Creating a Custom Funnel

You’re a good marketer. Dedicated to good strategy. So, how do you ensure you set the right strategic objectives? You’ve guessed it (maybe from the title). It all starts with a custom purchase funnel.

You can download a copy of Creating a Custom Funnel here.

You can obsess over your sales performance chart for hundreds of hours. But whatever way you look at it, it isn’t going to tell you anything other than your relative revenues.

And being able to fix those leaks with precision. Well, a custom purchase funnel gives you a diagnostic point of view. It isn’t some fluffy, feel-good exercise in marketing theory. It’s about understanding your customer’s journey. And it’s based on data, not assumptions. Creating a custom purchase funnel is an essential contributing force for getting your strategy (and execution) right. So, you can ensure every penny you spend on marketing is focused where it will have the most impact.

The Clue is in the Name

We’ve been building funnels for over a century. Yes, the first was proposed in 1899. And there are a hundred models out there. Maybe you’ve seen it named after the acronym that captures the steps: AIDA. Maybe you know it as a sales funnel, a marketing funnel, a buying path, the hierarchy of effects, or TOFU, MOFU and BOFU. Every version has its merits. But you wouldn’t say one type of positioning fits all. So, in the same vein, there is no perfect funnel for every purchase. You can’t lift a generic example from a textbook and apply it wholesale to your business. Your funnel should be as unique as your business. That means you need to design your own. It’s custom to you. So, here’s how you do it, step by step…

Step 1: Know Your Market—All of It 

First up, you need to figure out your total potential market. This is the big picture—the whole pie. It’s the top of your funnel. It’s everyone who could possibly buy what you’re selling. This is your 100%. The total market of toothpaste would be everyone that brushes their teeth, while the total market of baby formula would be everyone who has a baby.

Step 2: Know Your Current Customer 

You already know how many customers are buying. You have the sales data. This plugs the bottom of your funnel. Now, what’s the first question that comes to mind? Well, in comparison to the total market, it’s likely a small proportion that bought your product. So, where did everybody else go? Let’s figure it out.

Step 3: Map Out the Stages That Matter

You’ve already done your market research, right? Well, here’s where you put it to use. Your qualitative research of surveys, interviews or focus groups with recent customers will identify the stages of your funnel. Remember, your funnel doesn’t need to be fancy. It just needs to reflect the specific steps your customers go through, from first learning about your product to making a purchase. And ideally, repurchasing or advocating for your brand. Keep it simple – focus on the major decision points. Your stages might go from awareness to website visit to people that a booked demo to people that sat a demo and then purchase. If you’ve got a subscription-based model, the repurchase stage might turn into renewal. It’s based on your product and your customer journey, you know best.

Here’s a generic example:

• Awareness: Who even knows you’re out there?
• Consideration: Who’s thinking about buying? Or who visited your website?
• Purchase: Who’s actually buying? Or subscribing for one year?
• Repurchase/ Advocacy: Who’s coming back for more or telling their mates?

Step 4: Fill It with Real Numbers, Not Guesswork

Now it’s time to stop fantasising and start filling your funnel with hard data. You know your market’s 100%. You know how many customers are buying. What about the in-between? Depending on your custom funnel, you’ll need to use data from your website, sales team, agencies and quant market research to identify roughly how many prospects are at each stage.

Don’t worry, it doesn’t have to be an exact science. Just use your data points to make a good estimate. Then, with the real numbers at hand, you’ll convert them to percentages based on how many people really make up your 100% total market. All you need is a trusty sample size converter. Someone must be aware of you to consider you. Someone must consider you to purchase your product. So, the previous percentage of people becomes the total number of prospects as you move down the funnel.

Step 5: Conversion Rates—The Numbers that Make the Difference

This is where the rubber hits the road. You’ve got your funnel filled in, now you’ve got to look at the conversion rates between stages. If you’re not sure what that means, well it’s what percentage of those in the stage above actually proceeded onto the stage below.

If 28% are aware of your product and 11% of those 28% consider your product, to work out your conversion, it’s 11/28 x 100 = 39%.

39% of those who were aware, considered you. Not 11%. That’s a crucial difference.

You can talk about funnels all day, but if you’re not analysing conversions, you’re missing the point. Conversion analysis shows you where your funnel is working and where it’s falling apart. But how exactly do you find out why this is happening?

Step 6: Bring in Bridge Analysis

Fancy term, simple idea. This is where you get a true sense of what’s going on. By digging deeper into why customers drop off at certain points of your funnel. If 28% of your market is aware of your product, but only 11% consider it, you need to figure out the difference between these two groups.

Maybe you’ll run focus groups with both. Or maybe you can go back to your survey responses and figure out the difference in their attitudes, demographics etc. Whatever it is, get to the bottom of it.

Once you suss it out, you’ll know how to move more people through to the next stage. Using bridge analysis will make sure your funnel isn’t just some pretty picture, but a powerhouse driving real results.

Hey, Look Over Here!

When you were figuring out your stages, maybe you used quant research, like a brand tracking survey, to ask your market a series of awareness and consideration questions. Somewhere in there, it’s likely that your competitors came up. So, wouldn’t it be worth asking the market the same questions about those competitors? That way, you can build a rough image of their purchase funnels and conversions and see if they’re stealing your lunch! Pretty handy, right?

Step 7: Set Objectives That Aren’t Just Buzzwords

So, with your funnel findings in hand, you’re ready to identify your leaks and set your targets. What’s a leak? Well, it’s your smaller conversion numbers from stage to stage. It’s where you are losing the most customers. Some are easier and cheaper to fix. So, it might be worth starting there. You’ll want to set out SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives. Ones that will really move the needle on your business. And you’ll tie them directly to the stages of your funnel, whether that’s improving conversion at the repurchase stage or increasing website traffic. Remember, it’s best to focus on fixing the bottom of your funnel first. Otherwise, you’ll improve the top and still be leaking out customers at the bottom end. Your funnel is now a strategic weapon. One that can even be used to measure the progress of your objectives to see how you’re tracking. Weekly, monthly or annually.

Building a custom funnel isn’t some optional extra. It’s essential for understanding your business and developing a sound strategy. When you connect your funnel to your budget—especially with zero-based budgeting—you’ll ensure that all your resources and efforts are in the right place. And you can keep adapting your funnel to improve conversion rates and customer acquisition. The funnel reminds you that sales and marketing aren’t really two separate things. They’re involved in different stages on the same funnel for the same consumer. And you might even have different funnels for different customer segments dependent on their buying journey.

Either way, funnels can help you unite your sales and marketing teams towards a common goal: the customer. So, the time has come to build your own funnel that’s tailored to your business, your market, and your goals. Do it right, and you won’t just be another marketer. You’ll be a marketer who delivers results.

This content is brought to you from our Mini MBA in Marketing. Creating A Customer Purchase Funnel is just one small part of Module 6 – Objectives.