A Digital Marketing Funnel

Corey Northcutt    By under Inbound Marketing.

Every great digital marketing effort combines three things.

It doesn't matter if the brand is B2B or B2C.  Ecommerce or brick & mortar.  They are:

  1. Foundation
  2. Funnel
  3. Flywheel

Everything our agency does revolves around this, and today, we're talking funnels.  How we build them.  And how you can build one for your business too (with or without our help).

What Is A Digital Marketing Funnel?

Funnels break the customer/client journey into stages.

These stages appear in everything from ad campaigns, to sales CRMs, to your analytics.

A very simple, generic marketing funnel looks something like this:

digital marketing funnel

Why Do Digital Marketing Funnels Matter?

There are three reasons.

Reason #1: Relevance

Imagine your favorite web-based software.  I'll assume that you're currently a customer, and that you'd probably advocate for it.

You are a high value relationship to that brand.

Now, what happens when they spam you fresh offers telling you to sign-up.  You'd get annoyed, right?  Since, again, you're already a customer. That's value lost.

When a business fails to anticipate what you want in any (or, lack of) interaction, it's failing altogether.  This applies all the way up and down the funnel.

Reason #2: Utility

Because the customer journey occurs in stages, so should marketing.

Digital marketing, specifically, provides fantastic data for understanding the stages of your funnel.

It also simplifies the puzzle, such that it can be worked in pieces at a time.

For example: how do telecom CEOs age 30-40 originating from a particular Facebook ad campaign convert for your site?

Funnel Thinking Non-Funnel Thinking
Maybe it's the Facebook ad.  Maybe it's the landing page.  Maybe the "step 2" button on the shopping cart isn't clear enough.  Maybe purchases don't happen 100% on impulse, and longer-term successions of emails and ads are needed.  Maybe a certain email subject has a low open rate.

We have the data, so let's review it, and let's work on the transitions between each funnel stage.

This ad isn't selling anything.

These ads are bad.


Do you see the difference?

The questions on the left could be easily answered by data.  The right side is an incomplete picture, which results in an impulse decision. Smart executives don't gamble when it isn't necessary.

Reason #3: Profit

If reasons #1 and #2 didn't convince you, I bet the numbers will.

If you never took economics, or it's been awhile, here's a crude review.

  1. Supply and demand: these two forces weigh on each other in any marketplace.
  2. Game theory: expect other actors to make their best possible decision.
  3. MR = MC: rational actors will spend all the way up to their break-even point.

Now, imagine a competitor in the Google Ads marketplace.

Each of you run ads in Google.  On average, you each pay $5 for every click.  And for every $100 spent, you each make one sale worth $100.   So it goes:

You Spend You Make They Spend They Make
$100 $100 $100 $100

In this example, each of you are converting 5% of clicks that come to your site into sales.  You each need 20 clicks to make a sale.

Now, let's imagine your competitor works on their funnel. They improve so that 10% of their clicks become sales. This means they only need 10 clicks to make a sale.

Doesn't affect you much, right?


Now, remember, we assumed that your competitor is rational.  So, they'll put in more money as far as they're still making money; until marginal revenue = marginal cost.

And now they can afford to put in more money.  On a per-sale basis, you might now expect:

You Spend You Make They Spend They Make
$100 $100 $100 $200

But this is never what happens.  Remember, Google Ads is a marketplace, subject to supply and demand.  Ad inventory is limited, so when your competitor buys more (which, at that margin, of course they will), it lowers the available supply.

And that increases your price.  We'll say to $10 per click, up from $5.  You still need 20 clicks to make a sale.  They still need 10.  So the resulting margins actually look like this:

You Spend You Make They Spend They Make
$200 $100 $200 $200

Because your 5% conversion rate is inferior, your ad campaigns are no longer sustainable in this marketplace.  Your competitor increased their spend up to their new break-even point.  Until their marginal revenue was equal to marginal cost, just like economics told us they would.

This is an extreme scenario.   I've used round numbers to make the math easier to follow.  But if you retool for even a 1% change, the effect is the same.  There's just no room in a crowded marketplace for a brand that doesn't convert sales at the highest possible level.

This is why great funnels (and great products) are so important.  When we build viable, long-term marketing, we start with the fundamentals.. a foundation, and then a funnel.

If you focus on "driving traffic" first, you will find yourself in the doomed scenario above.  This is why serious brands must take funnels seriously.

How To Build The Best Digital Marketing Funnel

Building the best digital marketing funnel should happen in three phases.

  1. Simple: Initial construction of a simple starting funnel.
  2. Medium: Scaling personalization based on behavior and segmentation.
  3. Advanced: Endless optimization, freshening of message, and special tactics.

If your industry is profitable, smart people have already done a spectacular job with all three processes above.  So we begin with a few little tricks.

One way to put yourself ahead of the curve involves two tactical audits from the foundation system: the Ecommerce Audit and the Lead Generation Audit.

There's a lot of creativity and science required to have a great funnel.  But if you fall back on one (or both) of those audits; you can drastically improve performance immediately, simply by taking an inventory of these tactics that almost always make a difference.

Phase 1: Construction Of A Dead-Simple Funnel

These are the building blocks of a ridiculously simple funnel.

  • Landing page: Where your various marketing channels send visitors.
  • Opt-in: An email opt-in form, an ecommerce shopping cart, or both.
  • Lead magnet: Some type premium, downloadable content to encourage email opt-in.
  • Drip nurture:  5-7 emails that sell and/or re-sell your product.
  • Retargeting:  Extremely cheap ads served only to your own website visitors.

To start out, landing pages can just relate to your product/services, so we'll call them interest stage.  Unfortunately, in this first funnel, your prospects are anonymous, so you can't send them emails, but you can serve them ads using a retargeting platform like Perfect Audience.

