• by Corinne Munchbach , January 30, 2013

There is no denying it: the marketing funnel has had a good run. But after more than a hundred years of guiding marketing decisions, it’s time for this centenarian's grip on marketing to loosen. In the 21st century, the funnel framework fails because:

• It's too linear. The explosion of pre-purchase research that consumers can do today is staggering, both in terms of how much research exists and the number of sources that are available to do it. Just say mobile or social, and the rules of linear, mass reach marketing crumble. All of these digital devices and channels have fragmented the journey in a way that the ever-narrowing, linear marketing funnel does not capture, thereby putting limits on how to view the success of a marketing effort.
• Marketing activities come before customer behaviors.  The funnel consists of four parts: Awareness, Consideration, Preference, and Purchase. All of these are outcomes that marketing seeks to drive, rather than activities to address with customers. Messages need to appeal to consumers at their stage of the journey, not based on where they fit in the purchase funnel, to make messages truly relevant. And by leaving loyalty to the bottom of the picture, the funnel fails to recognize that different customers have greater lifetime value and non-monetary impact on the business than others, and thus treats costly acquisition as a better approach than targeted retention efforts.
• Not all interaction points are created equal. There is no one-size-fits-all way to approach marketing, because today’s technology-led society has given consumers infinitely more ways to engage with the world around them -- and not surprisingly, people’s preferences aren’t all the same. The disproportionate impact of positive experiences on purchase decisions compared with media impressions should guide brands to create experiences for their customer segments across touchpoints that those segments prefer to use.

CMOs need to bid adieu to the funnel and welcome a new kid on the block: what we’re calling the customer life cycle, defined as the customers’ relationship with a brand as they continue to discover new needs, explore their options, make purchases, and engage with the product or service experience.

The customer life cycle is a better fit for modern marketing today because:

• The customer is at the center. By putting your customer at the center of marketing, priorities and budgets will change to singularly respond to customer needs. Each phase in the life cycle is about what the customer does, not what marketing seeks to achieve. Better data will propel brands forward when it comes to creating customer-obsessed marketing programs, meeting customer needs in the right location (physical and channel), with the right content, at the right time.
• It considers the complete brand experience. The life cycle encompasses the full scope of the brand experience -- from earned media to the in-store experience to the Web site -- and therefore encourages marketers to go beyond traditional activities and sales numbers, and instead focus on that whole experience, particularly customer satisfaction and engagement. Digital tools vastly expand the marketer’s arsenal for creating these superior experiences and frankly, consumers expect this high level of interaction.
• A purchase does not always (or even often) equate to loyalty. Today's smart marketers understand that a transaction isn’t an automatic recipe for positive word of mouth or a repeat sale; instead, loyalty is something that has to be earned and nurtured on an ongoing basis. The life cycle emphasizes that goodwill must be built up and continually delivered on to build successful -- and profitable -- long-term relationships.

 Switching to the customer life cycle will have far-reaching implications for the marketing strategy and the organization as a whole, as well as budgets. The focus will shift from heavy investments in acquisition to dedicated retention efforts, as customer lifetime value and loyalty grow as objectives. Internal silos dedicated to individual channels will be replaced with cohesive teams dedicated to customer segments. Media budgets will be optimized with advanced modeling that deliver messaging more effectively, regardless of touchpoint. These changes are not easily made, but they are critical to the future success of your business.