Starting and maintaining a successful small business takes time, energy and strategic planning. It also requires an understanding of how customers move through the buying process. This is where funnels in marketing come in. But what is a funnel in marketing? A marketing funnel—also known as a sales funnel, purchase funnel or conversion funnel—helps guide potential customers from the awareness to purchase stage, allowing businesses to refine their strategies, target audiences and drive sales. Understanding funnels in marketing is essential because it provides a clear path for engaging leads and turning prospective buyers into loyal customers.
By mastering the marketing funnel, businesses can optimize every touchpoint—from brand awareness to customer retention. So let’s break down the marketing funnel and explore how it can enhance your customer journey and grow your business.
- A marketing funnel is a framework that outlines the stages customers go through, from brand awareness to purchase.
- Funnels in marketing are important because they help businesses understand customer behavior, improve targeting and increase conversion rates.
- The six main stages of a traditional marketing funnel are Awareness, Interest, Consideration, Intent, Evaluation and Purchase.
- Alternative marketing funnels include the AIDA model (Awareness, Interest, Desire, Action) and TOFU-MOFU-BOFU (Top, Middle, Bottom of Funnel), catering to more modern marketing strategies.
- The conversion funnel from the customer perspective shifts focus to repeat purchases, loyalty, referrals and advocacy, encouraging long-term engagement beyond a single transaction.
What is a marketing funnel?
In short, the marketing funnel outlines the steps consumers take from leads to loyal customers. It’s often used by sales teams and is a key part of any marketing strategy. Funnels in marketing help businesses attract wide audiences and then narrow them down to core target customers.
The funnel marketing concept was developed by American Philosopher John Dewey in 1910 as a visual representation of the steps a customer goes through before buying a product. The six marketing funnel stages look at the process before, during and after making a purchase, helping businesses and marketers make products more appealing to the customer throughout this journey.
Source: Results of market research by MS Templates via 99designs by Vista
The marketing funnel begins with all the people with a problem that can be solved by the product and narrows as the customer researches, evaluates and eventually decides which product or business matches their needs.
Why are marketing funnels important?
Funnels in marketing play a crucial role in shaping a business’s success. Here’s why you should add building a marketing funnel to your small business marketing checklist:
- Structured customer journey: Funnels help businesses map out the different stages influencing customer decisions.
- Efficient resource allocation: Understanding where leads drop off allows businesses to adjust strategies and invest marketing resources wisely.
- Increased engagement: Funnels in marketing ensure that customers receive valuable content at the right stage, increasing engagement.
- Improved conversion rates: A well-optimized funnel helps convert more prospects into paying customers by providing relevant information at each stage.
- Scalability: Funnels help to replicate and scale successful marketing efforts as businesses grow.
The stages of the marketing funnel
Although there isn’t a one-size-fits-all approach to marketing, the marketing funnel has remained practically the same for over a century. So, what are the stages of the marketing funnel?
1. Awareness stage
The point where a customer first discovers or becomes aware of your brand is where the lead generation begins. Awareness is one of the most important stages as it’s when potential buyers decide whether or not they’re aligned with your brand. This is a good point to gather customers’ contact information like email addresses, social follow or other details to help maintain communication.
Marketing strategies for the awareness stage: SEO-optimized blog posts, digital advertising like paid social ads and influencer collaborations can help introduce your brand to your target market.
2. Interest stage
Once they’re aware of your brand, warmer leads will begin to show an active interest in what you do and what your brand values are. The interest stage is where you start to build more meaningful connections.
Marketing strategies for the interest stage: Send prospective customers relevant marketing emails and engaging branded content that appeals to what you already know about them, helping sustain interest.
Targeted social media content at the interest stage of the marketing funnel
3. Consideration stage
Now your target customer is interested in what you have to offer, they will begin to consider whether your product addresses their specific needs and pain points, ultimately considering whether to make a purchase.
Offer free samples at the consideration stage
Marketing strategies for the consideration stage: Free trials, product comparisons and customer testimonials establish trust, highlight your value and guide customers towards your product or service over the competition.
4. Intent stage
If they’ve added an item to the cart, completed a free trial or engaged with your product directly but not yet clicked ‘Buy,’ then you know the intent is there. Intent to buy doesn’t guarantee a sale, however, so this stage of the funnel is your business’ chance to really win the customer over.
Take this as your opportunity to prove your product or service is the best option. Why is it better than your competitors’? How can you prove that yours is the one they need?
Offer limited-time discounts at the intent stage
Effective marketing strategies for the intent stage: Share testimonials, follow up with automated abandoned cart emails or target high-intent leads with offers that could convert them into buyers, like limited-time discounts and live chat support.
5. Evaluation stage
You’ve acted on your potential buyer’s intent and now they’re evaluating whether or not to make a purchase. The key here is to keep positioning your brand as the best option without scaring them off. To ace this step, your marketing and sales team should work closely together to develop a process that secures the sale from a nurtured lead.
Effective marketing strategies for the evaluation stage: User-generated content, personalized demos and money-back guarantees reinforce confidence.
6. Purchase stage
As the name suggests, once they’ve reached the purchase stage, you’ve secured a customer.
Customers at the purchase stage
Once a customer has made a purchase, the process is handed over from the marketing team to the sales or customer support team. But the process doesn’t stop here—customer retention efforts are key to turning buyers into repeat customers by enticing them back and establishing their loyalty.
