Think of the marketing funnel as a roadmap, guiding your prospects through the customer journey stages. Tracking and optimizing the marketing funnel increases your chances of turning prospects into loyal customers.
As marketers, we know that the guessing game rarely pays off: what you can't measure, you can't improve. To help you do that, we’ll go into how to track your funnel through all customer journey stages and optimize your marketing efforts accordingly.
You'll also learn things like how:
Personalized CTAs get 202 % higher conversion rates.
The red CTA button consistently beats the green one.
Pages that load in one sec convert 3x better than pages that load in five sec.
And who doesn't want that information? So, let's find out what numbers your marketing funnel is hiding!
A marketing funnel represents the stages your potential customers go through before purchasing. Prospects will enter the funnel at the top and move downwards as they advance in the customer journey, from awareness to decision. The marketing funnel aims to attract, engage, and convert leads.
You might also have heard about the B2B sales funnel, which is similar to the marketing funnel. As the names imply, the sales funnel is more sales-centric and the marketing funnel more marketing-centric.
The marketing funnel stages are typically known as top of the funnel (TOFU the awareness stage), middle of the funnel (MOFU the consideration stage), and bottom of the funnel (BOFU the decision stage) where conversion happens.
We'll go into each stage in more detail below, along with a step-by-step process for tracking and optimizing the funnel. So you can enjoy benefits like:
Stronger brand loyalty
Higher sales revenue
Efficient resource use
Sound good? Then, let's get to it.
The classic marketing funnel starts at the top, where the prospects interact with your brand for the first time, and ends at the bottom, where they (if you’ve done your job right) convert to customers.
However, any sales rep can tell you that in a real-life scenario, it's a little bit more complicated than that.
Marketing funnels can be messy. With prospects jumping from one stage to another and back again before finally converting, or sometimes leaving the funnel all along, and never coming back.
This is something we need to be aware of when tracking the marketing funnel, so we can spot the inconsistencies and optimize for more seamless customer journeys.
At the top, we want to focus on capturing the attention of potential customers and making them aware of our products or services. TOFU is all about brand recognition and getting that initial interest from your target audience.
For the TOFU stage, track metrics that can give you insights into customer behavior. For example, you want to know who's visiting your website, how they arrived there, and what content they interact with.
Here are the most important metrics to track for the top of the funnel.
Organic sessions: Measure the number of organic visitors on your website to see how effective your SEO strategy is. Keep an eye on impressions here.
Keyword performance: Track the performance of keywords to understand which ones are driving organic traffic.
Click-through rate (CTR): Monitor the CTR for organic search results to see how effective your titles and meta descriptions are.
Bounce rate: Analyze the bounce rate to understand if visitors engage with your content or leave quickly.
Paid sessions: Watch the number of visits and user activity from paid ads to understand why users stay on or leave the site.
Clicks: Track the number of clicks on your paid ads to measure the initial interest.
Ad impressions: Get insights into the reach and visibility of your ads by monitoring how many times they're displayed to potential users.
Click-through rate (CTR) for ads: Evaluate the effectiveness of your ad copy by looking at the CTR.
Cost per click (CPC): Understand how much you're paying for each click to assess the cost-effectiveness of your campaigns.
Impressions: Measure the number of times your social media content is displayed in users' feeds. This indicates your reach.
Engagement: Monitor likes, comments, shares, and clicks on your social media posts. These metrics show how users are interacting with your content.
Followers: Track the growth of your followers to see the effectiveness of your social media strategy.
Click-through rate (CTR): Calculate the percentage of clicks relative to the number of impressions. CTR tells you how effective your social media content is in generating interest.
Referral traffic: Measure the website traffic coming from social media platforms. This helps measure the impact of your social media efforts on driving website visits.
Brand mentions: Track mentions of your brand name on social media. Positive mentions contribute to brand awareness.
A classic tool like Google Analytics will do a good job tracking metrics like website traffic, click-through rates, keyword performance, and all of that good stuff mentioned above. Now, this is a solid start. The next step, however, is to track the quality of the traffic. You need to identify which marketing channels and efforts are driving the most qualified leads to prioritize your resources accordingly. That brings us to: Who's visiting your website and why? It's good to know how many website visitors you have, but it's even better to know who they are and why they're there.
You can use a tool like Leadfeeder to see exactly who is visiting your website, when, and why. Turning anonymous website traffic into real company names is impossible otherwise. Use it to identify highly qualified leads, see the content they interact with, and how they move through the customer journey. This gives you that extra information about your prospects without needing to ask them to sign a form. Also, you get to see how effective your marketing efforts have been in driving the right traffic to your website. Another good tool for tracking and optimizing in the TOFU stage is Hotjar.
(By the way, did you know you can try out Leadfeeder for free for 14 days?)
In the middle of your funnel, prospects are aware of your brand, showing interest, and considering your products or services. At this point, they might download a white paper, subscribe to your newsletter, or enter into a lead-nurturing campaign. MOFU is all about leads, generating them, qualifying them, and tracking them. Let's review the most important metrics to track here.
The number of generated leads will give you a clue as to how many potential customers are interested in your products or services. You want to track both the number of total leads generated and the number of leads from specific sources. For example, if you notice a high number of leads from a particular marketing channel, you might consider allocating more resources to that channel. On the other hand, if certain sources generate few leads, it may indicate the need for new approaches.
In the MOFU stage, most of the leads are typically marketing-qualified leads (MQLs).
To move further down the funnel, they need to be nurtured into sales-qualified leads (SQLs).
The number of leads that qualify for MQL or SQL will tell you how on-point your marketing efforts are when it comes to reaching your target audience. If the number of qualified leads is low, it's a signal that you're not attracting the right audience and need to change your approach.
CPL measures the cost of getting a lead through marketing efforts. To figure out how much each lead cost you, just divide the total marketing campaign cost by the number of leads you generated. That's your CPL.
Let's say you spend $1,000 on a marketing campaign, and it generates 100 leads. The CPL would then be $10.
A lower CPL means that your business is acquiring leads at a lower cost, which is what you want. However, it's important to consider lead quality alongside CPL to ensure that the generated leads align with the target audience and are likely to convert into customers.
Tracking signups will give you a good understanding of how interested prospects are in your products or services. You can track signups for your newsletter, a demo, or a free trial of your product.
This metric is becoming more important as we see companies move towards a product lead growth (PLG) approach, allowing prospects to test out products for free and buy on their own terms.
MOFU is the stage where many people tend to fall off the funnel so this is where it becomes crucial to track the bounce rate.
The bounce rate can help you identify the friction points preventing users from moving to the next stage of the funnel.
For example, a high bounce rate can indicate that users don't love the MOFU content you're providing. It might not be compelling enough to keep them on the page and progress through the funnel. And if your content is not resonating with potential customers' needs or interests, you want that information.
New visitors vs recurring
Last but not least, you want to be aware of the number of new vs recurring visitors. Are prospects regularly returning to your site, and if so, why? Is it to engage with your amazing content, or is it because they didn't get your message the first time?
Monitor new and recurring visitors' website behavior to see how they engage with your content. Then, use the insights to tailor your content to meet each group's specific needs.
You can also use Leadfeeder to identify and track new vs recurring visitors.
At the final stage, it's all about converting leads to customers and keeping them.
BOFU is when potential customers evaluate their options and decide whether they should buy from you or one of your competitors. When tracking this stage, the focus is on metrics like conversions, sales revenue, and retention.
Here's what to track at the bottom of the funnel:
The lead conversion rate will give you the percentage of leads that convert into customers. You should track this to see how effective our marketing efforts are in contributing to actual sales.
Marketing funnel optimization is the key to maximizing those conversions. If your lead conversion rate is low, it may indicate a need to optimize your landing pages, work more on those lead nurturing campaigns, or A/B test your call-to-action.
You should also track your lead conversion rate per source to see how effective different marketing channels are in driving conversions.
A metric all of your fellow colleagues can relate to (even those not on the marketing team) is sales revenue.
The sales revenue determines the overall success of your marketing funnel.
Monitoring your sales revenue will help you understand the success rate of your marketing channels and efforts. To find out which channels bring in the most profit, you can compare the revenue generated from different sources.
Measuring marketing funnel success lays the ground for strategic decision-making. It helps you be more data-driven, optimizes your marketing strategies, and gets the most out of your budget to maximize ROI.
Other revenue-focused metrics you need to track are:
Customer acquisition cost (CAC): how much it costs to gain a new customer.
Cost per sale: the average expense for your business to make one sale.
Return on ad spend: the revenue generated per dollar spent on advertising.
(Hockeystack is a good tool for understanding the return on ad spend.)
How valuable a customer is depends on the customer's lifetime value (CLV).
CLV represents the total income you can expect to make from a customer during your entire relationship.
You can calculate the CLV by multiplying the annual recurring revenue of the customer with the average customer lifespan. Understanding the long-term value of a customer can help you prioritize resources on retaining those high-value customers.
On the topic of retaining customers, you also want to track the retention rate, the percentage of customers a business retains over a specific period of time.
Finally, after tracking all of those metrics, it's time to show off the results in a way that's digestible for stakeholders. For making sense of complex data, Looker Studio is a great tool where you can create interactive dashboards and reports.
When measuring the marketing funnel, you empower yourself with insights. Data isn't just numbers; it's the key to understanding, optimizing, and thriving. Once you've gained those insights, turn them into strategic marketing funnel optimization. Attracting, engaging, and converting leads through each stage of the customer journey.
Begin measuring today to improve all your marketing efforts!
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