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027 - How to create a marketing funnel

What is a marketing funnel, and how do you create one to get more customers? If you understand the journey your customers take before they buy, if you map out the steps that someone has to take to become a customer, then you can develop strategies to move people along those steps instead of just leaving it to chance.

This is what we call a marketing funnel – but don’t think that people will move through your funnel on their own. Some will, but the vast majority won’t. In this episode, David takes a look at the three stages of a marketing funnel, how you can take customers from the top to the bottom, and (if your funnel isn’t working) where people are probably getting stuck.

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Full episode transcript

Hello and welcome to episode twenty-seven of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe.  If you have a vegan business, or are thinking of starting one, then Vegan Business Tribe is here to support and inspire you not just to build a vegan business, but to build a SUCCESSFUL vegan business.
 
And if you want to go beyond the podcast and connect with our community of like-minded vegan entrepreneurs then head over to Vegan Business Tribe .com where you can attend our online meet-ups, get support with your vegan business, study our vegan marketing course, get access to both me and Lisa and just be part of a wonderful community of vegan business people just like you.  And we’re always really grateful to our members because they are the people who mean we can keep recording this podcast every week and putting out all our content and just generally doing everything we can to support vegan businesses.
 
Now, I’ve found myself talking a lot about funnels recently, and if you’re fairly new to business then you might think that’s quite an odd statement for me to start out with – because you might not have heard the use of the word funnel in a business context before!  A funnel might be something that you’ve only encountered in the kitchen or when filling up your car with oil.  And I’m sorry to disappoint you if you’re hoping that I’m going to be talking about baking or car maintenance, but that’s a whole other podcast series.
 
Or – it might be that you’re already familiar with the concept of a marketing funnel: you know your company kind of has one but you’ve never actually sat down and mapped it out so you can improve it.  So let me start at the beginning and explain the concept of ‘funnels’ in your sales and marketing strategy.  Whenever someone buys from you, that customer had to go through a process that led to that sale. So, for someone to buy your product, first they need to actually become aware of you – it’s common sense that someone can’t buy your product if they don’t know you exist. But before someone becomes a customer they also go through a period of evaluating what you are selling.  They need to decide if the product is for them and if it fulfils their needs before going on to make a purchase.  And having a strategy in place to lead someone through this process of becoming aware, evaluating and then buying is what we call your marketing funnel – and we call it a funnel for two reasons.  First, because of its shape:  Far more people become AWARE of your product than the number of people who evaluate it.  And more people EVALUATE your product than actually buy your product, so if you imagine an upsidedown cone shape, then at the top are all the people who are aware of you, these are the people at the top of your funnel and they are a long way from the bottom which is where they become a customer.  Then the next section, in the middle, are those who are aware of you and who are evaluating you or thinking about buying from you.  Then right at the bottom is the final, smallest section, and these are the people who actually make a purchase and buy your product.  And it doesn’t matter if you sell a physical product or a service, or even if you are a charity looking to raise donations, the idea of a ‘funnel’ of your potential customers works just the same.
 
But the second reason we call this a funnel is because people go in at the top, and have to move down the funnel before they can become a paying customer.  They don’t skip a step: someone can’t evaluate your product if they are not made aware of your product first.  And someone won’t buy your product until they have gone through a phase of evaluation – and when your funnelling strategy really works well, it actively drives people to that final point, just like a funnel would with a liquid in real life.  It takes people who are aware of you, encourages and prompts them to start evaluating you and then leads those making an evaluation into making a purchase.
 
So I am sure that all this makes sense to you because I know you’re an intelligent person, but I also know that most small businesses completely ignore their funnel.  It’s like a sealed-off closed unit, and this process of awareness, evaluation and purchase that your customers go through goes on without any real input or influence from you.  People tumble down your company’s marketing funnel almost by accident.  And this is what most people describe as ‘organic’ growth.  And when I ask vegan business owners where they get their customers from and they answer that sales come ‘organically’ – I can’t help but smile to myself because what that actually means is you have NO IDEA where your customers come from or why they buy from you.
 
