insight

Commentary

The Fall Of The Funnel

The digital revolution has been a disruptive force storming through the traditional framings of marketing now for many years. As the reference implies, we have experienced a fundamental and sweeping shift in power and perception -- from brand-centric marketing push to the long predicted customer-centric information pull.

The "Marketing Funnel" -- a long standing iconic monument of marketing thinking -- has been increasingly called into question by the revolution over the last few years. As we pick through the rubble of the recession, the most recent holiday shopping season and the smartphone shockwave, I think it's safe to say the mostly linear flow of the funnel has finally faltered.

New Behavior

Armed with multiple, interactive, shared and self driven channels of information, today's customer drives where, when and how they get their marketing:

  • Forrester predicts 2011 to be a turning point year for location-based marketing
  • Oracle/ATG reported in March this year that an average of 48% of all U.S. adults are using their phones to research products on-the-go, and 29% have made a purchase via phone
  • A March 2011 Aberdeen study cited poor channel integration and slow social adoption as crippling to loyalty programs -- customers are seeing the inconsistency
  • A recent Deloitte survey revealed that 9 in 10 marketers are using social networks to catch the roughly 4 in 10 shoppers sifting through prices, recommendations, reviews and coupons there
  • A January 2011 study by Motorola revealed that 55% of retailers believed customers were better armed with information on products and prices than they were

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Amidst this steady pipeline of clues, we find the consumer bouncing from brand to brand, serendipitously engaging and disengaging, driving active research, recommending, criticizing, asking for lifelines, visiting aggregators, watching influencers, Doppel-Shopping (buying online at one store while standing in another) and departing degree by degree from the predictable sanctity of the funnel.

In short, they are plumbing their own path to purchase.

While some of the rationale "Awareness, Consideration, Preference, Action, Loyalty" references of the funnel may still be in play, the generally linear and predictable Funnel framework no longer applies. The funnel isn't up to the abuse of this erratic, "customer in charge" behavior.

New Thinking

What is needed is a new model to better reflect the un-funneled consumer behavior of today. We need to put the consumer at the center of a sphere of experiences that make up a purchase or transaction -- a sphere we're calling the "Decision Space."

The Decision Space is made up of a collection of contacts a consumer could have with a brand. Those contacts may vary based on typical shopper behavior for a category. Each contact represents important factual needs and emotional desires a customer may have at points before, during and after a purchase.

The combination and order of these contacts are in the control of the consumer, who may enter and exit the decision space multiple times in their relationship with a brand.

Our job is to assess the contacts within the space and identify key opportunities or potential gaps we need to address to optimize the consumer's experience. We want to help them on their pursuits for information and ultimately purchase (or repurchase). We also seek to spark inspiration for deepening engagement and endorsement. Because the entire experience is now sharable, all contacts have become more important considerations in our assessment.

Overall, it's a simpler, "point-in-time" model that has made it easier for us to think of the full experience without forcing a sequence of events. This makes it a much better reflection of real consumer behavior.

New Frontier

We expect to continually refine and improve how we use and articulate the Decision Space. So far, we've found it has been an effective way to provide integrated thinking that better links channels and communications. Social and mobile concepts are thought of together with direct mail and local execution. POS concepts start to have more relevance. Web UX and search strategies gain a new dimension of consideration. And the need for synchronized data is well represented too.

A recent Forrester report, "Customer Life-Cycle Marketing Demands New Metrics, February, 2011" by Luca S. Paderni, outlines how marketing performance can be tied to new measures more relevant to a Decision Space view. Things like "comparisons conducted" or "recommendation volume" (among other metrics) better reflect a non-linear model. As we work to reframe our marketing world, it's clear we're all in this together and we can't lose sight of our driving cause to make more successful interaction between customers and brands.

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