Commentary
The Death Of The Purchase Funnel
- by Gord Hotchkiss , Featured Contributor, June 21, 2012
A recent series of three posts on the Harvard Business Review blog by Karen Freeman, Patrick Spenner and Anna Bird explored some of the myths about how consumers make decisions. I think each of these has direct implications for search marketers, so over the next three weeks I want to explore them one at a time.
The first, titled “What Do Consumers Really Want? Simplicity,” talks about the breakdown of the purchase funnel. The HBR bloggers contend the funnel, which has been around for well over a hundred years, no longer applies to consumer behaviors. I concur, and said as much in my book, “The BuyerSphere Project.”
We differ a little on the reason for the demise, however. The HBR team credits the demise to cognitive overload on the part of the consumer. We’re simply bombarded by too much information on the purchase path to fit it all into the nice, simple, rational filtering process captured in St. Elmo Lewis’s elegant funnel-shaped model. The accompanying research, a survey of 7,000 consumers, shows decision simplicity was the number-one thing people wanted when making a purchase.
I agree that information overload is part of it, but I also believe that two other factors have led to the end of the purchase funnel. First, the purchase funnel assumes a rational filtering of options based on careful consideration of a consumer’s requirements. I don’t think this was ever the case. Emotions drive our decisions, and more often than not, rationality is applied after the fact to justify our choices. Prior to the Internet, emotion was tough to distinguish from rationality, as buyers didn’t have much control over the content they accessed during the consideration process. They were limited to whatever the marketer pushed out at them. So, whether driven by emotion or logic, they tended to go down the same path and display many of the same behaviors. Given the pervasive believe in humans as rational animals at the time, it was not surprising that a logic-driven model emerged.
The other factor, as I alluded to, was that the Internet shifted the balance of power during the purchase process. Suddenly, we could choose which paths we took during the consideration process. We weren’t all forced down the same path, according to some arbitrary notion of a funnel-shaped model.
What became clear, when consumers could choose their own path, was that the simplicity of the funnel model bore little relation to the actual paths consumers took. And those paths were driven by emotion. People bounced all around, depending on what they were looking to buy. They could go all the way to a shopping cart, then suddenly abandon it and go back to a destination that would be considered “upper funnel” and start all over again. From the outside looking in, this resembled a bowl of spaghetti much more than it did a funnel.
So, we have a trio of suspects in the death of the purchasing funnel: cognitive overload, emotion trumping logic, and consumers gaining more control over their consideration path. All lead to an interesting concept to consider: laying an online path that anticipates the emotional needs of the buyer, and yet keeps the information presented from overwhelming them. For example, marketing has traditionally taken a “turf war” approach to persuading a prospect: “as long as they’re on our turf, we do everything possible to close the sale.
But this doesn’t really match up with the three trends we’re talking about. What online consumers are looking for, according to the HBR research, is a safe online zone that will make their decision easier. Rather than going from site to site, collecting information and filtering out overt marketing hyperbole, what consumers want is a single information source they can trust. They want to be able to lower their “anti-BS” shields, because being a rational, cynical shopper takes a lot of time and effort.
Today, it’s extremely rare to find that trustworthy information on a site you can actually purchase from, but it’s starting to happen in some high activity categories, where independent portals facilitate this simplified approach to shopping. Travel comes to mind.
But let’s consider what would happen if a brand’s website took this approach. Rather than bombard a prospect with exaggerated sales pitches, putting them on the defensive, what if a more neutral, objective experience was provided? After all, why shouldn’t the decision path be built on your own turf, giving you a home field advantage?
Lovely post - although must bang my beer stein in disagreement on a few points.
First: the "purchase funnel" wasn't designed by St. Elmo Lewis. The mental model of a funnel wasn't introduced until the 60's. With Lewis, and possibly before him, Frank Dukesmith - the model was a basic way of showing sales people that buyers have to go through certain stages.
Dukesmith had a few different ways of illustrating the point: one was nested buckets, and another was a scale in which each of the elements had to be in proper proportion for a sale to take place.
Now, I know the above is some business history quibbling - but still, the idea, for instance, that consumers must go from unaware to aware is a pretty fundamental truth. Someone can't buy from you if they don't know you exist.
To your point - that buying decisions are more complex - you're quite right. We've seen some other models by Gartner and Edelman's David Armano that illustrate how complex those decisions can be. But AIDA still demonstrates an overarching set of steps that consumers traverse.
Thanks for the elucidation on the history of the funnel Ric. The problem I have with models, AIDA included, is that while they may be correct, they also over-simplify reality, causing marketers to over simplify their strategies. This is particularly dangerous in a market in transition, as is the current case.
This one sentence sums it up for me. "They want to be able to lower their “anti-BS” shields, because being a rational, cynical shopper takes a lot of time and effort." I have seen too many example of customers researching a purchase to death - literately. With way too much marketing information readily available, conflicting social reviews and complex pricing models between vendors, I have seen people abandon hours of research to come back to it all at a much later date.
you can't seem to make up your mind - is "purchase" an emotional-driven decision or logic-driven one? an interesting topic, and take, from the field of Search,,,which has not a scintilla of emotion to it.
FWIW - the funnel is a progression, not a "path"
The idea of a "funnel" developed by observation of how people move from unaware to purchasing a product. It recognizes reality that many people consider, then reject a product. That's the way people work. Some corporations (aided by ad agency naïveté) have shifted from this to some idea that they can "drive the consumer through the funnel". Ain't gonna happen - and never did. In reality, considering consumer activity leading to purchase a "funnel" is even MORE useful in the world of new media than it was in the old. It should lead us to consider how people move to purchase decision and each communication/engagement should be designed around knowledge of where in the funnel it's most useful. My god. When we will stop this silly "it's all changed" stuff? Consumers are people. And Proverbs tells us what we need to know: there's nothing new under the sun. Just a constant need to look at it freshly to be certain that we are doing things that are effective.