Funnelling model, or as it is also referred to sales funnel, demonstrates the idea that every sale that business conducts starts with a large target group of potential customers, and finishes with a significantly smaller amount of people who actually purchase goods or services from the company. Businesses often use their own models of sales funnel. One of the most common one includes four stages: awareness, interest, desire, and action. That model is also often referred to as AIDA (Cespedes & Bova, 2015). Some companies, however, implement more sophisticated frameworks. For example, B2B companies would often consider using several phases after the purchase, so that could generate sales again and again with with the same client.
As with the marketing mix, there are people who argue against the importance of the sales funnel concept. One of the recent articles that gained popularity was written by Jason John. After having an experience of buying a coffee maker on the Internet, the author declared that the funneling model is dead and nowhere to be found, because in the immense amount of options, people tend to bounce from one product to another, making their own research, and choosing what they personally like. John gives an example of himself searching on the Internet for a coffee maker, than seeing advertisements of similar product, then going to a show, and eventually returning home and buying online from a different shop, because of the cheaper price (John, 2016). However, what John calls a dead funneling model, is more likely just a regular functioning model. A columnist Mark Ritson points out that “John’s coffee maker odyssey shows that his purchase is structured by a very simple set of steps. First came the awareness that he needed a new product. Next, the information search stage. He then decided his preference based on product, price and promotional offers. Finally, he made the purchase. The only step missing is his post-purchase reactions” (Ritson, 2016).
The consumer behaviour is not always easy to predict. The example of Jason John is one of them. With a wide choice of purchasing options available to consumers, the effectiveness of different online marketing campaigns depends on the product preferences and browsing behaviours of users (Lambrecht and Tucker 2013). Furthermore, for some categories of products just increasing targeting might not be helpful either (Goldfarb and Tucker, 2011). These issues of choosing right advertisements at right funneling stages led some managers to publicly question the reliability of marketing campaigns the run. For example, General Motors have canceled a campaign with Facebook that costed them $10 million, because they were uncertain if the practice was attracting any clients (Terlep, Vranica, and Raice 2012). What companies could do is identify what their potential customers’ behavior is, and at what stages of the funnel it is easier to convert them.
Although, the model works, and additional advertisement within the most of stages of the funnel increases number of visitors on companies’ websites (Hoban 2015), there are new models that gain popularity especially among technology startups. David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik describe a new model of how people make decisions regarding brands. They discovered that the process can be described in four main steps. First, people consider the range of brands they recently had contacts with. In the second step customers evaluate their wishes and then add or withdraw some brands based on that. In the third step, the consumer chooses the product at the moment of a purchase, and finally they frame their expectations for future choices. The major difference with the traditional funneling model lies in the assumption that in a sales funnel, customers start with a particular set of options, and then regularly reduce that amount until they make a purchase. In the new model that they called the consumer decision journey, consumers add and subtract choices along the way. The model is supposed to allow marketers to identify more touch points with clients, and influence their decisions. It also focuses on continuing relations with clients after the purchase in order to generate loyalty (Court, Elzinga, Mulder, & Vetvik, 2009).
John, Jason. “In Today’s Digital World, the Sales Funnel Is Dead.” AdvertisingAge. N.p., 29 Mar. 2016. Web. 2 May 2016. <http://adage.com/article/digitalnext/today-s-digital-world-sales-funnel-dead/303301/>.
“IF YOU THINK THE SALES FUNNEL IS DEAD, YOU’VE MISTAKEN TACTICS FOR STRATEGY. (2016). Marketing Week, 42.
Lambrecht, Anja and Catherine Tucker (2013), “When Does Retar geting Work? Timing Information Specificity,” Journal o f Marketing Research, 50 (October), 561-76.
Goldfarb, Avi and Catherine Tucker (2011), “Online Display Advertising: Targeting and Obtrusiveness,” Marketing Science, 30 (3), 389-404.
Terlep, Sharon, Suzanne Vranica, and Shayndi Raice (2012), “GM Says Facebook Ads Don’t Pay Off,” The Wall Street Journal, (May 15), (accessed February 17, 2015), [available at http:// www.wsj .com/articles/SB 10001424052702304192704577406 394017764460],
Cespedes, Frank V., and Tiffani Bova. “What Salespeople Need to Know About the New B2B Landscape.” Harvard Business Review. N.p., 05 Aug. 2015. Web. 02 May 2016.
HOBAN, P. R., & BUCKLIN, R. E. (2015). Effects of Internet Display Advertising in the Purchase Funnel: Model-Based Insights from a Randomized Field Experiment. Journal Of Marketing Research (JMR), 52(3), 375-393. doi:10.1509/jmr.13.0277
Court, David, Dave Elzinga, Susan Mulder, and Ole Jorgen Vetvik. “The Consumer Decision Journey.” McKinsey & Company. N.p., June 2009. Web. 02 May 2016.