In sales, there are two different strategies that help businesses understand, plan and implement lead conversion. These are the traditional sales funnel and the lifecycle marketing method or customer journey. While some aspects of these strategies are similar, they follow a unique structure and purpose of their own.
The lifecycle marketing model is based entirely on the customer. It factors in the entire experience a customer has from beginning to end, rather than just the sales-oriented data. That includes a customer’s first awareness of a brand, their interest and investment in the brand, followed by loyalty and retention.
The sales funnel method begins much the same way but follows leads through a more analytical account of data and strategy. It factors in the changing of the customer’s mind between the initial lead stage, interest in a brand, the researching of the brand, and the final decision-making to purchase.
Some have suggested that lifecycle marketing is the best way to nurture leads, while others swear by the sales funnel. Throughout this article, you’ll gain a better understanding of the differences and similarities of these models and decide once and for all, which is best.
Depending on who you ask, the sales funnel will change in shape and title, but it stands for the same basic principle. It is a tool designed to help customers learn more about your brand so you can pique their interest and nurture connections at every stage of the game. The desired outcome of the sales funnel is customer conversion and revenue.
Before you can choose between the funnel and the customer journey model of marketing, it’s best to know the facts. Here’s what you need to know about the sales funnel.
Stages of the Sales Funnel
The stages of the funnel, like the funnel itself, are different from person to person. The most basic version includes four points of customer contact, they are:
Reasons Companies Use the Sales Funnel
The sales funnel isn’t just used to determine the best way to nurture leads. Many companies use the funnel to plan annual budgets by reviewing analytics based on each stage. The funnel also acts as an influence for future sales protocol and planning. According to Adobe, 39% of consumers will give up on a website if the site and its graphics have a long loading time. Technical SEO, which is used in the first tier of the sales funnel, could prevent this loss of traffic.
The way that customers react to various strategies, such as newsletters and social media contests, helps plan new content. Ideas that don’t pay off are then revamped or retired, and ideas that report good numbers go on to do more great work.
Lifecycle marketing (LCM), also known as the customer journey, is an overview of the customer’s sales experience from brand discovery to purchase. Much like the sales funnel, there are different stages, each with its own relevance to the success of a business.
The focus of the LCM framework is to inspire lead conversion by focusing on the customer, not the sale. To do this, companies design marketing strategies based on high-quality content. A Forbes article published in 2018 explained the importance of content over quantity. The study reported that 64% of shoppers admit they trust a brand more when they have similar ethics and standards.
Stages of Lifecycle Marketing
To better understand the customer journey, you must first look at the various stages. Here they are:
Reasons Companies Use Lifecycle Marketing
Lifecycle marketing is often used by those wishing to improve customer service within their brand. It helps businesses discover new ways to improve the customer experience, create long-term returning customers, and foster brand loyalty.
The customer journey also gives businesses the information they need to create better products and services based on customer need.
Both marketing methods have their pros and cons. While lifecycle marketing paints a picture of a harmonious consumer-retailer relationship, there’s more to sales than customer loyalty.
The sales funnel allows companies to make strategic plans and marketing goals, including implementing new types of content and ads. During the interest and research stage of the sales funnel, for example, many companies choose to publish videos. Videos help consumers learn about the product and company on a personal and visual level. A report by Tubular Insights found that consumer interest in branded videos on Facebook has grown by 258% since 2017.
On the other hand, the lifecycle model puts emphasis on customers rather than sales. One of the funnel’s marketing elements under scrutiny is paid ads. Block metry.com, a website dedicated to understanding ad blocking, tracked the percentage of U.S. ads blocked at 31.5%. That’s a lot of Americans who don’t want to see the ads being paid for by businesses across the country.
Paid advertising is part of the awareness section of the sales funnel, a stage that LCM holds dear as well. In fact, Alexa by Amazon recently reported that 88% of the budget for lifecycle marketing goes into awareness. The difference is that in the customer journey, awareness isn’t sought with financial gain in mind. So, which marketing method does it better?
There’s no right or wrong answer here. It depends on what’s important to you as a marketer or business owner. If collecting new customers and converting leads quickly and efficiently is your goal, then the traditional sales funnel is your best choice. If you’re in for a long-term conversion with a focus on repeat customers, the lifecycle marketing model is for you.
If you came to this article hoping for a clear-cut decision on which method to use, there is a solution. While there are some major differences between the customer journey and the traditional sales funnel, there’s also a lot of overlap. The titles might have changed, but ultimately, each step of these two marketing plans is looking for the same outcome, lead conversion and retention. The only real separation is in the approach.
You can scour the internet and find analytics telling you that both sides of this spectrum are right. The sales funnel was first implemented by E St. Elmo Lewis in 1898, and the customer journey is more recent. As years go on, each is sure to continue evolving, so why not combine them and take the best of both marketing methods?
The sales funnel works; it’s been proven time and again, but there’s something to be said for good customer service. A sales funnel with the consumer in mind could be just the ticket to success.
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