THE PURCHASE FUNNEL

DEFINITION & INTRODUCTION

The purchase / purchasing funnel is a model which describes the theoretical customer
journey from the moment of first contact with your brand to the ultimate goal of a
purchase.
This model is important when marketing your business as it provides a method of
understanding and tracking the behaviour of an average customer throughout the sales
process. This can help with the following:

Planning marketing campaigns

Highlighting areas in order to improve your conversion rate (from potential to

actual customers)

Evolving the sales process

Designing customer relationship management (CRM) system

The shape, number of stages and duration of the process can vary depending on both
the consumer and the nature of the product, as well as many other factors. Many
different versions have been published, but the fundamental stages remain the same. A
funnel shape is used as is describes the natural loss of potential customers at each
stage - many people may be aware of a particular brand, but this does not mean they'll
purchase the product.
Note: The purchase funnel focuses on the decision making path of a typical consumer.
This is a different evolution of the sales funnel, which describes the typical active
process a salesman can take in order to close a potential deal.

THE MODERN PURCHASE FUNNEL:

The diagram below summarises the modern purchase funnel, taking into account the
emergence of internet research and includes post-purchase behaviour, and is explained
below.

The modern purchase funnel

1. PRE-AWARENESS

At this stage, the consumer has had no previous contact with your brand.

2. AWARENESS
People can be made aware of your brand with or without the desire to purchase.
Awareness can be based on a communications message, word of mouth or
independent discovery.

PURCHASE INTENT TRIGGER

The moment at which the consumer starts thinking about a purchase could be triggered
by an event, a change in circumstances, a pay rise, a need, or even an advertising
message.

Learn about the psychology of marketing

3. RESEARCH & FAMILIARITY

At this point, the potential customer has decided they want or need a
product similar to yours. They are likely start reading reviews, learning the
features, making comparisons, asking for opinions, and using the internet to
research their options in detail. This phase of the process can be lengthened
or shortened depending on the value of the product people are unlikely to
spend time researching economy baked beans.

4. OPINION & SHORT LIST

Decision on the most likely purchases, this could be in the form of a written
list, a mental note, or book marked websites.

5. CONSIDERATION
Deciding between the most likely purchases, taking test-drives, going to a
product demonstrations, asking the opinion of people who have already
purchased.

6. DECISION & PURCHASE

Final decision on the brand and product and whether they can afford it. Then
taking the plunge, online or in a more face to face environment.

7. BRAND / PRODUCT ADVOCATE (OR SABOTEUR)

Once the consumer has bought, they will very quickly form an opinion on the
product. Were there hidden costs? Did it scratch easily? Did it use too much
petrol? Did it go mouldy quickly? If the opinion is especially positive they
may spread the news of your brand via word of mouth promotion and
positive reviews. This process is made especially easy on the internet.

8. REPURCHASE INTENTION
It's an established marketing fact that existing customers are significantly
easier to convert than a completely new prospect, so bear this in mind when
designing your marketing strategy. At some point in the future, it is likely that
the product will need to be replaced or upgraded. If they are pleased with
their purchase, there is a high likelihood they will consider buying from you
again, but the battle isn't won yet.

PRECONCEPTIONS AND EXPERIENCE

Did the previous buy provide an excellent user experience, or break after a
month? If it broke, customers may defect to your competitors. If your
customer was happy, they may re-enter the funnel at Stage 3 - Familiarity.

FAMILIARITY
Although the customer probably has a good idea about your brand, they will
want to familiarise themselves with your current product range, and with
your competition.

OPINION
Should they upgrade to the next item in the product range, stick with the
most recent version or swap for competitor?
Now customers continue through the funnel as before, with final
considerations, a decision, and eventually a second purchase.

What is PESTLE Analysis? PESTLE analysis, which is sometimes referred as PEST

analysis, is a concept in marketing principles. Moreover, this concept is used as a tool
by companies to track the environment theyre operating in or are planning to launch a
new project/product/service etc.

