The Marketing Funnel is Dead – Long Live the Customer!

The world is changing before our eyes, including the way we carry out our daily activities. For example, I recently hired a roofer to fix a leaky roof at my house. To find one, I asked for referrals on Facebook and within an hour I was presented with options from people that I know and trust. Just 10 years ago, the same task would have required me to look up roofers in the Yellow Pages, make some calls, get a few estimates, check references, and then make a selection.

What does a roofer have to do with digital marketing? Well quite a bit.

The way that we research and shop has changed completely in the last few years. And yet when it comes to marketing measurement and analytics, most organizations are still using an outdated method to assess their activities: the marketing funnel.

The concept behind the marketing funnel was developed in 1898 (yes, that’s an 18!) by E. St. Elmo Lewis, who first outlined the different stages of the customer journey in purchasing a product or service. It allowed for a quantitative analysis of marketing, which had never been done before. The funnel has served us marketers well over the years, but there are a number of trends that have since rendered it obsolete.

1. Today’s customer behavior is less linear than in the past

With the increasing number of channels through which customers can interact with a brand, it’s becoming harder than ever to create a linear view of the customer journey. For example, a growing number of consumers do research online while buying in store, posing major challenges to attribution within the marketing funnel.

2. Funnels don’t take into account the multi-device experience

Today’s consumer interacts with brands through a multitude of platforms and devices. I may find a brand or product on my desktop computer, research it on my smartphone, and then make a purchase using my tablet. Using today’s analytics solutions, I’d be counted as three visitors. As a result, the funnel view of my activity on each device will yield an inaccurate view of my experience with the brand.

3. Funnels aren’t designed to handle pull marketing

The funnel was created in the era of push marketing, where marketers and advertisers controlled the message and the delivery channel. With the advent of social media, marketers no longer control the entire messaging platform. My roofer example is a good illustration of word-of-mouth marketing. Funnels don’t take into account this type of pull marketing.

4. Funnels don’t take into account customer lifetime value and other intangible values

Clearly it’s no longer about just acquiring the customer – it’s about getting them to come back and purchase again and again. Funnels aren’t designed to accommodate intangible customer actions like referrals, product reviews, social media mentions, etc.

Conclusion: We’ve outgrown the funnel. Clearly, new models are needed to assess the customer journey that give a fuller picture of the brand experience across all touch points.

In my next post: A potential new model.

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