Over the past few years, marketers have been dealing with an economic and social environment that has been volatile, uncertain and complex.
We are all responding to unforeseen macro-economic trends and competitive forces while having to stay on top of changing customer expectations and behaviours. Not to mention trying to keep up with the pace of change in the tools and technology emerging daily (hello AI!).
And while some companies have increased their marketing budgets for this new financial year, others are being asked to do more with the same budget as last year, or in some cases, even less. It feels like an uneven playing field.
If a business views marketing as simply a cost centre, then budgets will always be at risk. To help change that mindset and to see marketing as a lever for growth and something worth investing in, we need to be able to link our activity to the financial outcomes the leadership team cares about.
Earlier this year, I sat down with Serena Humphries, our Finance Director, to talk about how to build bridges between finance and marketing teams. And one of the things we spoke about was measuring what matters across the entire customer funnel.
Doing this takes time and a combined effort from marketing, sales and finance to identify the right metrics and put tools and platforms in place to capture the right data – but it’s worth it if you want your business to grow.
What is full-funnel marketing?
Full-funnel marketing is a comprehensive approach to marketing that aims to guide potential customers through the entire customer journey, from the initial awareness stage to the final conversion or purchase. It focuses on nurturing leads and building relationships at every stage of the marketing funnel, which typically consists of three main stages: top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU).
Top of the funnel (TOFU)
This stage is about creating brand awareness and attracting a broad audience. The goal is to capture the attention of potential customers who may not be familiar with your brand or product. Common tactics at this stage include content marketing, social media advertising, SEO, and display advertising.
Middle of the funnel (MOFU)
In this stage, the focus is on engaging and educating the leads generated from the top of the funnel. The goal is to move them closer to making a purchase decision. Tactics used at this stage include lead nurturing through email marketing, targeted content, webinars, case studies, and providing valuable information to address their specific needs and concerns.
Bottom of the funnel (BOFU)
This is the final stage of the funnel, where leads are encouraged to convert into paying customers. The focus is on providing persuasive and compelling reasons to make a purchase. Tactics employed at this stage include personalised offers, product demos, customer testimonials, free trials, and remarketing ads.
Full-funnel marketing recognises that different individuals are at various stages of the customer journey and tailors marketing strategies and tactics accordingly. By adopting a holistic approach, businesses can build relationships, establish trust, and provide value at each stage, thereby increasing the likelihood of conversions and long-term customer loyalty.
The importance of a full-funnel marketing measurement framework
Having a cohesive digital strategy and creative approach to marketing across the entire funnel, from brand building activity to supporting customers as they explore and evaluate options to making the moment of conversion as easy as possible, can create trust with your customers and accelerate the journey from buying trigger to purchase.
A full-funnel marketing measurement framework with the metrics of success tailored to each stage of the funnel and the activity you’re doing there gives marketers a comprehensive understanding of what’s working and the data they need to make better decisions around their strategies and tactics.
It can help marketers prioritise what channels and activities they will focus on and which ones they can stop – allocating resources to the ones that will have the biggest impact on business outcomes.
And beyond just helping the organisation, a full-funnel approach provides a better customer experience. With a better understanding of the different ways customers interact with the brand you can identify and address pain points, provide more personalised messaging and improve user experience for better satisfaction and moving people faster through the buying process.
Key components of a full-funnel marketing measurement framework
There are a few foundational elements you need to have in place before you start to build your full-funnel marketing measurement framework.
An understanding of the customer journey
This is the first place to start. You want to understand what event triggers them to move from a passive state to an active buying mode. How do your customers find out about the solutions to the challenges they face and what channels do they use to research or ask for advice?
How do they explore and evaluate the options available, what content do they consume and how do they interact with your company during this time? Follow it all the way to the end so you understand what the sales process is like and how long it takes.
Clarity around drop-off rates across the funnel
Once you’ve identified the different interactions, go into the data and map out the conversion rates from one stage of the funnel to the next. Use data from your digital platforms, CRM and offline channels to help you get a full picture of where the holes in your pipeline are.
Use the funnel to set objectives
Once you know your drop off rates, you can set clear objectives for each stage. Ideally, you would start at the bottom and work your way up as there’s little sense in filling the top of your funnel with more people if you know that a hefty percentage of them will fall out halfway or two-thirds of the way through.
If you use SMART objectives, you should be clear on the KPIs and targets for the activity from the beginning. You can set objectives for how you want to change people’s attitudes at the top of the funnel and their behaviour as they move through each stage.
Don’t rely on digital attribution alone
There are different attribution models that measure the contributions each marketing touchpoint and channel have in driving conversions and revenue. The common models include first-touch, last-touch, linear, time decay and more advanced ‘data-driven’ models that are becoming commonplace in platforms such as Google Analytics 4, using machine learning algorithms to distribute credit for conversions.
