Back to Basics: What Is a Marketing Funnel?

Whether you run a retail or eCommerce business, one thing’s for sure: Not everybody who visits your storefront or website will become a customer. That’s the name of the game in business. But, each prospective customer has an opportunity to convert into a paying customer. To study their journey from prospect to customer (and guide them through it), you need a marketing funnel. So, what is a marketing funnel?

What is a marketing funnel?

A marketing funnel is a tool businesses use to monitor the customer journey from brand awareness to conversion—and beyond (i.e., brand loyalty). The funnel is split into steps, or stages, which differ depending on who you ask. 

Generally, here are the marketing funnel steps, starting from top to bottom:

  1. Awareness: Prospective customers learn about your business, product, or service, typically for the first time.
  2. Interest: Prospective customers want to learn more about who you are and what you do.
  3. Evaluation: Prospective customers consider whether one of your products or services will work for them.
  4. Conversion: The prospective customer makes a purchase or takes another desired action (e.g., signs up for a demo).
  5. Loyalty: The customer continues buying from your business.
Marketing funnel (from top to bottom): Awareness, interest, evaluation, conversion, loyalty

Some marketing funnels have fewer steps or use different words to describe each stage, but the gist is the same. Prospective customers become aware of your business, develop an interest in your products or services, and consider whether to purchase. Some convert into paying customers, and some become loyal to your brand. 

As customers move down the funnel, many drop off. Why? Because not everyone in your funnel will turn into a paying customer—and that’s OK! Losing customers in the funnel is completely normal. Some might be hesitant to take the leap right now. Others you’re marketing to may not be the right target audience. Whatever the reason, your marketing funnel can help you figure out the disconnect. 

Why does the it matter? 

Why aren’t your website visitors turning into paying customers? How are your new marketing campaigns doing? Are you reaching your company’s marketing goals or falling short? 

The funnel can answer these questions—and more. Young Pham, the Project Manager of, shared how important the funnel is for the company:

 The marketing funnel allows our business to track the journey that our customers take before a conversion. So, it helps us to see where we lose leads, which can help us to improve our marketing strategy over time. A marketing funnel is what takes customers through the whole journey, from discovering our business regularly all the way to purchasing our products. The goal is to create an automated system.”

Use the marketing funnel to find out where prospective customers are dropping off, analyze campaigns, forecast revenue, and improve relationships. 

If you don’t track customers through the marketing funnel, you might use unsuccessful marketing campaigns, target the wrong customers, or make cash flow projection mistakes. 


Let’s look at the funnel in action. Say you have an eCommerce website where you sell footwear. You wrote a blog article about the best rain boots for a trip to Ireland, attracting fashionistas and travelers alike. Your goal? Get people to buy one of the pairs of rain boots you sell on your website. 

Using the marketing funnel, here’s how things went:

  • Awareness: 1,000 people read your article during the month
  • Interest: 800 people clicked around on your website 
  • Evaluation: 650 people visited your rain boots product page
  • Conversion: 150 people bought a pair of rain boots 
  • Loyalty: 50 buyers bought from you again

As you go down the funnel, your numbers narrow. Some prospective customers simply wanted to read an article. Others wanted to read an article and subsequently learn more about your brand but ultimately weren’t ready to buy.

You can use this marketing funnel to make decisions about your marketing campaigns. In this case, the start of your funnel was an article on rain boots. It attracted a good amount of website visitors who showed interest in your brand. However, the biggest dropoff happened between the evaluation (650 people) and conversion (150 people) stage. You may want to investigate whether there’s any friction in the purchasing process and optimize your checkout.

How does the marketing funnel start?

So, how exactly do customers start moving through the funnel? One word: Marketing. Your business’s combined marketing efforts get prospective customers into your overall funnel. 

Marketing efforts include:

  • Company website
  • Search engine optimization (SEO)
  • Social media marketing
  • Content marketing (i.e., blog)
  • Affiliate marketing
  • Print ads
  • Email campaigns

Every marketing tactic you try is an effort to turn prospects into paying customers. So, your marketing funnel is going to be pretty big when you look at all of your efforts combined. You can also get a little more granular by creating funnels for each campaign you try (e.g., an end-of-year ad campaign). 

As you get more familiar and comfortable with your business’s marketing funnel, you may try top, middle, and bottom-of-funnel marketing strategies. 

1. Top-of-funnel marketing

Top-of-funnel marketing focuses on marketing to a large audience who aren’t yet familiar with your brand. Generally, this pulls prospective customers into the “Awareness” stage of the funnel. But, keep in mind that most of these prospects won’t become paying customers—yet. 

A top-of-funnel marketing campaign’s goal is to build brand awareness. So, you probably won’t see all the prospects become paying customers immediately. Instead, some may fall out of the funnel (for now). Over time, you can use other marketing campaigns to lead nurture these prospects down the rest of the funnel. 

Examples of top-of-funnel marketing campaigns include:

  • General blog articles
  • Landing pages
  • Social media posts
  • Affiliate marketing
  • Videos
  • Radio ads

Top-of-funnel Marketing: The prospective customer generally doesn’t know about your business. 

2. Middle-of-funnel marketing 

Want to do some marketing campaigns targeted to people who are already aware of your brand? Cue middle-of-funnel marketing. This strategy targets prospective customers who have already moved down the funnel from “Awareness” to “Interest.” 

Middle-of-funnel marketing strategies generally work to strengthen the relationship between prospective customers and your business. They know about you … so how can you keep them interested in your business?

Examples of middle-of-funnel campaigns include:

  • Targeted email campaigns
  • Targeted blog articles 
  • Retargeting campaigns 

Middle-of-funnel Marketing: The prospective customer is aware of your business. 

3. Bottom-of-funnel marketing

Last but not least, we have bottom-of-funnel marketing strategies. Bottom-of-funnel marketing focuses on advertising to people who are already aware of and interested in your business. 

Unlike top and middle-of-funnel strategies, bottom-of-funnel targets a more narrow group of people. The people in this group are high-quality leads, or the most likely to become paying customers. It’s your job to use strategies that show them why your business beats the competition and help them take the plunge.

Examples of bottom-of-funnel marketing campaigns include:

  • Blog articles that highlight your products or services
  • Paid advertising
  • Special offers (e.g., discounts)
  • Follow-up email campaigns 
  • Case studies 

Bottom-of-funnel Marketing: The prospective customer is aware of your business and interested. 

Tips to improve your marketing funnel

What can you do to make your funnel the best it can be? Take a look at the following tips to get started:

  • Create a clear mission statement and brand
  • Conduct a market analysis so you target the right people 
  • Engage with leads throughout the funnel
  • Promote your products or services effectively
  • Make it easier for people to purchase from you (i.e., remove checkout friction)
  • Incorporate user reviews as social proof
  • Use analytics (e.g., conversion rate) to make educated decisions

This is not intended as legal advice; for more information, please click here.

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