Redesigning acronym of Attention, Interest, Desire and Action.

Redesigning Sales Funnel

Udit Shah                                                                                                                      
Abhishek Pal

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The origin of the concept of Sales funnel was brought by
American Sales and Advertising Pioneer E. St. Elmo Lewis when he introduced the
concept of AIDA which is acronym of Attention, Interest, Desire and Action.
Since its conception, the concept of sales funnel has undergone various
modifications and changes in 100 years. Sales funnel is visualized
representation of customer journey, a step wise process of customer from
awareness of product/service to final purchase. In general, these 4 stages are
crucial in sales funnel:

 

Awareness – In this stage, the customer comes into
acquaintance of the solution offered in the form of product or service. When
customer comes into touch with the solution for the first time and he/she is
now aware of the offering made.

Interest – The target prospect actively seeks for the
solutions being offered and right content is the key to attract the prospect in
this stage. Subscription to Website, Social media page and understanding more
of the product or service offered comes under this stage.

Decision – The stage where prospect takes choice of
utilizing the offer proposed. In this stage, comparisons of offers and
evaluation of choices take place to understand to make the final decision.
Different offers in terms of discount, merchandises and coupons are given to
let prospect make positive choice.

“It’s important to decide on what types of leads you want at
the middle & bottom of your sales funnel.” -Chris Knipper

Action – The stage when prospect becomes customer by
accepting the offer made. It can be in terms of clicking the purchase button on
ecommerce store or signing the contract offered.

The additional stages of Post purchase and Re purchase are
also present.

Revision of the concept

The Sales Funnel served as central concept of Sales and Marketing
since many years, however owning to great change in consumer behaviour patterns
and technological advancements, the concept traced before World War II has been
modified and redesigned. Customers are more informed, empowered with choices
and connected than ever. The digital age comprising of social media and mobile
clicks to drive sales has highly changed the journey of prospects. Mark
Bonchek, Founder of Shift Thinking and Cara France, CEO of The Sage Group in
their HBR article “Marketing can no longer rely on Funnel” claim that the
marketers across many multinational organizations like Google, SAP, Visa,
Twitter and Intuit agree to the fact that the customer journey is no longer
linear and step wise as per the model of Sales Funnel. Some strong opinions
like “Sales Funnel is not rapidly changing but it is utterly dead” by Jason
John, CMO of Publishers Clearing house has led to many discussions and
revisions of the concept of Sales Funnel. Additionally the concept of Sales
Funnel has received frictions in B to B segment due to its underlying
assumptions:

•             Everyone
follows linear path from top to bottom

•             At a
time, only one person is present in the journey

Mckinsey proposed in 2009 that the model of the Sales Force
was over simplistic and realistic view of customer journey was not obtained. To
bring on the structural change, evaluation was carried out of the decisions of
purchased by 20000 consumers across three continents and five industries. The
survey confirmed that the journey of the consumers in no longer linear, but
rather circular. It comprises of multiple touch points offered and
opportunities that are communicated to the buyer.

 

A new model was then proposed by Mckinsey which is updation
of Sales funnel version and which rightly explains the Consumer Decision
Journey (CDJ).

 

Figure 1: McKinsey’s 2009 CDJ model

 

 Main drivers of
influencing  new perspective were:

•             1.
Increased brand exposure

Cognitive load felt by consumers has exponentially increased
due to fragmentation of media into various channels like web, mobile, e
commerce as well as offline retail combined with the depth of product
offerings. The decision making process gets complex and hence only limited
brands receive attention of consumers.

•             2.
Emergence of “pull” marketing tactics

Shift from “Push” to “Pull” marketing strategies involving
innovative PR campaigns, strategies to propagate Word of Mouth, search engine
optimization lead the customers to journey to and fro the traditional Sales funnel
steps. A study initiated by Google, of consumers in Baking sector in France led
to the observation that only 44% consumers purchased from brand considered
initially.

•             3.
Increased consumer-driven research

A large amount of data and availability of pre search tools
have made consumers very informed. The comparisons of the offerings made by
multiple players can be done with a click which assists customers in buying
decision.