Marketing strategies at the purchase stage: Post-purchase email sequences, loyalty programs and referral incentives build customer loyalty, encouraging repeat purchases and word-of-mouth marketing.
B2B vs B2C marketing funnels
Business-to-business (B2B) and business-to-customer (B2C) are inherently different models in the way they market their products and services. While B2B brands will often have a larger and more connected group to sell to, B2C audiences are more likely to make purchasing decisions alone or based on a recommendation.
Source: Provide a more targeted visitor experience by Vadim Drut via Dribble
To help different kinds of brands adapt the marketing funnel to their audiences, marketing teams should be aware that…
B2C customers:
- Are less likely to have direct interaction with your brand
- Can be reached using wider-reaching methods like automated email marketing
B2B customers:
- Have more people involved in the decision-making process, including their own sales team
- B2B customers value recommendations made by other businesses
Learn how to build a retail marketing strategy for your business in our guide.
Non-linear marketing funnels
Some marketing experts and analysts now believe that the purchasing process is no longer linear and, therefore, the marketing funnel no longer applies. Increased access and exposure to information now means that leads can enter the funnel at any stage and are more likely to carry out their own research rather than being swayed by traditional or digital marketing efforts.
Source: Alternative marketing funnel by Joshuah Xaiver Miranda via Dribbble
A CEB report suggests that B2B customers, in particular, are likely to skip 57% of the marketing funnel before they speak with a sales rep. Alternative non-linear funnel models, like McKinsey’s consumer decision journey, which is represented as a circle in which customers touch into the buying process at different points, explore new ways of thinking about funnels in marketing.
AIDA funnel marketing model
The AIDA model takes the new digital landscape into account and is often used by brands that use predominantly digital marketing tactics, with social media as their main marketing channel. Awareness, Interest, Desire and Action are the four main stages in the customer journey. This model identifies the customer and the brand as no longer the only two elements in the relationship—all four steps can be influenced by third parties and existing customers, thanks to social media.
TOFU-MOFU-BOFU funnel marketing model
The top of the funnel, middle of the funnel and bottom of the funnel in this model all have different jobs: to generate leads, prospects and sales. Rather than focusing on specific cognitive steps, this alternative marketing funnel takes a broader approach by narrowing down the user journey model to the Awareness, Consideration and Decision stages.
The traditional marketing funnel is still an effective way to break down the different stages of the buyer journey. However, If you know that your target audience is likely to interact with your sales process in a non-linear way, explore these contemporary alternatives, developed to cater to digital audiences.
The marketing funnel from the customer’s perspective
To truly understand your customer’s journey through the purchase funnel, many brands choose to ‘flip the funnel’ (experience it from the customer’s point of view) as they develop their marketing strategy. But it’s not as simple as just flipping the six stages—a person doesn’t consider themselves as a lead, after all. Instead, flip the funnel by understanding these four behaviors from the customer’s perspective:
1. Repeat
After a customer makes a purchase, the next step is encouraging them to return. Consider what steps will nurture their next purchase—likely to be similar to your bottom-of-the-funnel activities from the lead generation process.
2. Loyalty
Loyal customers don’t just make repeat purchases, they identify with your brand and its values. These customers feel a connection with what you offer and are more likely to actively engage with your marketing and choose your business over the competition.
Loyal customers with branded merch
3. Referral
The next step is referral—where an existing customer who already loves what you do recommends your product or service to prospective customers through word of mouth or by leaving positive reviews online.
4. Advocacy
Brand advocates are highly valuable because potential leads are more likely to trust customers who have had a good experience with your brand and product. Encourage loyal customers and influencers to advocate for your brand through discounts or free items in exchange for product reviews, and paid promotions.
Source: Build customer loyalty as customers move through your funnel by Oscar Anindita via Dribble
Keeping up conversions
The main goal of your marketing funnel is to secure sales and then convert those buyers into repeat or loyal customers. With digital marketing strategies more impactful than ever, sales and marketing teams need to work closely together on the online purchasing process via your website, social media platforms and email marketing.
Funnels marketing FAQs
Why are marketing funnels important for small businesses?
Funnels in marketing help small businesses attract, nurture and convert potential customers. By mapping out each stage—from awareness to purchase—brands can tailor messaging, improve engagement and reduce wasted marketing spend. The funnel marketing model ensures businesses reach the right people with the right content at the right time, leading to higher conversions and lasting customer loyalty.
What tools can I use to optimize my marketing funnel?
For lead generation, search engine optimization tools like SEMrush or Ahrefs boost visibility, while social media ads help attract potential customers. Email platforms like Mailchimp and CRM systems like HubSpot nurture leads effectively, Google Analytics and heatmaps track user behavior and A/B testing tools refine conversions. The right mix of tools depends on your funnel model and marketing goals.
How can I measure the success of my marketing funnel?
To track effectiveness, monitor key performance indicators (KPIs) at each stage of the marketing funnel. For awareness, look at website traffic and social media engagement, for the interest stage, study email open and click rates, lead conversion rates for consideration and cart abandonment rates for the intent stage. Ultimately, sales conversions, customer retention and lifetime value (LTV) tell you how well your funnel drives growth.