The problem with focusing solely on digital attribution, whichever method you try, is that it’s incredibly unreliable.
- Advertising doesn’t always deliver an immediate result, especially if you work in B2B with long sales cycles. Digital attribution can’t tell you if an advert seen nine months prior is what led to today’s search engine query.
- Digital attribution masks the variety of channels and devices people use in their exploration and evaluation stages. So both last-touch and first-touch attribution will be completely inaccurate.
- It can only show the steps in the purchase journey, not what influenced the journey in the first place. We need to dig deeper to understand the triggers that switch people into buying mode.
- As the name suggests, digital attribution only accounts for the digital side of things, but we all live hybrid lives, with influence coming from both online and offline events and content.
- Often, digital attribution leads brands to over-invest in short-term sales activation at the expense of brand building, when all the data shows that to ensure demand for your product and services tomorrow, you need to be implementing long-term brand activity.
So what should brands do instead? They should take a blended approach by combining attribution data with media mix modelling (also known as econometrics), and run controlled experiments to identify what works best for your brand.
Measuring what matters across the marketing funnel
Once you have a clear understanding of how your customer moves through the marketing funnel and you have SMART objectives set, you’re ready to start setting up metrics and reports.
Measuring brand awareness
What you want to quantify at this stage is the impact of your marketing activity on the consciousness of the audience. It’s about introducing your brand and then regularly refreshing people’s memories so they remember you exist and that their perceptions of your brand are the ones you intended.
Brand awareness metrics here are softer, leading indicators – they measure attitudes or beliefs that may influence future behaviour.
Brand surveys can help you measure campaign awareness, which channels or media have had the greatest impact, the degree to which the activity is linked to your brand, overall brand awareness, brand perceptions and attitudes towards your brand.
Outside of brand surveys, there are two metrics that can be used as a proxy for brand awareness:
- Share of Search, which has been found to be a leading indicator of market share, is a metric that shows how well a specific brand is doing in comparison to their competitors in terms of searches for brand names.
- Branded clicks, as seen through Google Search Console, can be used when the brand and its competitors aren’t large enough for a Share of Search report. People clicking on brand terms can help indicate awareness
It’s unlikely that you’ll be able to tie these metrics to a financial outcome, but it’s still worth tracking overtime because you should start to see correlations between your brand building activity and the impact on sales activation. It should get faster and more affordable to convert sales further down the funnel by laying the groundwork of awareness activity.
Measuring exploration and evaluation
Once people have encountered a buying trigger, they move into an active mode of exploring and evaluating options. The key is for your brand to be present here across both paid and organic channels so that you remain visible and relevant as customers create a shortlist and move toward a purchase decision.
During this stage, we can look at actual behaviour metrics which are more closely linked to the commercial outcomes of the business.
Offline metrics for B2C brands may rely on panel-based data collected by market research companies, but both B2C and B2B firms can capture offline activity in their CRM with proper training and commitment to good data hygiene.
Digital channels are also able to capture a wide range of behavioural metrics at this stage. The key is choosing which ones can link to financial outcomes.
Metrics that are useful at this stage include:
- Customer loyalty, measured by repeat visits
- Penetration, visits from new customers
- Offline footfall to your store or online traffic to your website
- Engagement rates, compared across different channels or creative
- Cost per click (CPC) or cost per thousand impressions (CPM)
- Click through rate (CTR) across different campaigns
- Cost per lead (CPL) or cost per action (CPA)
- Event interactions, such as PDF downloads, video views and event sign ups
- Audience list size, including newsletter list, email subscribers and social followers
These metrics should have a stronger link to the financial outcomes of the business.
Ultimately, what we want to track is the marketing activity that leads to a sale: an ecommerce transaction or a repeat purchase for B2C and closed-won deals and contract renewals for B2B.
But there are a few other conversion metrics that are valuable to track along the way that can help you optimise your marketing efforts.
For B2C, this may include online form submissions like account registrations or requests for more information for higher-priced purchases. It may also be app installs and in-app actions or store visits and in-store conversions like loyalty programme sign ups.
For B2B, this is where it’s important to track leads generated by different marketing campaigns or channels, the sales qualified leads and opportunities taken forward.
If you want to elevate the perception of marketing at your company, it’s important to build a full-funnel marketing measurement framework that ties back to the financial outcomes leadership cares about. It will show you what’s working that you should invest more in as well as what isn’t working that you can de-prioritise.
If you’d like more information on how to build a full-funnel marketing measurement framework, or if you need help pulling the key components together, we’d love to speak with you. Get in touch today.