Where's The Value In My Sales Funnel?

Let's say you come home one day with of those newfangled AeroGarden things (they're really cool, seriously) so you can grow a bounty of fresh herbs, leafy lettuce and chubby tomatoes in your kitchen with little fuss. As you're snapping on the mini hydroponic lighting system you pause and think: "Self, just why did you buy this thing? Did you really need a mini greenhouse on your countertop?"

It's likely that the folks at AeroGarden know just how you got there. First, they bought a hell of a lot of mass media to help you become aware of the product. Maybe they even snapped up some print space in airline magazine to target high-income travelers. Then, once they were content that you were aware of the product, they hoped you surfed your way to to read the advertorial content that would link you effortlessly to an online store.

Pushing (or "supporting" as marketers would prefer us to say) consumers through the "sales funnel" is, after all, a marketer's primary function. Because no medium can be everything to everyone, planning for the funnel often requires differing messages delivered across distinct channels. For example, at the top of the funnel, marketers may construct a message to capture the attention of the intended audience and lift brand awareness, while at the bottom they may to craft messaging that will lead to an actual purchase.

A month ago, we released a whitepaper that looked at the value of word-of-mouth (WOM) media through the lens of standard CPM measurement. Our conclusion: Factors such as opt-in participation, deep engagement and two-way dialogue justify a $300 CPM for this medium.

As a continuation in our series of "valuing WOM"-themed whitepapers, we've taken a look at the relative impact of WOM throughout the purchase funnel. One challenge marketers face today is understanding which media are most effective for a particular stage of consumer consideration. This decision ultimately comes down to determining the value the medium provides compared to other options. This really can be reduced to three basic questions:

1) At what point in the purchase funnel does WOM provide the most value?

2) How does that WOM spend compare to other potential marketing vehicles at the same spot within the funnel?

3) What medium has the most "lasting value," or does a personal recommendation at any stage of the funnel have a greater--or lesser--ability to lead to a sale at the bottom of the funnel?

To answer these questions, we associated different stages of the funnel with types of media buys and their expected results. We then compared these findings to the spend and expected results associated with a WOM media buy. Our data suggests that WOM creates a purchase intent of 10-15%, so we ask the industry: How much would a marketer need to invest other media to realize a comparable purchase intent?

So if you find yourself standing over your own AeroGarden, you might want to contemplate exactly what brought you to this point. Just how many different ads did you see, and how did they help you realize you simply had to have one? Or was it ultimately a recommendation that made you believe you just had grow plants without so much as touching topsoil?

"Self," you might say, "it's a good thing I really love salad."

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