PESTLE is a mnemonic which in its expanded form denotes P for Political, E for
Economic, S for Social, T for Technological, L for Legal and E for Environmental. It
gives a birds eye view of the whole environment from many different angles that one
wants to check and keep a track of while contemplating on a certain idea/plan.
The framework has undergone certain alterations, as gurus of Marketing have added
certain things like an E for Ethics to instill the element of demographics while utilizing
the framework while researching the market.
There are certain questions that one needs to ask while conducting this analysis, which
give them an idea of what things to keep in mind. They are:
What is the political situation of the country and how can it affect the industry?
What are the prevalent economic factors?
How much importance does culture has in the market and what are its
determinants?
What technological innovations are likely to pop up and affect the market
structure?
Are there any current legislations that regulate the industry or can there be any
change in the legislations for the industry?
What are the environmental concerns for the industry?
All the aspects of this technique are crucial for any industry a business might be in.
More than just understanding the market, this framework represents one of the
vertebras of the backbone of strategic management that not only defines what a
company should do, but also accounts for an organizations goals and the strategies
stringed to them.
It may be so, that the importance of each of the factors may be different to different
kinds of industries, but it is imperative to any strategy a company wants to develop that
they conduct the PESTLE analysis as it forms a much more comprehensive version of
the SWOT analysis.
It is very critical for one to understand the complete depth of each of the letters of
thePESTLE. It is as below:
1. Political: These factors determine the extent to which a government may
influence the economy or a certain industry. [For example] a government may
impose a new tax or duty due to which entire revenue generating structures of
organizations might change. Political factors include tax policies, Fiscal policy,

trade tariffs etc. that a government may levy around the fiscal year and it may
affect the business environment (economic environment) to a great extent.
2. Economic: These factors are determinants of an economys performance that
directly impacts a company and have resonating long term effects. [For example]
a rise in the inflation rate of any economy would affect the way companies price
their products and services. Adding to that, it would affect the purchasing power
of a consumer and change demand/supply models for that economy. Economic
factors include inflation rate, interest rates, foreign exchange rates, economic
growth patterns etc. It also accounts for the FDI (foreign direct investment)
depending on certain specific industries whore undergoing this analysis.
3. Social: These factors scrutinize the social environment of the market, and gauge
determinants like cultural trends, demographics, population analytics etc. An
example for this can be buying trends for Western countries like the US where
there is high demand during the Holiday season.
4. Technological: These factors pertain to innovations in technology that may
affect the operations of the industry and the market favorably or unfavorably.
This refers to automation, research and development and the amount of
technological awareness that a market possesses.
5. Legal: These factors have both external and internal sides. There are certain
laws that affect the business environment in a certain country while there are
certain policies that companies maintain for themselves. Legal analysis takes into
account both of these angles and then charts out the strategies in light of these
legislations. For example, consumer laws, safety standards, labor laws etc.
6. Environmental: These factors include all those that influence or are
determined by the surrounding environment. This aspect of the PESTLE is
crucial for certain

industries

particularly for example tourism, farming,

agriculture etc. Factors of a business environmental analysis include but are not
limited to climate, weather, geographical location, global changes in climate,
environmental offsets etc.

8Ps

The Product and its Elements

What is the product, what comes packaged with it, what need does it fulfil? Obviously, this is the central
point of your marketing, but are you marketing a single product or your whole companys range of stock or
services. This needs to be pinned down first before any further planning can be decided upon.
Place and Time
How long will it take to get a item, or complete a job. Where are you based, and how is the item to be
delivered. Speed is of the essence in the modern world, but people will wait for quality bespoke items, if
they know why they are waiting and that its worth waiting for.
Price and Other User Outlays
Never assume that a low price will mean higher profits. If you are selling quality then the price should and
will be higher than bargain basement deals, and too lower price and effect the overall view of your
company. Think about any add-ons and extras that could be included in your deals.
Promotion and Education
This very much ties in with the first P, what need is there for your product, how can you educate your
customer to understand its worth, and why they should buy the product at all, and why from you.
Process
The buying experience is becoming more and more important as the public learns to expect better
service. A poor process will lead to a poor user experience, and some very negative exposure. Letting
people know that you have strong secure customer orientated processes in place is key, buy only when
its backed up by the reality of their experience.
Physical Environment
Are your offices or shop present looking appropriately smart and well kept? This should be extended to
include any web presence. Clean, organised, pleasant surroundings will have a really good impact on
your customers view of your service.
People

Your front-line staff also strongly impact on the perceptions and experiences of your customers.
Productivity and Quality
In what way is your offering a good deal for the customer? This is less about you as a businessimproving
your own productivity for cost management, and more about how your company passes this onto its
customers. Remember that this always needs to be tied with quality; you supply the best, and use the
best products, procured fairly at the lowest cost.