The idea of ‘organic growth’ is a myth – customers don’t just organically pop up out of the soil like carrots.  The process someone takes of first becoming aware of you, and then weighing up your product, and THEN actually taking the leap to spending money with you – this process goes on whether or not you decide to pay attention to it.  But if you DON’T pay attention to it and are not trying to influence it, then you are just crossing your fingers and praying that customers will take themselves through that process.  And the truth is, the vast majority don’t.  Most of your potential customers get stuck at some point in your marketing funnel.  How many followers do you have on social media compared to how many customers you have?  How many people have you got signed up to your email newsletter, or how many people is Google Analytics telling you are coming to your website every week? All these people are in the top of your funnel, so why aren’t they going through to the bottom and becoming a customer, where are they getting stuck?
 
If you understand the process that people take in deciding to become your customer you can use that knowledge to build a better funnel.  If you understand the steps that people take to move from one section of your funnel to the next you can create strategies to prompt them to take the next one.  Because THIS is what successful companies do.  Especially if you are a customer of a big company, there’s a good chance that it didn’t happen by accident.  They spent possibly years making sure that by the time you had a need for their product that you were already familiar with their company and brand.  They made sure that when they identified you were starting to shop around that their funnel picked you up and you were constantly encouraged to take the next step.  An offer that seemed to arrive in your inbox at just the right time; an in-store promotion that got you to try them out; an advert in your feed encouraging you to find out more about their product; an offer for a chat with a representative right at the time you were making your mind up… you were coaxed and slowly led down their marketing funnel.  Now you probably didn’t know this was even happening, but compare that to your own marketing activity.  You are probably focusing on getting people into the top of your funnel, on trying to make more people aware of you and hoping that they ‘organically’ then lead themselves through the rest of the process.  Or worse, you might be trying to push people straight from just being aware of you to buying from you without having helped them through their evaluation process, and you’re not understanding why no one is responding to your offers.
 
Even if someone just buys something from a supermarket shelf, they still go through this funnel. They will look to buy a brand they are aware of and familiar with first. They will still evaluate a product on a shelf, both against other products in-store and against the need they are trying to fulfil.  That evaluation might be just reading the back of the pack – or how often do you see people on their phones now in shops Googling reviews of products or finding out more information before buying it.  And they might pick up a product several times but not put it into their basket until the day that it’s on sale, or there’s two for one offer, and that’s the trigger that gets them to try it.  Even if someone ‘impulse buys’ a product, they still go through the same process but it might be in a short amount of time.  The same three-part funnel concept applies no matter what you are selling – and the more your product costs or the more complex it is, the longer and more complex that funnel is and the more attention you need to pay to it – because if you are leaving it to chance, then most people won’t make their way from the top of your funnel to the bottom.
 
Whether or not you’ve actively created a funnel or not, your customers are still going through the process so you may as well claim it and take control of yours.  So how can we take this knowledge and use it to do the thing that, if we’re being honest, we’re all here to do: to get more customers.  Well – if you know what has to happen to someone to make them into your customer – if you know what process they go through, what decisions they need to make and what steps they need to take – then you can lead or ‘funnel’ potential customers towards these actions.  Let me give you a simple example, we discovered with Vegan Business Tribe that if someone made a personal connection with either myself or Lisa they were much more likely to sign up as a paid member.  That might have just been an email exchange or a chat on LinkedIn, or they might have been aware of us but then met us in a break-out room at a networking event – once they have had this little bit of personal verification they are much more likely to then go and sign-up – and I get that.  We’re an online membership, it’s like online dating.  You want to make sure someone actually looks like their profile picture before you’ll go on a date with them. 
 
But we discovered this step was fairly crucial, someone could have been aware of us for 6 months but it wasn’t until we had that little personal touch-point that they then joined up.  And because we KNOW this, a lot of our marketing and our funnelling strategies lead people to have that little personal interaction with us.  Try it now, go find me on LinkedIn at David Pannell, and send me a connection request with a note saying I told you to do it.
 
