How to use a digital marketing funnel to maximize profits

Key takeaways

• A digital marketing funnel maps a customer’s journey from awareness to purchase
• Each stage of the conversion funnel needs a specific approach and a different type of content to be effective
• By understanding your digital marketing funnel, you can maximize conversion with your marketing budget

As a small business owner, you want to make every cent spent on your marketing campaign count. That means investing wisely to convert as many customer leads into buyers as possible.

If you understand your digital marketing funnel and tailor your approach at each stage, you’ll likely see an excellent return on your marketing investment. As a result, you’ll waste less time, energy, and money on unqualified leads that don’t result in sales.

Learn what a digital marketing funnel is and why you need one. Then make a plan for the different stages of the funnel so you can effectively convert customers.

What is a digital marketing sales funnel?

A digital marketing funnel maps the entire buying journey, from when a potential customer first finds out about your brand to when they buy a product and beyond.

Marketing funnels were originally developed to help sales teams understand a buyer’s journey through the sales process. They allowed salespeople to provide the right support at the right time to increase their chances of making a sale.

The concept has since been adapted to apply to online marketing and communication strategies in general. The goal is to focus your marketing efforts so you can make the most of your website traffic and convert as many potential customers into sales as possible.

How a digital marketing funnel operates

Understanding your digital marketing funnel helps you optimize marketing efforts and increase your conversion rate.

Before a customer buys from you, they first need to find you. Then they’ll likely compare what you’re selling with what’s offered from other providers before finally deciding to buy—hopefully from you.

Throughout the process, you have opportunities to either gain credibility and trust or frustrate your potential customer. The key is knowing what your potential customers are looking for at the different stages of their customer journey. Then you can strategically plan your marketing tactics at each level of the conversion funnel to deliver the right ads, helpful content, and gentle nudges to move them to the next stage.

Preparing to create your digital marketing funnel

Before you start exploring what your customer journey looks like, you need to understand your target audience.

One of the best ways to do this is to create customer personas based on the different types of people who might buy from you. Create categories that make sense for your business based on key demographics. For example, some demographics that might be helpful to know about your customers include:

• Gender
• Age group
• Marital status
• Level of education
• Income
• Job title
• Hobbies and/or goals
• Social media platforms they use

Let’s say you sell glittery cosmetic products. In this case, your primary buyer persona might be a young, single woman who goes to cocktail lounges and posts photos online of her nights out. On the other hand, if you sell high-end hardware tools, you’re more likely to have a persona of an older man with some disposable income who watches online DIY videos—and then a second customer persona of the professional builder who works with tools all day. 

These personas help you profile who your potential customers might be, what’s important to them, and what their pain points are. Understanding this gives you insight into the journey these customers may take to find you and how they might respond at each step of the digital marketing funnel.

The 6 stages of a digital marketing funnel

The main stages from top to bottom of the funnel are:

1. Exposure. Make sure your brand is visible and that people can easily find you.
2. Discovery. Once they’ve found your brand, inform potential customers about your products and services.
3. Consideration. Help them compare your products with others. Highlight the advantages of your products or services. 
4. Conversion. Make it easy for them to decide to buy from you. 
5. Post-sale customer relationship. Provide an excellent experience throughout the fulfillment process, right up to delivery.
6. Retention. Encourage them to come back and buy from you again.

Sometimes the funnel stages are shown as a loop because loyal customers feed back into the process—that is, they come back to your business without you having to earn their trust all over again. 

Let’s look at these stages in more detail and clarify which approaches work best for each step. Content should be tailored for each: top of the funnel, middle of the funnel, and bottom of the funnel.

What’s happening at every stage of the funnel

The customer journey starts before a potential customer knows anything about your business. Your first job is to help them find you. Once they do, their experience with your brand matters, right from the first point of contact.

1. Exposure

The awareness stage of the digital marketing funnel is when lead generation happens. Your goal is to use brand awareness to reach as many potential customers as possible. Specifically, you want to show prospective customers how your product or service helps solve their problems or pain points.

Digital advertising is one way to make your business stand out among online search results. Depending on which social media platforms your prospective customers use, you could set up pay-per-click (PPC) on LinkedIn, YouTube, Twitter, or Facebook ads. You may need to try a few platforms and keep an eye on your metrics to see what works best for your business. When you claim or add your business to Yelp, you can also start investing in Yelp Ads. This helps your business gain exposure by putting your listing in a number of key places on the site and app, including above relevant search results and on competitors’ pages.

