Mark Ritson: 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.

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Advertising Age published a fantastically unhelpful article last week. In it, the chief marketing officer at Publishers Clearing House, Jason John, recounts his recent purchase of a coffee maker.

John first describes realising that the weird noises and less-than-perfect coffee emanating from his coffee maker mean he might need a replacement. Next, he searches online for ‘best coffee makers’ and, as a result, on the way home that evening is greeted by targeted mobile ads for coffee makers during his commute. That weekend he heads into store to check out the options in person but is deluged with online coupons sent to his phone offering various deals. He decides on a brand and opts to order the machine online for a better price. That evening, once home, he places his order on his laptop.

After recounting this story John goes on to conclude: “People say the sales funnel is changing – that, in today’s digital world, the way customers buy is no longer a simple path from awareness to prospect to sale. That’s just not true. The sales funnel isn’t changing – it’s completely and utterly dead. It’s been brutally turned upside down, inside out, with little left to identify it as the clean, straightforward process it once was. Today’s shopper jumps in and out of channels, views alternatives to purchases, and searches for better deals – all at the tap of a screen, the click of a button, and oftentimes while standing right in front of the item she’s trying to buy.”

The sales funnel has been a cornerstone of marketing strategy for over a century. It was invented by E St Elmo Lewis in 1898 and is widely regarded as the first formal theory of marketing. It evolved throughout the 20th century, becoming better known as the ‘hierarchy of effect’, the basis for the Dagmar (defining advertising goals for measured advertising results) models of advertising planning and as a major structuring tool for large consulting firms. It’s rare to encounter a major McKinsey engagement that does not, somewhere near its heart, contain a purchase funnel of one sort or another.

Very simply, the sales funnel represents the yellow brick road of marketing. Having identified a target segment, the funnel charts the various steps in the buying journey and then populates the steps with the proportion of that segment at each stage in the process. With this analysis complete a marketer can use the funnel to decide where to focus their efforts, what the brand objectives should be, what tactical tools to invest in and what investment and return are expected. I am on about my 300th sales funnel, having built them for the last 15 years for a variety of clients. Each funnel is different depending on the product and, crucially, the segment being targeted.

I have grown used to, on an almost daily basis, encountering marketers and consultants claiming that the whole world of marketing has been changed by the new digital era. But it’s rare for an article disclaiming a particular part of marketing theory to actually disprove its own thesis in its opening paragraph.

Re-reading Mr John’s coffeemaker odyssey it is quite clear that his purchase is structured by a very simple set of steps. First came his awareness that he had the need for a new product. Next came the information search stage. After this, he formulated his preference based on product, price and some promotional offers. At the end of the preference stage he went home and made the purchase. The only step missing is his post-purchase reactions to his new machine which, alas, he does not include in his account.

The error that Mr John makes is looking at the tactical resources that he uses to traverse the various steps in the buying process, rather than the journey itself. Clearly today’s consumer is availed with a whole set of resources and influences unimaginable a decade ago. But that is not the point of the sales funnel, which charts the consumer journey, not the tactical attempts of brands to influence it.

Can I again remind the reader of the difference between strategy, in this case working out what the stages are and which one to focus on in order to increase sales, and tactics, the various actions I will invest in to execute the strategy. One of the great problems of the new marketing world we live in is that all these dreary marketers who feel it necessary to prefix their job titles with the D-word simply do not understand the difference between strategy and tactics.

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.

Enjoy your coffee.

Catch Mark at this year’s Marketing Week Live, with his talk: ‘Eight marketing concepts – four stupid and four stupendous

Topics covered included:

  • The marketing world continues to focus much of its efforts on the wrong issues while ignoring the more useful ones
  • Which concepts continue to offer value to marketers as they approach 2017?
  • Which concepts, despite the noise associated with them, are distracting marketers from their core purpose?
  • Customer Journey Mapping, Digital Marketing, CSR, Brand Tracking, Brand Purpose, Zero Base Budgeting and Virtual Reality

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Comments
  • Tom 6 Apr 2016 at 5:43 pm

    A great piece. I’m not contradicting things here, but I do think it’s worth marketing people paying close attention to the subtle ways that the sales funnel is changing. Things like Amazon Dash buttons, shoppable ads on Twitter, click to add to basket ads etc, are very niche at the moment. But it’s worth considering what aspects like this, or repeat subscription services or social commerce or Apple Pay embedded, or influencer marketing and more will mean for it. I don’t think THAT much will change and the importance of a strong brand is essential, but there will be some movements of note for us to study and prepare for. For sure the funnel is getting condensed in many cases.

  • Victoria Hamilton 7 Apr 2016 at 9:13 am

    I always find relief in your posts. As someone who came late to ‘marketing’ from a start in graphic design, I really struggled with the CIM Professional Diploma which appeared to me to contradict itself in the very ways you describe. I understood marketing to be about long term strategy and placing the customer or consumer at the heart of everything you do in order to add value – and yet all their assessments forced me to apply a preconceived tactic to a forced problem rather than allowing me to utillise the full marketing mix to resolve an identified issue. For example, I had to resolve customer churn using social media as if that was the panacea to every modern marketing conundrum. All of these digital tools and applications are great – if they’re used as a vital component of the total marketing mix that’s appropriate to your strategy.

  • Chris Green 7 Apr 2016 at 11:32 am

    One thing John did miss out and so did you Mr Ritson is the annoying programmatic ads that still insisted on sticking in his face for the 2 weeks after he bought the coffee machine…!!!!!

  • Al King 11 Apr 2016 at 11:24 am

    “………marketers ……do not understand the difference between strategy and tactics.” Yes indeed. Quite often they do not understand the difference between objectives and strategies either. So are they thick or are we failing to explain?

  • KirstyJBand 12 Apr 2016 at 7:06 pm

    Love this article Mark and fully agree. It’s not a case of the sales funnel being dead it’s simply that the tools with which to influence this journey have increased. It’s also created a case where consumers can go off on endless tangents searching and searching for options or being tempted by new ways to buy. The new challenge in sales funnel creation is on containing this distraction and making our marketing tactics/messages effective enough that our customers don’t get distracted or spend more time in the phases before purchase. Just one marketers perspective.

  • Ale Valentini 31 May 2016 at 5:09 pm

    There is no denying that the Funnel as an approach to psychologically understand how a customer can relate to a brand/product is still alive and kicking. What changed with the Digital revolution is the shape that this journey takes. Clearly, even today when a customer is starting to considering a product will not go back to the awareness stage. Once you know it exists, you know it exists. You can’t un-know it.

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