And this is why we have OUR marketing funnel mapped out on flip-chart in the office, identifying the different stages people need to go through to become a member.  People don’t just listen to this podcast and then go rush to the site and sign up as a member!  Even though I know that becoming a member of Vegan Business Tribe might actually be the turning point for your company, it might be point when you decided to get serious about your business…  even though I KNOW that your vegan business will be a lot more likely to succeed if you surround yourself with our other VBT members who are on the same mission as you… I have to hold back on trying to make you jump from just listening to this podcast to jumping right to the end of the funnel because I know there’s a process you need to go to first, so our own strategy is to funnel you towards taking THOSE steps instead.  As a quick aside, Lisa and I were in a business clinic with a group of members last week when the concept of marketing funnels came up and I explained ours at Vegan Business Tribe – as I said we have it on a flip chart in the office and I like to be really open about how we do our marketing so that members can learn from us – and one of the people in the Zoom session started laughing because she realised that was the exact journey she had taken.  She had been ‘funnelled’, in the nicest possible way!
 
So let’s take a look at a typical marketing funnel in more detail.  As I said, the reason it’s a funnel shape is because there are a lot more people in the top than at the bottom.  The people at the top are your potential customers right at the start of their relationship with you and your company.  These are the people who you have made aware of what you do, through advertising, vegan fairs, social media, going to networking meet-ups, putting leaflets through doors and all the other great marketing activity you have been diligently doing.  Getting people into the top of your funnel is really crucial activity.  And when we do things like tradeshows and fairs we call this ‘top of the funnel activity’ but making someone aware of you isn’t always as easy as you think.  How often have you heard an advert on the radio, and you can join in with the advert word for word, but if I was to ask you which company the advert was for you would have no idea?  Or if you were to look through a list of all the companies you are following on all your various social media accounts, would you be able to tell me what each of those companies did without going and looking them up?  And this is quite a hard truth: someone is not aware of you just because they are on your mailing list.  Someone isn’t aware of you just because they follow you on social media.  All it means is that at some point in the past, they were interested enough in what you do to open up a channel with you for the future, but they will have done the same with hundreds of other brands and companies.  Someone being properly ‘aware’ of your company is a really important step for them becoming a customer, but I can look through my LinkedIn feed on a daily basis and don’t remember linking up with half of the people I see on there. I can meet a new vegan business at a local market or fair and go to follow their Instagram only to find that I’m already following them. And you will have heard of this being referred to as ‘touch points’.  People will need to have had multiple touch points, or to have been made aware of your business many times before they ACTUALLY become consciously aware you exist.  Just because someone is digitally following you, that doesn’t mean there are aware of you.  If you use a service like MailChimp, you can rank your email subscribers by how often they interact with your emails – and you might see that up to 80% are inactive, they never open your emails.  So if you think you have a big audience, if you think that lots of people are already aware of your business, take just 15 or 20% of those people as the more likely figure of how many people are actually, consciously aware of you.
 
Someone needs to be on your mailing list, they need to be seeing daily stories from you on Instagram or TikTok.  They need to getting tagged in your posts on LinkedIn. They need to be seeing your stall at the live shows.  They need to have heard you interviewed on a podcast. They need to have read a story about you in their newsfeed. They need to see you talk at an event.  They need to meet you at a networking session.  And not until someone has seen you this many times and in this many ways will they, actually, maybe, be aware of you. There is a lot of noise out there, and you need consistency, remarkability and tenacity to break through it.
 
And getting people aware of you, truly aware of and familiar with your company, is actually half of the battle. If you can get, and stay, in your target market’s mind then when the time comes that they are actually in the market for what you sell, you’re going to be the first company they look at.  That’s why people go to the same networking events month after month, to have that constant presence.  They know that everyone in the room isn’t in the position to buy from them right at the moment, but they want to be the familiar face when they are. That’s why if you go to vegan events you will see the same companies over and again.  One Planet Pizza, Viva La Vegan Clothing.  They know they need to build up familiarity to get into people’s consciousness.
 
And all of this is ‘top of the funnel’ activity.  It’s making people aware of us, it’s someone starting their journey with you, and I would say that most companies don’t realise how much effort is required to make someone aware of them.  They think that once someone is on their mailing list, that’s it! They can move on to finding the next person. And although, as businesses, we need new people constantly going into the top of our funnel, there’s no point in putting all your effort into making new people aware of you if that’s as far as they ever go.  You get no money for an Instagram follow.  And if you keep spending your money and energy on making people aware of you but few become customers, then you will soon run out of both of those resources.  And that’s why you need to have a strategy to move people from just being ‘aware’ of you, into the next step of the funnel, which is ‘evaluation’.
 
