to communicate with them.
Similarly, every digital marketer who is worth their salt will first start by learning about their target customer, including personal details (age, gender, location, income, interests, etc.) to understand how their message needs to speak to their target customer.
So what is a target audience?
Simply put, a target audience is a group of similar individuals who are likely to be interested in your products or services for one reason or another. For example, an upscale yacht club might wish to target middle-aged white-collar men who make an income of more than $200,000 a year, since that is one group of people most likely to have the interest in a yacht club and the financial means to join it.
A business may also have multiple target audiences they wish to reach. For example, the yacht club might also cater to wealthy women, young trust fund heirs or successful entrepreneurs. Each of these groups will require slightly different marketing strategies, and understanding who these audiences are and what strategies will work best for them will allow a company to deploy their marketing dollars to significant effect.
How can you identify a target audience?
Naturally, therefore, the first step in building a digital marketing funnel is to identify who these target audiences are. Moreover, they might not be as apparent as you think. For example, you might assume that your used children’s clothing store will cater to budget-conscious mothers between 20 and 35 years of age. However, you might also find that it caters to older women on fixed incomes who are buying for their grandchildren.
To help you pinpoint with accuracy the target audiences that are right for your business, you should consider taking the following steps:
Find out who your current customers are.
The people who are currently doing business with you, particularly repeat customers, will give you a good picture of who you should be targeting. There are two ways to find out who these customers are. First, analyze any data you already have on them.
Second, spend time getting to know your customers. You can, for example, give customers surveys to collect information about them. You can mingle in your store (if you have a brick and mortar location) to speak to them directly. You can ask them to answer a few questions at the end of phone calls.
Once you have this information, you can use it to develop a picture of who is currently buying from you. Analyze data such as age, income level, preferences, profession, and even the reasons that they buy from your company. In the end, you should know who is buying from you and why, and you should be able to identify at least one or two target audiences for your business.
By the way, digital marketing techniques can help you collect the information you need to understand who your current customers are and therefore who at least some of your target audiences should be. For example, Google Analytics is a useful way to collect certain types of information about your website visitors, such as where they are coming from and even certain types of demographic information about them.
Find out who your competitors are targeting.
Of course, you have to remember that your current customers may not represent everybody you should be targeting with your marketing funnel. There may be groups of people you haven’t thought about yet who would be interested in the products and services you sell.
To that end, you may benefit from finding out whom your competitors are targeting. For example, you may find that many of the customers at your clothing store are those young, cash-strapped mothers. However, you may see that your competitor in the next town overruns a weekly special targeted at grandparents, single fathers, or even older kids shopping for themselves. Are any of those audiences also a good fit for your business? If so, you may want to add them to your target audience list.
There are many ways to identify whom your competitors consider their target audiences. One is to look at their brick and mortar stores to find out what kind of sales they run, advertising they put up, and people who visit their store. You can also check out their websites and social media sites to get an idea of whom they feel it is important to reach.
Because every company is different, your business may not automatically need to target all of the people that your competitor does. For example, maybe the competitor targets older children who are buying for themselves, but your store only sells clothing for kids under 10. Clearly, older children will not make a good target audience for your business. Instead, find out whom your competitors want to reach, and then decide if you’re going to reach those people too.
Identify the benefits your products and services offer and the pain points they address.
When you are trying to identify your target audiences, you should examine the benefits your business offers, or the pain points that your products and services address for customers.
For example, if you run a used kids clothing store, one of the pain points you may address is the need for inexpensive clothing. From there, you can figure out who might be experiencing the pain of needing affordable clothing. Then you’ve got a picture of one of your target audiences.
Whoever you find who benefits from the products and services you offer, whoever is experiencing the pain that your business can relieve, will make a potentially excellent target for your marketing funnel.
Build buyer personas for your target audiences.
With the information you collect about your target audiences, you should, as the last step, build what is called buyer personas. These are detailed descriptions of representative individuals for each audience. These personas should clearly outline who the person is, what their interests are, and why they are motivated to buy from your company.
For example, a used kids’ clothing store might create a buying persona of the following: A 25-year-old woman, probably a stay at home mother, with an annual income of less than $40,000 a year. She has two children under the age of 10 and little time to shop. She is looking for a place that is easy to get to, close to home, and reasonably priced.
You can also build what are called negative personas. These buyer personas detail the people who do not make good target audiences for your marketing efforts. For example, for your used clothing store, you might choose to exclude specific audiences from your marketing efforts because they make so much money that they are not likely to be buying low-cost clothing. These personas can be helpful because they remind you to avoid digital marketing efforts that reach people who likely will not buy from your store.
Understanding your target audience is vital for a variety of reasons, but primarily because that knowledge helps you know how to lay out your customer’s journey from the time you first introduce your brand to them to the point at which they purchase your product or service. Once you know whom to reach, you can figure out which strategies will most appeal to them. Also, that can improve your marketing funnel, and your digital marketing efforts, exponentially.