When they progress to either a shopping cart or lead form, they've expressed intent.   If they don't purchase, this is where your remarketing email drip sequence kicks in; automating the age-old task of the sales follow-up.

Until finally, they purchase, and become a customer or client.

Unless your product or messaging is seriously spectacular, this three-stage funnel is probably not sophisticated enough to scale far.  But it's a start.

Since most online sales don't occur on the first visit, you now have a method of continuing to build rapport with your audience using automation until they are ready to act.  After a short while, the Time Lag report in Google Analytics will reveal this impact.

time lag analytics

In our real life example above: blue bars (August) show the after effects of a successful, simple funnel launch.

Notice that sales on the first day after a visitor arrives increases in quantity, but decreases as a percentage of total sales. It's because more visitors are coming back two days, three days, up to thirty days later while we're still tracking them (and certainly beyond, but there are limitations on what Google Analytics can track).

This is what you are working towards.

Phase 2: Scaling Your Funnel

Now that you have a basic (and I mean, really basic) funnel, we can start to make it more useful.

Here are the four ways that you'll want to scale your funnels.

  1. Product
  2. Audience
  3. Higher Depth
  4. Lower Depth

Tactic #1: Product-Centric Scaling

Do you offer more than one product?  Or, a deep product with more than one feature that's popularly requested?  Time to replicate your funnel: landing page, opt-ins, email drips,and retargeting ads.

Tactic #2: Audience-Centric Scaling

Do you target multiple audience segments?  Clients in different industries?  A CEO persona, vs. a CFO persona?  Most grown-up brands will.  Again, replicate your funnel for them: landing page, opt-ins, email drips,and retargeting ads.

Tactic #3: Higher-Depth Scaling

Notice how we haven't targeted awareness-stage visitors yet?  Repeat the steps above using content that solves a problem that's related to your service, but not directly tied to your service in any way.  The possibilities here are nearly limitless; consider research rooted in keyword research and editorial popularity to identify these gaps.

Tactic #4: Lower-Depth Scaling

Notice how we haven't targeted decision-stage visitors yet?  Employing marketing automation software, we can begin to score and qualify leads based on their behavior.  How this gets done is outside the scope of this post, but what matters is this:

We can now divide up interest into more funnel stages and message them accordingly.

  1. Interest: Has opted into an awareness-stage landing page.
  2. Intent:  Opted into an interest-stage form OR reached a lead score of 50.
  3. Decision:  Reaches a lead score of 100.

Frequently, brands define the people in the phases above as:

  1. Prospect
  2. Lead
  3. Marketing-Qualified Lead (or MQL)

And the way we react to each changes.

  1. Continue dripping thought leadership content, but don't talk about the brand yet.
  2. Begin talking about the brand and its products, now that we know that it's welcome.
  3. Very hot lead.  Someone from sales should review and consider reaching out personally.

Now we're much more personalized.  Our communications are starting to be a lot more effective.

Phase 3: Optimize Your Digital Marketing Funnel

It may seem like you've been doing a full time job for months by the time you get to this stage.  And, there's a very good chance that it has been.  But you're not done.

You're not even close, actually.  But as we already covered: an inferior funnel is not sustainable long-term.  We need to keep optimizing.

Optimization #1: Integrate everything

Have you synced your sales CRM,  client database, and every other tool that touches a client interaction?  This intel will allow you to do far smarter drip email marketing and retargeting, and the consideration of customers, advocates, and former customers as potential new funnel stages.

Optimization #2: A/B Test Emails

Continue testing new messaging on every drip, every announcement, and so on, especially in the subject lines.  Consider optimizing the preview text that many email clients, such as Gmail, present from the supposed first line or two from each email, and to stay out Gmail's Promotions tab as well.

Optimization #3: A/B Test Landing Pages

For messaging, layout, colors, page length, reduced navigation, and so forth.  There are lots of best practices, and a lot of the time, testing will surprise even the experts.  Google Experiments, within Google Analytics, provides deeper intelligence for this vs. paid tools like Unbounce and CrazyEgg.  Do consider screen session recordings using something like HotJar, however.

Optimization #4: A/B Test Retargeting

Your retargeting ads, bidding, and other demographic settings are all worth testing as well.  The tools for running these tests are pre-built, so this part is exceptionally easy.

Optimization #5: Enhance deliverability

Stay out of junk folders.  Regularly use Mail Tester to test your message layouts, and MXToolbox to make sure you're staying out of major blacklist databases.

Optimization #6: Improve overall UX

If you haven't done it by now, a recent Mobile Audit and Performance Audit from the Foundation stage are not optional once you've reached this phase.

Optimization #7: Add Triggered Messages & Drips

Do users get specific messaging when they abandon your shopping cart?  How about when they just spend more time on certain types of content on your site?  That should alter their email drip behavior.

Optimization #8: Reputation

How's your reputation?  I'm not just talking about testimonials, client lists, and case studies.  I mean what happens when a would-be sale Googles you?  The Online Reputation Audit would have helped.  What happens when they check your social media - do they see thought leadership and a happy, engaged community?  Or are they met by crickets?  This element is hard to attribute, directly, but it's huge:  61% of consumers look for reviews before purchase.

Optimization #9: Interweave content marketing

Has the funnel been interwoven into content marketing?  Do blog posts, press releases, and other assets all map to their natural opt-ins and email drips?

Optimization #10: Tripwires

Experiment with increasingly lighter opt-ins, like trial offerings and much cheaper products, which are proven to increase the likelihood of a repeat purchase.   More on tripwires.


Once you have a great funnel - and assuming that you've already laid a great foundation - you're ready for the third and final piece of your digital marketing system: the flywheel.