Alternatively, you can rely on inbound marketing (attracting new customers through the content you produce). Content marketing for small businesses often looks like:

• Sending press releases to local media
• Posting blogs or videos on your website
• Setting up an email marketing campaign
• Running a social media marketing campaign
• Organizing paid partnerships with influencers who will recommend your product
• Offering free webinars that show potential customers how you can solve their pain points 
• Implementing a referral program to encourage word-of-mouth marketing from your current customers

You should also have a good understanding of search engine optimization (SEO) so your content has a greater chance of landing higher on search engine result pages (SERPs). You can do this yourself through your own keyword strategy, or consider hiring a content marketing or digital marketing agency to do it for you.

2. Discovery 

Having noticed your brand, prospective customers might now engage with you on social media and click through to the landing page of your website. This is when the customer experience really starts coming into play.

They’ll want to know who you are and what you offer. Your website should be well-designed and offer credible information to reassure potential leads about your business. Make sure your menus, product pages, and search function are user-friendly so potential customers can easily find what they’re looking for.

Your customer service contact details should be prominently displayed so they can reach out with any questions they may have. If your website is difficult to navigate or loads slowly, potential customers are more likely to move on to a competitor.

It’s also important to collect prospective customers’ contact information on your website so you can stay in touch through future email marketing campaigns. A pop-up invitation to join your email list or a form on your homepage, contact page, or page footers can make it easy for visitors to submit their information.

To encourage them, consider offering a small incentive in exchange for their email address, like a discount on their first purchase or a small freebie.

3. Consideration 

At this stage of the digital marketing funnel, your potential customer has learned a bit about you and knows you offer a product or service they’re interested in. Now they’ll start comparing your business with your competitors.

To help them choose you, clarify your unique selling point (USP), or what makes you stand out from other providers. Also, share comprehensive product or service descriptions so they know exactly what they’re getting. If you have any special offers available, make sure they’re highly visible.

Consider offering a blog, infographics, or webinars that explain what you do or demonstrate how to use your products so potential customers can see you as a reliable expert who offers quality goods or services.

4. Conversion 

Now your prospective customer is on the verge of making a decision. Help them along by providing case studies, testimonials, and reviews about your brand, products, or services. You can quote your Yelp reviews on your website or request a “Find us on Yelp” sticker for your window display to direct people to the glowing reviews posted by your current customers. 

To further help prospective customers make their decision, offer online support in the form of a frequently asked questions (FAQ) section or a live chat function.

At this point in the digital marketing funnel, the potential customer is ready to buy. Your check-out process should be intuitive, user-friendly, and provide a sense of safety so they have no hesitation about giving you their credit card details.

5. Post-sale customer relationship 

After your new customer has placed their order or scheduled their service, they’re eagerly waiting for their product to arrive or their appointment time to come. Your job is to reassure them that you’re here throughout the fulfillment process.

Make sure you’ve sent a confirmation email thanking them and letting them know what the process is and what their expectations should be. Update them along the way if you can. If you’re shipping a physical product, let them know when it has been packed and dispatched. If it’s arriving by a delivery service, send them a tracking number or an online tracking link. 

If they’ve ordered a service, you can also send them a confirmation email, along with an explanation of any next steps they need to take to prepare. In every email, include contact details for your customer service team in case your new customer has any questions.

6. Retention 

If everything went smoothly in your digital marketing funnel and your new customer’s experience went smoothly and swiftly, you probably just earned a happy repeat customer.

Encourage new customers to buy from you again by staying in touch through ongoing email marketing. Send personalized newsletters to let them know about your latest products, tips, and tricks. Invite them to join your loyalty program. Make the offer tempting by offering loyalty points, special offers, free shipping, or a small giveaway if they sign up for your program.

Keep nurturing those repeat customers and they’ll be primed to become brand advocates for you, referring your business to their friends and colleagues. Encourage that advocacy with a referral program that rewards them with things like points or discounts.

Work your digital marketing funnel to build your business

Your digital marketing funnel maps your customers’ journey from the time they become aware of your brand to when they become regular customers. Understanding your marketing funnel helps focus your ad spends, informs your digital marketing strategy, and helps increase your conversion rate.

As the customer enters each stage of the digital marketing funnel, you should provide them with the right content and support to encourage them to move to the next stage. Use advertising and content marketing to attract them, make sure they can find all the information they need on your website—including helpful product details and contact information—and provide excellent customer service through the entire journey.

With this approach, you’ll be able to convert as many prospective customers as possible, while minimizing your costs and increasing your profits. To stay money-conscious, discover four steps to create a marketing budget.