Commentary

Funnel Experiences

We often think about email and eCRM as "end of the funnel" activities. It makes sense on the surface; you would assume you have some established relationship with the consumer or business before you send them an email -- an opt-in, at minimum.

But the consumer experience is not linear. In fact, the front- and back-of-the-funnel experiences are often interchangeable. Lifecycle marketing in its simplest form is predicated on this linear view, but in reality, a lifecycle is a series of peak and valleys of brand involvement. Some companies take lifecycle marketing from a purely product-centric view, where a customer enters and exits based on usage patterns. Those with that view typically have a very specific take on the customer funnel: There is awareness, acquisition, potentially cultivation of the lead, potential activation depending on the service/product, conversion, retention, loyalty and win-back.

This has been the standard view for decades in the direct marketing space. The challenge with this linear view is, it is hard to organize around pieces of a customer experience without losing sight of the complete experience. Most companies can't define a complete customer experience with any scale. There are too many segments, too many intersections, too many channels, far too much data to make sense of, and they have fragmented parts of the organization that own a different section. For example, you may have one department that owns acquisition from the household marketing level, and another that owns acquisition from the search, site and media channels. You may have a CRM group that owns retention marketing and another that is focused on servicing the loyalty programs.

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On the other end, you may try to mobilize around lifestage marketing. By this I mean building out core market segments and identifying how your customers intersect with your product at various lifestages. This becomes a very complicated story to build. Companies like Fisher Price, Baby Center and some of the pharma companies are dedicated to lifestage marketing. It is valuable on many levels. It enables you to identify consumers when they are ready to make brand decisions. For instance, most contact lens multipurpose solutions brand decisions are made or influenced at the time of an eye exam. The bottles are on the shelf, there are usually recommendations from professionals on what types to use, and at times there are free trials of some products. You'd obviously want to maximize the influence in or around the annual doctor exam and reinforce it with stimuli (TV, POS).

Now consider potential switch points! When do consumers move off brand? What makes them buy a cheaper multipurpose solution? Is it lifecycle or lifestage? Lifestage marketing in this instance would identify classes of consumers and try to understand events in their lives that may dictate some change in spending, view of the brand, convenience and reliance on influencers. For example, college students often switch to generic contact lens solutions when they go to school and have to fund their own cosmetics and daily needs. New parents shift to a new view of thrift, as do people making major investments (such as buying a new home). Each dictates a potential shift in degrees of brand involvement.

Now, lifestage marketing doesn't replace a funnel view of a customer, product or organization, but it does force you to begin to consider and mobilize around key events, not product releases: key lifestages and shifts among the active generations that your products serve are not purely transactional events. Funnel marketing is marketing in the past to predict the future. Lifestage marketing is building hypotheses and predictions about the future shifts in market, consumer demand and life circumstances that can influence brand involvement.

We love the concept of a marketing funnel, and we'll likely never move away from it as a baseline for customer value. But continuing to think of customer experiences in terms of funnel movement will put great stress on your ability to keep up. The new social consumer is changing, the rules of the game are changing, the experience is becoming more fragmented -- and loyalty is being challenged daily. Your customers are getting younger (new audiences) and older, and if you want to evolve your brand loyalty and drive purchasing habits, you'll have to recognize the funnel isn't linear. Lifestage marketing will challenge your traditional thinking, challenge how you organize programs, how you put value on the customer today, and how you predict value for the future.

Isn't it a fun space?

2 comments about "Funnel Experiences".
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  1. David Iwanow from Marktplaats.nl, September 21, 2009 at 12:52 p.m.

    Wow, placing the value of a consumer/customer that will last beyond the current marketing manager is certain to catch on but it requires a rethink.

    This long-term customer value is something that only larger advertisers are beginning to correctly measure online using web analytics/eCRM packages. Even then they only seem to be allocating a budget for events/promotions based on a estimated percentage not a known customer value.

    It is also interesting about the switch points such as moves to college and how touch points can influence how quickly they will return to your brand from the generic. If you spend money in direct vs online how does this shift future demand and brand involvement?

    While it is a very smart move I assume that a move to a stage of lifestage marketing would require a rethink of current KPIs and business goals. Currently business seems to take this lifetime value as extra profit if they continue as clients/customers beyond the first purchase.

    Many organisations don't correctly related long term value of a customer so to move towards a non-linar model would require support from board members & company owners who plan past the next pay cheque.

  2. Theresa Quintanilla from QViews, September 21, 2009 at 10:55 p.m.

    Lifestage marketing also pulls you away from viewing purchase frequency as the be-all of loyalty. My small business customers don't have a large marketing aparatus to reconfigure, but they do need better reasons to converse with their customers, and this article is a good one to get them thinking. Thanks!

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