When someone moves to the evaluation stage of your funnel, it means this person is not just aware of you, but they are actually thinking about buying from you.  Now, this doesn’t mean that they will – I mean, how many things do you consider buying every year but don’t?  I would say LOADS.  But KNOWING the process someone goes through when they are considering buying your product is crucial.  What questions will they be asking and need the answers to before they will part with money?  What are they evaluating your product against?  What are their unique problems that they need solving?  Because if you know, then you can make sure that those questions are addressed in your marketing.  And maybe a person needs to go through a certain process before they buy.  Some companies know that once they get someone to try a sample product, there’s an 80% chance that person will go on to become a customer.  So all their marketing, their whole funnel points people who are actively evaluating them to request a free sample.  They don’t just give out samples to everyone in the top of their funnel, they couldn’t afford to, they would go out of business.  Just the people they have already identified as being in the second stage of the funnel.
 
What marketing you do to people who are in the evaluation stage of your funnel can and should be different to what you are doing to create awareness.  People might need to evaluate your product in real detail, they might need to see that it’s worked for someone else before they commit – so when you can see that someone is really interacting with you but hasn’t become a customer yet, that might be the time to offer to connect them to a current customer to talk about their experience.  You need to have these kinds of different strategies in place to move people along to the next part of your funnel, not just hope they do it themselves because most won’t.  They will get distracted and forget that they were thinking about buying from you, or they will not be able to find the answer to that ONE random question so go look at a competitor instead.  Or they will just drift off – you didn’t manage to excite them enough whilst they were in the buying zone to get them over the line or you weren’t able to convince them in the time they gave you their attention.   So providing people with the answers to questions you know they have; or presenting them with the right offer at a time when you know they will really respond to it; or just giving them a healthy push to buy will be the difference between someone becoming a customer or going off the boil.  And if you have a leaky funnel, i.e. you are not prompting the people who are aware of you into evaluating you, and you are not then convincing the people who are evaluating you to buy from you, then there’s not much point in spending all that time, money and energy into keeping putting people into the top.
 
Because at some point, we need to move people to the final, third section of your funnel, which is to make a purchase, or to become a subscriber or to donate if you are a charity.  And that’s what we are all here for, no matter what your business is you need those sales and conversions. Remember, you can only keep doing the good you are doing, you can only move the vegan cause forwards if your business is financially sustainable, and you can give yourself a standard of life which is sustainable too.  Ask Dale Vince, Matthew Glover, Claire Smith or any of the other amazing vegan impact investors who are really changing the vegan business scene – and they will tell you that you can do far more good in the world with a profit than you will ever do with a loss.
 
And I know that your next question is, well, how DO you actually move people into that final third of your marketing funnel, how do you get them to actually go from evaluating you into buying from you.  And the quite simple answer is: you ask them. 
 
Too often we try to build a business without the customer.  We try and build a business from behind a computer screen and occasionally get drawn into an email with a customer if we really have to.  Whereas if you want to build a business that is REALLY successful, you need to know your customer inside out, you need to make these people who are kind enough to spend their money with you your best friends.  It’s not surprising that so many of the biggest retail brands started out as market stalls where you can’t hide from your customer and you can work out exactly what questions they ask (and what answers they need to hear) before they buy. 
 
So if you have listened to all this, and it’s making a lot of sense and you’re now thinking you need to plan out your own marketing funnel, then start with the customers you already have and create what we call a ‘reverse marketing funnel’ first.  Trace the route backwards from them becoming a customer right back to where they first heard about you, and work out what that journey looked like, write down all the steps they went through.  How long did it take them to go from first becoming aware of you to then buying from you, and what did they do in that time?  What stopped them doing it sooner?  What was the trigger point that actually made them into a customer and could you have made that trigger point happen earlier?  And if you don’t know the journey they took to becoming a customer, then get them to help you.  In other podcast episodes, we’ve spoken about spending time interviewing your best customers about how they become customers – go right back and listen to episode 003 about how to find more customers and I explain this process in a lot of detail. But reach out to your best customers, the ones that really love you and want to help your business grow, and map out how THEY became a customer.  And once you’ve mapped out THEIR journey, test if the same things work on other potential customers. 
 
