Opinions expressed by Entrepreneur the contributors are their own.
Your marketing funnel is the process your potential customers go through as they move from learning about your product or service to buying. The funnel narrows at each stage, from the many people who know about your brand to the few who actually buy from you. Understanding your marketing funnel is essential to improve results and drive conversions.
Let’s say you are trying to increase sales. You need to understand how your marketing funnel works so you can make changes that lead to more sales. Here are four steps you can take to analyze your marketing funnel and improve results:
Define the stages of your marketing funnel
Set conversion goals for each stage
Identify bottlenecks in your funnel
Test and experiment to improve results
Let’s take a closer look at each of these steps so you can use them in your own business:
Related: How to generate interest at each stage of the marketing funnel
1. Define the stages of your marketing funnel
The first step is to define the stages of your marketing funnel. This will vary depending on your business, but most funnels include the following stages:
Awareness: Potential customers become aware of your product or service.
Interest: Potential customers are interested in your product or service and want to know more.
Consideration: Potential customers are considering your product or service and comparing it to other options.
Purchase: Potential customers buy your product or service.
Loyalty/Defense: Customers who buy your product or service become brand advocates and promote your business to others.
There are other variations of this model, but this is a good place to start. Once you’ve defined the stages of your funnel, you can move on to step two.
2. Set conversion goals for each stage
The second step is to set conversion goals for each stage of the marketing funnel. These goals must be realistic and achievable based on historical data and current circumstances. For example, if you know that 2% of people who know about your brand will eventually buy from you, then you can set a goal of increasing that number to 3%. Once you’ve set conversion goals for each stage, you can move on to step three.
3. Identify bottlenecks in your funnel
The third step is to identify any bottlenecks in your marketing funnel that are preventing potential customers from moving on to the next stage of the funnel. Common bottlenecks include:
Lack of awareness: Potential customers don’t know about your product or service because they haven’t been exposed to your marketing messages.
Solution: Increase advertising and create more compelling content that speaks directly to the needs of your target audience.
Lack of interest: Potential customers aren’t interested in your product or service because it doesn’t solve their problems or meet their needs.
Solution: Review your message and positioning to make sure you are speaking directly to the needs of your target audience.
Lack of consideration: Potential customers aren’t considering your product or service because they don’t know enough about it.
Solution: Create more content that educates potential customers about the features and benefits of your product or service.
Failure to purchase: Potential customers don’t buy your product or service because they don’t see the value in it.
Solution: Review prices, packaging and positioning; consider offering discounts or other incentives; adjust messaging accordingly.
4. Test and experiment to improve the results
The final step is to test different messages, offers, channels, etc., to see what leads potential customers down the path to purchase. Try different tactics and track the results so you can continue to do more of what works and less of what doesn’t. Remember, it is important to always be testing and experimenting so that you can continue to improve the results.
Related: How to Create a Marketing Funnel That Increases Sales and Profits
By following these four steps, you can gain a better understanding of how your marketing funnel works and make changes that will drive more sales. Of course, following these four steps regularly (perhaps quarterly) you can ensure that any changes made throughout the year really have an impact on ROI come budget time.