Should Your eCommerce Website Take a Funnel Approach to Marketing?

Do marketing funnels even matter in eCommerce today?

The original version of the marketing funnel was developed over 100 years ago. Now, this isn’t going to be a history lesson on advertising tactics from the Wild West, but more of a dive into how the mindset of the consumer dictates marketing strategy. Although the technology and methods we use to advertise in 2021 are much more advanced than a newspaper or leaflet, the buyer’s psychology is relatively unchanged. 

Rather than just throwing ad dollars into one single campaign, structuring your strategy around a marketing funnel will enable you to spend more efficiently and increase the impact of your marketing efforts overall.

What exactly is a marketing funnel?

First, things first: what do we mean when we talk about a marketing funnel? You may be familiar with the AIDA model–awareness, interest, desire, action– which is the original marketing funnel developed by ad agency executive Elias St. Elmo Lewis in 1898:

Essentially, this structure means that a lot of people will see your ad in the storefront window, but fewer will actually be interested in your product, and even fewer will truly want to buy it. The fewest even still will actually want it enough to finally commit to buying whatever it is you’re selling.

But does this structure even make sense in the complex world of online, multi-channel marketing we rely on for success in online retail?

The short answer, yes. 

For the long answer, we’ll need to dive into the mind of the consumer. And if you’ve ever bought anything in your life–that’s you too!

The Buyer’s Journey

Our overall goals as marketers haven’t changed too much in the past century–we are still trying to get people interested in what we’re selling, enough so that they actually buy it. However, the buyer’s journey has become much more of a maze.

A recent study conducted by Google counted that it took 375 touchpoints for someone to buy a single pair of headphones. On the other hand, 44% of Americans have also made an impulse purchase in the past three months. 

So, whether you need to see 82 remarketing ads that follow you around the internet or just one promotional email sent at the perfect time before you buy, the thought process is still the same:

The new and improved marketing funnel

Building off this buyer journey model, the more modern update to the AIDA model is the following:

Step 1: Inspire 

The first step is to inspire cold audiences. These are people who have never heard of your brand or products, so you need to get them to reevaluate their current choices. Maybe they’re using a competitor or maybe they didn’t even realize they have a problem that your product solves. Whatever the case may be, you need to get them to visualize how their lives will be improved by your product.

Step 2: Educate

Next, once you’ve already “warmed” up the audience, you need to educate them a bit more. This is usually done with remarketing lists–lists of people who’ve already interacted with your ads or site– and only showing this class of ads to them. Here, you want to get potential customers to see why you’re the best option.

While quick and to-the-point ads are ideal for the top of the funnel, for this middle of funnel stage, you can experiment with more long-form content. Using longer explainer videos, especially UGC (user-generated content), to hammer home the idea of “why you” to your audience can be very effective here.

Step 3: Convince

This final stage is where you need to convert your “hot audience” into paying customers. They’ve likely seen a few of your ads at this point, and maybe they’ve already added something to their cart, but they have yet to check out. You know these people are interested since they’ve indicated that by the amount of time they’ve spent interacting with your ads and website. Now you just have to get them to complete their purchase.

The bottom of the funnel is where you often see scarcity or urgency being used as a tactic. While it can definitely be overdone–we’re not saying use a huge red flashing “Sale Today Only” ad here–using language like “limited time offer” or “while supplies last” tend to be effective.

A note on setting up campaigns and budgeting

You may look at these stages and connect them to the campaign goals you see on Facebook or other social media platforms–and you’d definitely be correct. Oftentimes, we see online retailers identify their ultimate goal as sales–I mean, that’s what eCommerce is at the end of the day–so they launch their fresh campaign and set the goal to “conversions.”

Well, that’s probably going to just end up burning through their budget quickly with little to show for it.

If you’re launching a completely new campaign targeting fresh prospects with a conversion campaign, you’re aiming for a bottom of funnel result with a top of funnel audience. This is a common mistake we see when the funnel model isn’t correctly implemented.

Conversion campaigns are really pricey, so you want to be sure these precious dollars are targeted at the people most likely to convert.

A properly structured funnel campaign may look something like this:

1. A short 15-second video campaign introducing the brand and products and highlighting one main feature to a broad audience.
2. A longer video of 45 seconds targeting people who had seen the entire first video, clicked on the link, or visited the website in the past 30 days.
3. A carousel ad retargeting people who had viewed the longer video in its entirety with a FALL2021 discount code.

In this example, we might be paying for impressions on the top of funnel campaign at $0.10 a view, $1.00 per click on the middle of funnel video, and $10.00 per click on bottom of funnel conversion campaign. 

Since the bottom of funnel targets are a very small group that is likely to convert, that cost is likely well worth it. However, if we were targeting the original top of funnel broad audience at $10 a click, we’d spend the budget very quickly and not have many sales at the end to justify the spend.

“Invest wisely in paid media right through the funnel and closely align advertising with other internal marketing and sales activities,” Notes Optily CEO, Brendan Hughes. “It is this holistic approach that is behind many of the most successful eCommerce growth stories we hear about today.”

It’s important to ensure that you’re feeding the funnel enough at the top so that you generate enough high-quality leads for the bottom of funnel campaigns. Research shows that investing 60% of your budget in brand building and 40% in sales activation is generally the optimal split. This emphasizes the need to invest more in broad, upper funnel initiatives that can sometimes be overlooked when focusing only on immediate and short-term results.

Interested in more in-depth funnel strategies?

Brendan Hughes has written an in-depth guidebook for eCommerce marketers on how to utilize the funnel strategy for optimal growth. Accelerate eCommerce Growth: A Proven Framework to Scaling Your eCommerce Business with Digital Advertising is available on Kindle and paperback on Amazon, or as a free eBook from the Optily website.