Monday, August 10, 2009

The Map is not the Terrain: Marketing Analysis and the Non-Linear Funnel

The conceptual model of a funnel is a great one for understanding buyer stages. At the top of the funnel is the broadest universe of suspects who may at some point have an interest in your product or services, but currently do not show significant interest. There are usually the largest number of these potential buyers, hence it being the widest part of the funnel. Further down the funnel, closer to being an actual buyer, interest levels increase while, in most cases, the number of individuals decreases.

Marketing’s overall role is to facilitate the buying process, through which people progress from mildly interested to active buyers. Lead nurturing is the process that we use, and we think in terms of how that nurturing builds awareness, interest, and then purchase consideration. As such, the funnel forms a great representation of the situation, and acts as a very good map. However, as with any map, it is only a representation of the situation, and is not exact.

The biggest difference in the B2B marketing realm is in the linearity of the buying process. The map that a funnel represents is often taken to be linear. Buyers progress through a buying process as neatly as one can draw a funnel, moving through increasing levels of interest, and then ultimately purchasing. However, this is not a reflection of reality. Realistically, most buyers move up and down the funnel in a very non-linear manner.

For many months or years, a potential buyer might move in and out of being interested, occasionally showing a brief spurt of interest, and then falling back into being inactive for long periods. At certain points, a deep amount of research and a significant amount of activity may show that a buyer has moved much further along in their buying process, but then can be followed by a quiet period as internal business changes temporarily pause the project that had led to the heightened interest. This can lead to a perception of a leaky funnel as leads that may seem almost ready for sales shift back to an earlier phase in their buying process.

Overall, the funnel model works; generally buyers progress through increasing levels of interest towards purchase. However, at an individual buyer level, the movement is much less linear. This leads to the challenges with defining a “perfect path” as talked about earlier, each individual passes through a unique path towards purchase, making it impossible to define a single path that can push a buying decision.

Similarly, this non-linearity means that the most workable way of looking at marketing analysis looks at the marketing funnel from the top down. By analyzing a funnel from a top-down perspective, you can see high level trends in terms of how healthy your marketing funnel is, and whether buyers are moving in the right direction within it, but you are not constrained by the behaviors of individual buyers, which may be much less linear.

Much like a map providing an accurate description of terrain when viewed from a high level, but missing the details at a more micro level, a funnel is a great model of the marketing analysis terrain from a high level, but is not an exact view of individual buyers’ behavior. This is a concept worth keeping in mind in designing nurturing programs - one can't assume that buyers progress linearly down a funnel, so one can't sequence marketing content in that order. Instead, buyers at each stage should be nurtured in a way that is specific to that stage, but watched for signs that they are progressing to more advanced stages.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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