Commentary

The Funnel Isn't Dead -- It Just Went On A Diet

I took a day off recently to do some wine tasting in the Santa Rita Hills outside of Santa Barbara. Perhaps it was because I was visiting Fess Parker’s vineyard that, as I observed the swirling, sniffing and sipping of wine, my thoughts turned to the similarities between wine tasting and media consumption. Or maybe I’m just terrible at actually taking a day off.

Despite the fact that people are consuming more media than ever (just as we are consuming more wine than ever), we are consuming it in smaller chunks. The legacy broadcasters, publishers and news organizations were built on providing consumers in-depth, well-produced, quality content. But we’re seeing less time being spent with traditional channels as people shift to more digital versus linear experiences.

Today we’re consuming more YouTube videos, Snaps, Tweets and Facebook Instant Articles. These smaller bits of content, much of it user-generated with lower production values, creates an environment where the total experience is less important and people become focused on smaller, incremental distractions -- in essence, snacking on content.

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What we haven’t paid as much attention to is that we’re also snacking on product purchases. Everyone is choosing their own path purchase. In the tasting room people were sampling their wine in a variety of ways; from standing at the tasting counters tasting the basic wines to lounging in a relaxed setting for an “enhanced” experience with higher quality wines. When it comes to any type of purchase, some dive right in with little or no information, others require a bit more time and prodding.

We observe this behavior in today’s purchase journey. The discussion about the viability of the purchase funnel was reignited recently by Jason John, CMO of Publishers Clearing House. John wrote in Ad Age: ”The sales funnel isn't changing -- it's completely and utterly dead. Today's shopper jumps in and out of channels, views alternatives to purchases, and searches for better deals -- all at the tap of a screen, the click of a button, and oftentimes while standing right in front of the item she's trying to buy.

Mark Ritson, Adjunct Professor at Melbourne Business School, took issue with John’s position by pointing out that he conflated the tactics used to communicate with consumers throughout the journey, with the journey itself. Ritson reminds us that the journey refers to the steps in the process of deciding to buy a product, not about how one is influenced throughout the journey.

As a refresh: The way the funnel works — supported by decades of documented sales information — is that the number of people who buy a product is less than the number of those who have interest in the product, which is less than the number of people who are aware of the product. That hasn’t changed (if you have sales data that proves different, please share in the comments). What has changed is both how and how fast consumers move through the funnel.

In reality, the funnel isn’t dead; it has simply narrowed. With the immediacy and always-on nature of digital media, how we process and react to advertising has changed. Consumers are increasingly jumping straight from awareness to action, moving almost instantaneously through the interest and desire phase.

The journey that John described to demonstrate the death of the funnel described a need identification that took him online to in-store to mobile, back to online to make a purchase.

But as brands like Amazon continue to grow, one is just as likely to recognize a need, go online to research and hit the buy button in a matter of minutes, a snacking experience. This will continue as the risk to impulse purchases declines (think Zappos and free returns).

Google calls them micro-moments. You can’t buy a brand without being aware of it, and you won’t purchase if you don’t want it.
We don’t need to reinvent the purchase journey. We have to cede control of the message to the consumer (by the way, they’ve already taken it) and make sure we’re having the conversation they want to have when they’re ready. If we do, they’ll keep coming back for the latest vintage.

3 comments about "The Funnel Isn't Dead -- It Just Went On A Diet".
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  1. Dan Collins from gkv, June 16, 2017 at 10:09 a.m.

    What is a little bit ironic is that the funnel focused us on evaluating and improving our "conversion rates", which is the same discipline that we are using today. I suspect that people have always had different shaped funnels, we just generalized them before because we didn't have the information we have today.

  2. Beth Donnelly Egan from Syracuse University replied, June 16, 2017 at 10:19 a.m.

    Agree Dan!

  3. Scott Turner from DataLaborTechnology, June 16, 2017 at 11:04 a.m.

    Not many know the sales funnel theorybwas first introduce in 1898 by E.St. Elmo Lewis. True story! More recently Northwestern's Spiegel Research Center did great work redefining the Sales Funnel as the Consumer Engagement Engine http://bit.ly/2siVqko

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