Testing is a huge part of developing your funnel, and it’s both fun and frustrating in equal measures.  The reason Lisa and I have our marketing funnel for Vegan Business Tribe on a flip chart in the office is so we can keep updating it – it’s a work in progress and always will be.  If one of us gets a really good response to something, the other one will try it out too to see if it works on other people.  This is how we came to use personalised video messages with new followers on Instagram to get them to go take a look at the website, it’s why if you connect with me on LinkedIn you will likely get a very specific two-sentence reply back that we’ve proven gets a certain kind of response.  It’s how we know that people in the evaluation stage need some kind of personal interaction before they go on to sign-up as a paid member, but also why it’s no use trying to force that personal interaction if this is the first time someone has heard of us.  They need to listen to a podcast or two, or see us speak at an event to understand who we are before they become receptive to an email exchange.
 
And I would love to give you a pre-made marketing funnel diagram, and just say ‘do X and your customer will move to the next stage of the funnel’ but it just doesn’t work like that.  What will get someone to move down YOUR marketing funnel is unique to what you sell and your customer’s unique journey.  So the bad news is that you are going to have to map out your own funnel, but the good news is that usually, you actually already know a lot of what makes your customers buy – you’ve just never sat down and purposely tried to map it out on paper and create a strategy around it.  Any gaps you have in that knowledge, talking with your customers will help you fill them.  And it’s never too early to start mapping out your funnel – perhaps you’ve just launched and got your very first customer, map out exactly how that first, single person became a customer and start building a funnel strategy around what you know.
 
So maybe you are producing a lot of YouTube content, and getting a lot of views and traction – what’s going to get those viewers to go sign-up to your email newsletter so that you can actually start identifying who’s showing an interest?  Is it going to be a special offer?  Is it going to be an invite to an exclusive live online event, and all they have to do to take part is register with their name and email address?  Then what’s going to take them from being passively on your email list to actually starting a sales conversation, what’s going to take them from awareness to evaluation?  It is going to be the offer of a free sample?  Is it going to be a case study of someone who had a problem that you know a lot of your followers have that you were able to solve?  And then once you have them evaluating you – what’s going to take them to the last stage of your funnel, to make a purchase?  Perhaps you will take everyone who clicked on and read that case study (and you know who these people are because you are using various clever technology to tell you how people interact with your email) perhaps these people get the offer for a 20-minute Zoom chat to talk about their own specific problem and how your product might help.  Perhaps the people right at the end of the funnel are the ones that get the exclusive special free-trial offer that you don’t give to anyone else.  And all that, is how a marketing funnel works.
 
So, this IS down to you to work out – but it’s not as daunting as you think.  All this can be logically mapped out on a big sheet of paper.  Start by drawing an actual funnel and mark the top section ‘Awareness’, the middle section ‘Evaluation’ and the bottom section ‘Purchase’.  Then start dropping in what activity will first get people into the top of your funnel, such as Facebook advertising, tradeshows, leafleting and how you are going to make these people aware of your product or brand.  Then start adding in what needs to happen to take people from being aware to actually considering you properly.  What questions will they need answering, what steps do they need to take and how can you prompt them to do that.  What tools can you use (from email marketing to picking up the phone) to get them properly engaged?  Then in the bottom section write down what needs to happen to make that person a customer.  What are the actions that your customers go through before they part with their money?  Maybe they buy after attending a trial session and you’ve sent them a follow-up email.  Maybe they buy after getting a personal recommendation.  And if you don’t know, then ask.  And find out what can you do to get them to that trigger point quicker instead of leaving it to chance.
 
Because once you start to understand your marketing funnel, once you work out how people move through it then this dictates what marketing you should do.  If you are planning a new marketing campaign then decide what stage of the funnel is it aimed at.  Is it an awareness campaign to get people into the top of the funnel in the first place (eg Facebook advertising, doing a trade show), or is it a campaign that aims to take people who are already aware of you to the next step?  Find where people are stuck in your funnel and aim to move them along.  If you have a swelling email list from all the people who have downloaded that PDF lead magnet from your website but they haven’t become customers yet, then you need a campaign just for these people.  Do you need to use blunt but effective tools like money-off their first order, or do you need to engage them with an information-led campaign to help prove that your product will solve their problem?  Maybe even try reaching out to a few to ask why they haven’t gone further.
 
