Digital Marketing Explainer, pt. 1: Conversion Funnels

Organizations that want to advertise themselves online are spoiled for choice. Whatever your target demographic or product offering, you can almost invariably find a service or a site tailored to your needs. Social media allows you to connect directly with your customers, search engine marketing lets you get to people at the moment they’re most interested, and it’s getting easier every day to create high quality websites on the fly. 

It’s great to have options, but it’s also an immense challenge. Marketing and advertising are most effective with multiple touch points, so you need to weave multiple services together to create the full experience for your customers. The more services you bring on and start to maintain, the more complex your overall system becomes; the more complex your overall system becomes, the more likely it is to break down somewhere along the way. In marketing and advertising online, some common breakdowns are lost data, decreased visibility of your message and content, and lost productivity. 

Many of the clients we work with are challenged by problems like these. In some cases, it’s just a matter of configuration and knowing how to get two systems talking to one another; in others, it requires custom code and a new piece of infrastructure. But before we get to any of the fixes to these common breakdowns, we first need to understand the problem, and for us to understand the problem we need to have a theory of how things are supposed to work.

At Blue Heron, our theory of how digital marketing is supposed to work is the conversion funnel. 

Before Conversion, There Was AIDA

The concepts underlying conversion funnels are tried and tested – they were invented by E. St. Elmo Lewis, an early advocate for the power of advertising, as early as 1898. His conceptual model has four stages (Awareness, Interest, Desire, and Action) and is known in advertising as the AIDA model. These steps still hold in a conversion funnel model, so we’ll discuss them briefly:

• Awareness is where prospects initially become aware of your organization
• The Interest stage comes right after Awareness. Assuming your advertising methodology is successful, prospects will then begin to research more about you to figure out if what you’re offering is right for them. 
• Desire is the third stage, and prospects reach this stage once they’ve decided they want to make a decision to buy from you. 
• Action is the final step in this process, where the prospect converts and takes the action you desire. This stage is where you receive something of value from your prospect in exchange for the services you offer, which is the most crucial step for your business.

But why a funnel?

So these steps clearly have an order in which they’re supposed to happen. You have to be aware of a product before you can be interested in it; you have to be interested in a product before you desire it; you have to desire a product before you can act to purchase it. AIDA is referred to as a hierarchical model, because each step follows from the one before in a way that is clear, obvious, and well-described. 

Once we apply these steps to real-world marketing, the funnel effect occurs naturally. Your advertising efforts will reach a broad cross-section of prospects – only some of those are going to advance to the next step of Interest, and in turn not everyone that’s interested will eventually desire your product. Ultimately, the number of people who purchase – who take an Action – is going to be WAY smaller than the number of people that you try and sell your services to. At every step, you will lose the attention, interest, or desire of your prospects, and this loss is what defines the concept of the funnel. You’re going to get out of it way fewer people than you put into it. 

This is the model that’s widely broadcasted and shared, but it’s also a model that’s started to change. Critics of AIDA have widely noted that it’s a hierarchical model – each step is supposed to proceed in order, one after another. But in reality, there may be some back-and-forth or skipping of steps, and the fact that you’ve made one sale to a person doesn’t mean that they drop out of your funnel entirely. In online marketing especially, getting all the way through AIDA moves you into another process where you’re either targeted for additional marketing funnels or encouraged to advocate on behalf of the business on social media. 

To represent these patterns, digital marketers created the modern conversion funnel. In addition to the 4 steps of AIDA, it includes the following steps:

1. Planning. Successful marketing campaigns aren’t simple, particularly not online – you have to plan your content and your copy, make sure the places you’re advertising are going to reach your target market, and create the resources that are going to support you through every step of the campaign. This is particularly true in our modern era, where marketing is perpetual – a well-planned conversion funnel will serve you for years, long beyond the lifespan of the campaign it was initially engineered for. 
2. Loyalty. Once you’ve successfully moved a prospect through the Action step, you want them to come back to you again and again for the same service (ideally in increasing amounts). Digital marketing provides you the ability to do this by staying in touch with your customers via email or social media, or offering promotions to prospects that you think will spend more on you. 
3. Advocacy. Your most loyal prospects will do more than just buy from you repeatedly – they’ll actually share your products and services with others, incentivizing others to buy. You want to move as many customers as possible to this point, as it’s free advertising for you and potentially more customers from amongst the prospect’s contacts. Social media shares are the best example of this in digital marketing, but email forwards, peer-to-peer fundraising, and other prospect-driven actions also count. 

We should note that this isn’t the only conversion funnel model out there – in fact, it’s one of hundreds, because nearly every digital marketing firm we’ve ever run across has their own version. This is because understanding the funnel is absolutely fundamental to the process – if you’re going to work on digital marketing, you absolutely have to understand the idea of the funnel. 

Conclusion

In this blog post, we talked a little bit about how we understand the process of digital marketing. Our understanding is centered on a theoretical model called the conversion funnel – hopefully now yours is too. By understanding the steps in the customer’s experience, you can better attack the specific steps you need to take to entice them to do business with you. 

This post is the first one in a series we’ll be returning to from time-to-time. Links to further posts will be added as they’re written – feel free to bookmark this page, or follow the blog, to check back for updates. Also, if you have any questions about the AIDA model or other digital marketing questions, feel free to drop me a line – you can reach me at owen@blueherondigital.com, or follow me on twitter @DigitalHeron.