A Guide To Marketing Funnels: Definition and Creation Tips

By Indeed Editorial Team

Updated October 11, 2022 | Published December 12, 2019

Updated October 11, 2022

Published December 12, 2019

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

An infographic of a conversion funnel. The five stages listed from top to bottom are awareness, interest, desire, action and loyalty.

Any business that provides goods or services should consider using a marketing funnel. Organizations need to monitor the effectiveness of their sales and marketing strategies, and a marketing funnel helps provide that data. Utilizing this data allows you to learn how to create a more effective marketing campaign, retain your clients and strengthen your brand image and ties.

In this article, we explain what a marketing funnel is and how you can use one. 


What is a marketing funnel?

A marketing funnel is a system designed to engage a target market from the point of the first contact to purchase. Also known as a sales funnel, its purpose is to convert each contact into a client. Not all contacts eventually purchase the goods advertised or sign up for the service, so the number of people at the beginning of the process reduces, giving it a funnel shape.

For funnel marketing to be effective, each level must work perfectly and link seamlessly to the next. A marketing funnel gives you accurate information about what your customers want.

Using metrics, you can often see what your customers like about your product and what they don’t like, giving you info you can use that to modify your process. It also presents how customers respond to the information you offer during each stage and helps you find better ways of sustaining their interest going down the funnel.

Marketing funnels help you make the best use of your budget. By directing your resources in the right direction, you can generate more sales, retain customers and develop more revenue for your business. 

Related: Top Questions To Expect During a Sales Interview



Elements of a marketing funnel

There are five main parts of a marketing funnel:

  • Awareness

  • Interest

  • Desire

  • Action

  • Loyalty

1. Awareness

This is the point at which you attract your target audience. In general, businesses provide solutions to problems. Your target market should include either:

  • Those who face a problem

  • Those who are not satisfied with existing solutions to a problem

Potential clients can notice your product through various means, including posters, flyers and email marketing. Depending on the urgency of their need and the strength of your message, they may instantly purchase your product. In most cases, individuals typically prefer to research a product or service before they buy it. Many people remain in the awareness stage. 

2. Interest

The impact stage, or interest stage, can help you retain more potential customers. Once the target knows you exist, the next step is to show them exactly how your product can solve their specific problem. Be sure to demonstrate why you are best equipped to provide the solution. By the end of this stage, the target should be able to make an informed decision.

3. Desire

At this stage, the target should be ready to make a purchase. If you generated enough interest in your product or service, the potential customer is considering your product. To keep your prospects in the funnel, you should highlight the extra value your service provides. You’re probably not the only business the prospect is considering, so convince them your product is the best on the market. 

4. Action

The prospect has now reached the point in the funnel at which they decide if they will purchase your product or service. Though it is unusual, prospects may reach this stage without actually purchasing. A good solution at this point is to highlight positive feedback from current clients and include extra benefits to your product package.

5. Loyalty

The final level is customer retention. At this stage, you collect feedback from the customer on their experience using your service. In addition, you may offer support services to ensure your loyal customers receive the best possible service. 

Related: 8 Marketing Interview Questions To Expect


How to create a marketing funnel

Here are the five steps that you can follow to create an effective marketing funnel:

Create awareness for your service

You should find ways of reaching your audience so they know you exist. Flyers, posters and billboards placed in strategic locations are all good ways of reaching your target audience. For instance, if you make products that help children learn a new language, you should advertise around schools, daycare centers or communities where parents gather. 

Technology allows you to target specific demographics, maximizing the cost of your publicity and optimizing results. You can place digital advertisements on different websites related to your product or service. For example, if you work for a hotel, you can target airlines and car rental websites. Consider placing advertisements on social media platforms to target a wider audience.

Related: A Guide To Funnel Charts

Grab the potential customer’s interest

Once you create awareness of your product, build a relationship with potential customers. Show your prospects more specific information about their problem and how your product solves it. Also, explain how to use your product in demonstrations. Try to engage potential clients by creating actionable content related to your service.

Potential clients may follow you on social media platforms or subscribe to your email newsletter. In addition, linking content across all these sites enables your targets to stay connected to you.

For instance, including your social media links in your email footer is a signal for people to follow you. Likewise, posting a sign-up form on your blog or website converts interested visitors into subscribers. This can take your prospects further down the digital marketing funnel and closer to conversion.

Give prospective clients reasons to desire your product or service

Highlight your unique selling proposition and optimize your site for search keywords, such as “best,” “top” and “vs.” This will help showcase your products when people search for the best solutions to their problems. It is equally useful for product comparisons.

You can also use your social media tools to craft a compelling narrative showing why your product is different. This may be the most critical piece in a purchase funnel because it sets you apart from competitors.

Your narrative can introduce a new idea or teach them something new about your solution. With each new piece of information, you bring your prospect closer to choosing you.

Convert contacts to customers

Your process is almost complete and you’re about to make a sale. Customer reviews show prospects that there are people like them who trust your products and have had good results. Place these reviews on your checkout page to further convince your targets.

You can also offer new customers a discount to reduce the cost and encourage them to purchase. Many organizations offer trial periods so that customers can test the experience. This is also a good way to promote conversion.

Related: How To Ask For a Review From Customers: The Complete Guide

Retain loyal customers

After conversion, you should maintain contact with your new clients to encourage them to go down the funnel multiple times. Send out a feedback form and show them that their input matters to your business. Also, develop your technical support and be available to provide clarifications and answers to any questions they may have.

Related: 16 Customer Retention Strategies That Work

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