The technology is there, and simple to learn, for you to show Facebook adverts to people who went to your product page but didn’t then go on to buy – to either invite them back or give them a special offer.  Online apps like MailChimp will show you who out of your mailing list is the most enthusiastic about the emails you send them, so that you can engage them to find out what’s stopping them from taking the next step, what the blockage is in the funnel.  And even without the technology, keep thinking about prompting people to take the next step.  What content can you produce to plug the gaps and answer the questions that you know people need answering to move to the next stage of your funnel?
 
I could just keep going on this topic, but then this would change from a single podcast episode into a whole series on marketing – and fortunately, we’ve already got that on the Vegan Business tribe website!  So if you’ve been listening to this and you know you need to get serious about claiming your own marketing funnel and working out where people are getting stuck in it – then, just for you, I’ve already created templates and examples of how to map out your marketing funnel as part of the vegan marketing course which is included in the paid monthly membership on the site.   And if you listen, really really carefully, you will now hear me gently steering you from the awareness part of the funnel into evaluation because you can actually access the first chapter of the marketing course for free to try it out before you sign-up.  There, and that didn’t hurt a bit, did it?
 
OK, we’ve covered a LOT in this one, so let’s have a quick recap bullet-point list of what we’ve just gone over:
 
  1. Whenever someone buys from you, that customer had to go through a process that led to that sale.  That process exists whether or not you have mapped it out, so you may as well claim it and be in charge of it.
  2. It’s called a funnel because it’s got three phases:  Awareness at the top, evaluation in the middle, then purchase at the bottom.  And the number of people in the top is far more than the number of people who get to the bottom.
  3. The idea of ‘organic’ sales is a myth. If you tell me that your sales are organic, that just means that you have no idea where they come from.  Customers don’t just organically pop up out of the soil like carrots, they go through a decision-making process and you need to know what that process is so that you can influence it.
  4. Just because someone is on your mailing list or following you on social, don’t think they are actually aware of your business.  A single point of contact is not enough to get into someone’s consciousness.
  5. Once someone IS aware of you, you then need a strategy to move them to the evaluation stage of your funnel. You get no money for an Instagram follow.  And if you keep spending your money and energy on making people aware of you but few become customers, then you will soon run out of both of those resources.
  6. Don’t think that people will move down your funnel on their own.  Some will, but most won’t.  Being able to answer whatever question they have, or presenting them with the right offer at the right time, or just giving them a healthy push will be the difference between someone becoming a customer or drifting off.
  7. To find out what moves people to the next stage in the funnel, simply ask.  Talk to your customers to learn the process they went through, then test to see if what works for one customer then works for others.
  8. Once you understand your marketing funnel, this then dictates what marketing you do.  If you are planning a new marketing campaign then decide what stage of the funnel is it aimed at.  Is it an awareness campaign to get people into the top of the funnel, or is it a campaign aimed at the people who are already aware of you to get them to take the next step?
 
And that is it – as I said, if all this really makes a lot of sense to you but you know you are simply not doing all this kind of stuff, then DO go take a look at the marketing course on the website.  It’s written by myself and Lisa and is the only full marketing course from a vegan business perspective.  And I’d also love to hear back from you if you find that this has helped.  Come find me on LinkedIn, or message us through the website.  Because having these kinds of strategies in place is what makes a difference between your business being a bit of a hobby, and you actually building it up to be something that is really successful.  You CAN use the same techniques and the same knowledge that large global companies use on you as their customer, but apply those to a business which is making a difference in the world and moving the vegan cause forward.
 
So, thank you for your time listening –  before you go though, I’ve got one favour to ask – we are on a mission to help vegan businesses do better, and I’d really love if you can help us get this information into the hands and ears of as many other vegan businesses owners as possible.  So if you have found this episode useful yourself, and you know any other vegan businesses owners who you would think it would help, or if you are in any vegan business Facebook groups – then if you can share this podcast with them, or even this specific episode, you will be really helping us in achieving that mission.  Because the more vegan businesses we can help level-up with this kind of knowledge, the bigger the impact we’ll have on the business scene and the quicker we can all move towards a vegan world.
 
Thank you so much for listening, I always really appreciate you giving up your time, and I will see you on the next one!

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