A marketing funnel is a series of stages to guide prospects through the customer journey. The funnel helps marketing teams plan and measure efforts to attract, engage, and convert prospects through content and other marketing materials, like landing pages and ads
The funnel can be categorised into a three-stage model:
1. Top of the funnel: awareness
The top of the funnel (TOFU) is where prospects become aware of your brand and engage with it for the first time. They might not know a lot about your product or service yet, so this stage focuses on content and marketing material that promotes brand awareness.
Use this stage to attract prospects, and show them what you have to offer:
Create a landing page or infographic that introduces your brand, service, or product to new visitors.
Use paid ads on social media and in podcasts that are relevant to your target audience.
2. Middle of the funnel: consideration
Potential customers enter the middle of the funnel (MOFU) once they’ve engaged with your brand in a meaningful way: maybe they’ve subscribed to an email list, are following you on social media, or have signed up for a webinar. Use this stage to engage with prospects—to earn their trust and set your brand apart:
Write an article or white paper that provides value, answers a question, and solves a problem for your potential customers.
The bottom of the funnel (BOFU) is the last place prospective customers go before they convert. You’ve gotten their attention, built trust, and fostered a relationship with them. Use this stage to convert prospects—give them specific reasons to choose your brand over your competitors:
Offer a trial or demo so visitors can experience your product or service first-hand.
Write a how-to guide or article that answers questions and eliminates any doubt or blockers potential customers may experience.
Share social proof, like customer reviews and testimonies, to build even more trust.
Make feature and price comparison charts easy to access and understand.
Send segmented email marketing campaigns and use on-site surveys—for example, send an email to users that have abandoned their shopping cart, or put an exit surveyon the checkout page.
Measuring the success of your marketing funnel
Understanding your customers requires observing and communicating with them—not just looking at numbers on a chart and making assumptions. To measure your marketing funnel's success, you need both quantitative and qualitative data (more on this later).
That said, there are still some key quantitative metrics to keep in mind when you measure your marketing funnel's success and effectiveness.
4 marketing funnel metrics you should measure
1. Cost per acquisition (CPA)
CPA measures how much you’re spending on marketing to acquire each new customer. Teams usually look at this number to analyse their paid advertising, email marketing, social media, and other paid marketing efforts.
To get this number, divide the entire cost of your marketing campaign by the number of conversions. From there, the idea is pretty simple: if the cost outweighs the gain, you might want to consider ending the campaign or testing alternatives.
2. Customer lifetime value (LTV)
LTV measures the continuous value a customer brings to your company. This metric is all about retention, which carries particular weight for SaaS (software as a service) companies because subscribers pay regularly. However, LTV also gives insight to industries like e-commerce and traditional sales—if you can predict the likelihood of a customer making another purchase.
3. Conversion rates
Conversion rate measures the frequency of conversions. Some marketers only focus on the final conversion: sales—but you can measure each stage's success through micro-conversions or goal conversions. For example:
TOFU conversion: how many visitors convert to marketing qualified leads (MQLs)
MOFU conversion: how many MQLs convert to sign-ups or subscribers
BOFU conversion: how many sign-ups or subscribers convert to customers
Measuring goal conversion rate allows your team to make more informed decisions about each funnel stage rather than just the final outcome.
4. Conversion rate per channel
Each marketing channel has different goals, so it’s important to analyse the success of each one. These channels might include
Paid ads (Display, SEM, Social, Podcasts)
Referrals and influencers
Like with goal conversions, teams with clear definitions for conversions in each channel will have an easier time measuring success. Ask yourself: