Lately, I have spent time helping executives understand the concept called ‘Marketing Funnels’ and how they relate to technology. Marketing Funnels are the unique phases and stages a prospect goes through in making the buying decision. With Marketing Funnels also exists what we call the Sales Pipeline. For example, you may be reading this article right now and not be aware of who Rackless is. If you decide to later buy something from Rackless, you would have gone through several phases of buying that are within our Marketing Funnel and Sales Pipeline. The 3 major phases of a sale are:
- Lead Generation
- Lead Nurture
Creating Customers for Life
However, we can’t stop with just these 3 major phases since these 3 phases end at the point of the sale. If we stop working on client relationships at the point of the sale, we may miss the opportunity to create a customer for life.
For example, I have used the same 2 real estate agents in purchasing and selling 3 houses. The first agent is our Tennessee agent and she has helped us buy and sell 2 houses. Our 2nd agent is our Arizona agent and she has helped us buy and sell 1 house. That is a total of 6 transactions across 2 agents for an average of 3 sales per agent.
I can also speak about our mortgage banker. She has been the same banker on all 3 houses. She, too, has participated in 3 sales. I share this example of us buying and selling houses as it illustrates that our agents and banker were able to build loyalty with us and thus increase our average lifetime value. You can be assured when we sell and buy a house again, these will be the professionals we call upon.
The 5 Stages of the Marketing Funnel
Since we need to track our sales process over the life of our client, we must build on these 3 phases expanding them to include the full life of a client. Lucky for us, marketing professionals have already done this by breaking down this lifetime marketing funnel into 5 stages. Below is each stage plus other synonyms you may see used in describing the phase.
- Awareness (also referred to as Interest or Discovery)
- Consideration (also referred to as Intent, Engagement or Evaluation)
- Purchase (also referred to as Decision, Conversion or Commitment)
- Loyalty (also referred to as Retention)
Marketing Funnels in Hiring
Recently, I was reminded that Marketing Funnels can be used in more than just sales. They can be used in purchasing as well. In the example below, we see how Marketing Funnels can play an important role in hiring. At Rackless, we recently had an opening for a Support Technician in Akron, Ohio. I decided to post the job opening to both Indeed and LinkedIn.
After 3 weeks of running the job posting with Indeed and Linked, we made a hire officially filling the open position. Below are the total number of candidates that went through the hiring process along with the breakdown of stages and total costs all the way from viewing the job posting to the official hire.
- Viewed Job Posting: 529 @ $524.45 ($0.99/view)
- Applied for the Job: 76 (14.4% of Views)
- Invited to Interview by Phone: 12 (15.7% of Applicants)
- Attended the Phone Interview: 8 (66.6% of Invitees)
- Onsite Interview: 4 (50% of Phone Interview Attendees)
- DiSC Profile @ $64.95 and Background Check @ $560: 1 (25% of Onsite Interviewees)
- Offer Made and Accepted: 1 (1.3% of Applicants)
- Total Costs to Hire: $1,148.95 ($6.90/Applicant)
As you can see above, we completed the Awareness (posting the job to LinkedIn and Indeed), Consideration (performing phone and onsite interviews) and the Purchase (hiring a candidate) stages. We still have 2 more phases we must complete Loyalty and Advocacy. Loyalty and Advocacy we hope will come in time as we onboard the new hire, Sean. Once he becomes acclimated to our Rackless processes and our culture, we hope he calls us home for years to come. We do want to promote loyalty and advocacy among our team members and we feel this is why team members have remained with Rackless for years.
The Sales Pipeline
Another term often used interchangeably for a Marketing Funnel is Sales Pipeline. The difference is that a Marketing Funnel includes anonymous prospects (those visiting your website, seeing your print ads or social media). The Sales Pipeline refers to prospects once they are known. Earlier we discussed the Lead Nurture phase of the Marketing Funnel. I bring that phase up again here as often the Lead Nurture phase is measured and tracked using a Sales Pipeline. One of the features I like with LinkedIn Recruiter is they offer a pipeline for tracking your job candidates.
This job posting was just 1 example of a Marketing Funnel for just one for a specific event with a specific start date and end date. A Marketing Funnel for your business will be more complicated and nuanced. A business will also have many Marketing Funnels across multiple channels such as digital marketing, direct mail, public relations, print media, direct sales, and more. The numbers within the Marketing Funnel in most cases won’t be as clean or neat as our hiring metrics shared above, especially when your sales cycle is longer than the 3 weeks we took in hiring Sean. In our hiring example, we had 2 campaigns, Indeed and LinkedIn, that were almost identical in their pipelines so measuring this Marketing Funnel was quite simple. As you build your Marketing Funnels, you will have dozens of different campaigns and they will not always be as clean and clear cut.
Hiring a Marketing Professional
At a certain point in your business’s life, you will want expert help in this area. A well-trained marketing professional will help you and your executive team build and track these funnels. An expert marketing professional will help you identify even more possible channels to reach your target audience. If after you have hired a marketing professional, what’s the next big hire? Arguably, I feel the next logical choice after a marketing professional is a sales leader to help advance and mature your Sales Pipeline.
In closing, I hope this small example of a Marketing Funnel helped illustrate its importance. In the future, we will continue to track this Marketing Funnel for hiring to improve our performance. We will also experiment with other channels beyond Indeed and LinkedIn. If you are curious about the channel I prefer between LinkedIn and Indeed, LinkedIn won hands-down. 75% of the onsite interviews that were completed came from LinkedIn. Out of the 4 onsite interviews, we were prepared to make an offer to each of the 3 LinkedIn candidates.