Marketers love the funnel. Campaigns are organized around it. Sales and marketing teams are built around it. A copious number of slides are created to explain it to non-marketing peers. Clearly it’s an obsession.
But let’s pause for a moment and ask the question: Does this “funnel” construct still hold up?
The notion of the sales and marketing funnel is old, perhaps over 100 years old. At its heart, the funnel acknowledges that not all prospects and leads — warm or cold — will become customers, and is built on the assumption that the only way to reach the right people (those who will ultimately convert) is to cast a wide net. Most people in the target audience ignore marketing messages, while a few will proceed onward down the funnel.
But nowadays, marketing has become very good at zeroing in on those most likely to take action — particularly in financial services. We can tell who they are, thanks to prospecting models that are both plentiful and sophisticated.
There are also more ways to reach high-value prospects now than ever before. The same kind of addressable capabilities marketers enjoy with direct mail are now also available in digital channels. And we aren’t just talking about email either. This applies to online banner ads and paid social media placements. Addressable video delivered through connected TV devices like Roku and Amazon Fire TV offer big screen impact associated with driving awareness.
Which leads to the next point. If we can identify and talk directly to the people who we’re likely to reach the bottom of the funnel, then the notion of casting a wide net seems pointless, right? That means the funnel is dead.
From Funnel to Journey
In an age of complete addressability, a more useful marketing framework is the customer journey — a collection of touchpoints that move the most likely converts down the path to becoming customers.
If you think about it, a customer journey is really like a funnel flipped on its side. Likely prospects might need one or more “awareness touches”, followed by “education touches” to penetrate the consideration phase, and then “offer touches” to incentivize conversion.
The funnel model must manage non-addressable touches vs. addressable touches separately — e.g., marketing messages disseminated on mass media like broadcast TV are managed and tracked separately from direct marketing campaigns circulated by mail or email. A journey mindset orchestrates all touchpoints for an addressable prospect on a seamless continuum.
With a journey mindset, an financial marketer can be better prepared to deploy campaign decisioning tools that can customize touchpoints based on a prospect’s data profile and behavior.
A funnel model optimizes marketing spend by funnel layer because it can’t connect the touchpoints for a prospect from one layer to the next. A journey mindset sets a cost-to-acquire threshold for each segment and optimizes marketing investment at the segment level, or the individual prospect level, if campaign automation is enabled.
While the funnel model assumes that prospects will inevitably drop out between steps, a journey mindset puts the marketer is in control; the marketer can choose to end marketing to prospects — e.g., those that are unresponsive, or those who have met a cost threshold.
And finally, the funnel model has difficulty scaling marketing, driven by the massive investment needed to generate huge volumes of cheap, non-targeted impressions. Mass media is typically bought up front and segmented at the channel level based on little more than assumed media preferences. But a journey mindset can scale marketing spend up or down according to the size of each segment or a segment’s propensity to convert. A journey mindset can also scale the number and nature of touchpoints to accommodate the unique path to purchase for each line of business.
Flipping the Script
When an organization flips the funnel on its side and adopts a journey-mindset, amazing things can happen. But making this kind of a shift in thinking requires more than just vision.
Financial marketing departments will need to restructure themselves away from the funnel model. Funnel layers have different owners, objectives, KPIs and incentives than those in a journey mindset. Such legacy artifacts can thwart integrated marketing plans aiming to deliver a more coordinated, orchestrated journey. For financial services, this is a troublesome reality.
A structure designed to support a journey mindset might organize teams around important customer segments. In this model, each team is accountable for the end-to-end customer experience and how well the journey as designed meets acquisition, customer value and retention goals.
Marketers will also need to embrace customer centricity to a greater degree — understanding each segment’s motivations, behaviors, objections and barriers as they progress along their journeys. These are the building blocks for key moments along the journey that should be informed by market research, customer data, website and call center funnel analysis, and marketing performance data.
The choice of audience targeting platform matters as well. Successful marketers are moving away from cookie-based platforms that use proxies to identify people in their prospect lists. Rather, they are exploring high-fidelity addressable platforms based on login IDs, which offer the advantage of closed-loop exposure and response reporting.
So how about you? Is your organization on its way to journey-driven marketing? Or are you still escaping the pull of the funnel?
Jay Wells is a digital strategist at Merkle, where he advises financial service and insurance clients on people-based marketing. You can connect with Jay on LinkedIn.