 

Original CDJ version was modified to accelerated CDJ version
by Mckinsey due to driving force of Big Data and emergence of new tools to
assist Sales and Marketing experts to utilize big data for driving customer
decision.

 

Figure 2: McKinsey’s 2015 CDJ model

 

According to Mckinsey, mainly 4 factors drive any company’s
ability to utilize accelerated CDJ to drive sales process.

1. Automation of the sales process

•             This
helps in making sales process engaging and simple in nature. Use of analytical
tools and predictive techniques coupled with rich content can work in big way
to render sales conversions

2. Proactive personalization

•             Personalization
has been driving factor for gaining competitive advantage. This process is
rightly carried out by Facebook and Amazon and it helps to measure ROI and know
new customers.

3. Contextual interaction

“Content is fire. Social Media is gasoline” -Jay Baer

•             Ability
of the firm to understand the stage where the consumer is present can be known
using data analytics and hence the integrated channels should deliver
communication in accordance to the stage of customer journey.

4. Journey innovation

“That which is measured improves.” -Karl Pearson

•             It’s 4
times less costly to sell present customers than acquire newer targets.
Exacaster, a big data predictive analytics company, uses machine-learning algorithms
to initiate marketing campaigns that are informed by real-time triggers based
on a complex set of rules.

 

Integrated channel communication

Contrary to our previous discussion, the sales funnel is not
quite dead. What has happened is the fragmentation of the touch points that a
customer passes through the sale.

So an integrated channel approach is needed to tackle such
problem of rapidly shifting consumer interest. Here weightage is given to all
channels depending on the traffic they provide. A channel generating a less
amount of customer landing may be optimized for more leads while a channel with
a high bounce rate ( when consumer visit the page but leave without making any
purchase) may be optimised for higher impression and retention as well as the
conversion of final sale. As we can see that there is no particular funnel
being used all the marketing activities as changed in response to the changing
consumer behavior.

This is where big data and analytics comes in, by analyzing
consumer buying habits one can plan beforehand what channels to target and what
kind of results (Awareness, sale etc) can be expected from them. Consider
learning about your clients’ psychographics. Study their behaviors, habits, and
lifestyles. Learn how they spend their money and time. This not only involves
studying customer before the purchase but long after sales as well. For example
tracking his reviews, ratings as well as his customer support history. Make
your product such that it doesn’t require any ratings to sell and zero customer
support after the sale.

Sectors – Redesigning the Funnel, Sector Wise

Identifying the right customer today doesn’t cut the bill
today now you also have to identify the wrong customer as well, the sales
funnel should not only let the wanted customer in but filter unwanted customers
out. For example, a person who is planning to buy a Ford, it’s easy for Tata to
convert a customer who is looking to buy a Tata rather than trying to convert
the Ford “type” of person.

So a sector-wise breakup of the sales funnel of companies in
a broad way can be seen as following

1.            Automobile
sector: this sector behaves differently as a car is a slow-moving item and once
purchased the customer generally doesn’t want to buy one in near future. So
what the focus should be the customer in the latter part of the funnel and make
sure they get converted or at least get associated with the brand in some way
or the other. The associated customer can then be offered the product at a
later time through exchanges or similar offers.

2.            Medicine:
the main aim of a medical company is not to wish for problems but instead
identify them early on and correct it. So a typical sales funnel will be the
first action, for example, free checkups can be arranged, after that decision
should be taken based on that checkup. If the decision is positive then an
interest is created in the customer awareness. So here the customer is made
aware of the product (ie the healthcare company offerings) in the end while the
action is taken in the beginning. 

3.            B2B: B2B
relations are long lasting as there is often customized need with strict time
constraints. So, to lure such customers to the company, first the funnel for
competitors should be looked upon to identify their shortcomings, as finding
fresh customers is difficult in B2B scene, one should always improve themselves
more than the other so that customers can be associated with the brand more.
This is known as customer retention, one should focus more on retaining present
customers more rather than try to gather so many customer that managing them
becomes a daunting task.