An Intro to Digital Marketing Funnels: Creation, Stages, Optimization and More

Each person in your brand’s audience has specific interests, habits, preferences and experiences — which can be hard to pin down because they shift over time.

Brands that stay updated with these changes will survive market shifts and grow more profitable than the competition. That’s why your business needs a strategy to monitor consumer behavior and adjust to it.

The digital marketing funnel is simultaneously a concept and a tool that demystifies what your customers want all year round. In this guide, you’ll learn what a digital marketing funnel is, how to create one and how to make it work for your business.

What is a digital marketing funnel?

A digital marketing funnel is a visual representation of the customer’s journey from discovering your brand to becoming a prospect to making a purchase. For most businesses, the digital marketing stages are: Awareness, consideration, conversion and loyalty. As a funnel, it starts with many prospects at the top; fewer make it to the end.

Why digital marketing funnels matter

Too many business owners jump into market research and pay-per-click (PPC) advertising before understanding the ultimate point of marketing. You probably understand the goal is to attract the right customers and cultivate enough desire for your products — but do you know precisely how to tick these boxes?

Digital marketing is all about targeting, reaching, tracking and tweaking. Digital marketing funnels are a framework that simplifies how to tick each box and get an individual closer to buying.

A digital marketing funnel tracks and maps prospects’ journeys. It lets you identify touchpoints that move prospects through the various stages of the funnel.

In addition, a digital marketing conversion funnel will help you:

• Better segment your audience, which results in more effective marketing. Here’s an example from email marketing: On average, segmented emails have 30% more opens and 50% more clickthroughs than unsegmented emails, according to the 2024 HubSpot marketing report.
• Use company resources more effectively since you’ll serve the right prospects with the best information at the perfect time in the correct channels. This minimizes resource wastage on prospects who aren’t that interested yet.
• Increase customer loyalty by facilitating personalization; 62% of business leaders agree that personalization improves customer retention.
• Raise conversion rates since audience segmentation and personalization techniques allow you to recognize more lucrative leads that convert faster.

The stages of digital marketing funnels

Typically, there are four digital marketing funnel stages. Let’s look at their roles in the buyer journey and how you can implement them in your business.

Awareness stage

The main goal of creating awareness is introducing your business to your target audience.

One way to do this is by establishing yourself as an authority and making your brand memorable by providing helpful information. That’s why content marketing is highly effective at the awareness stage.

For instance, a web hosting company could create video content and blog posts breaking down popular hosting options and the use cases they’re best suited for. Users reading these posts are naturally introduced to the hosting company’s services.

Other effective methods for creating brand awareness include:

• Forums: Answer market-specific questions on forums like Reddit and Quora.
• Events: Speak at events your primary audience attends. Alternatively, host your own event.
• Paid advertising: Run paid ads on search engines and social media platforms to onboard people into your digital marketing funnel.

Consideration stage

Customers in this stage understand the basic information. They have started researching and comparing brands to weigh their options. Provide prospects with details of how your products are a better solution than other options.

Approaches vary between industries, but popular formats include:

• Case studies: Demonstrate how your product worked well for distinct types of ideal clients.
• Customer reviews and testimonials: Show prospects why customers feel positive about your products.
• Comparison charts: Persuasively display how your product stacks up against the competition.

Conversion stage

At this stage, a prospect can turn into a customer who decides to buy from your business because they believe it’s the right solution to their problem. To succeed, you must remove obstacles and increase incentives.

Common obstacles include an overly complex checkout experience and poor customer service. In contrast, incentives include:

• Free trials, if your product requires a paid plan.
• Discount pricing strategies to create urgency.
• Coupons that help customers save money.

Loyalty stage

A conversion is not the end of the customer journey. Fostering a relationship with customers helps you inexpensively convert them again in the future. This is great because converting a new customer is costly compared to keeping existing ones happy.

More importantly, fostering customer relationships creates loyalty. Loyal customers will recommend your brand, leading more people into your digital marketing funnel.

Here are a few ways to encourage brand loyalty:

• Referral programs: Incentivize customers to recommend your business to their friends.
• After-sales customer experience: A great tutorial and customer service will keep buyers happy.

Most businesses typically incorporate the digital marketing funnel stages above. For an alternative way to look at it, consider the following framework:

• Top-of-funnel (ToFu) content: In this stage, focus on creating awareness and attracting many relevant prospects. It’s not about selling anything; it’s about creating content that informs and educates your audience.
• Middle-of-funnel (MoFu) content: Prospects in this stage are aware of their specific problem and are trying to find a solution. Marketing material that addresses this stage should focus on proving your solution best fits them.
• Bottom-of-funnel (BoFu) content: In this stage, focus on converting prospects and retaining customers. Content that addresses this stage should highlight benefits and offer incentives.

Now that you have a theoretical understanding, let’s jump into the hands-on steps involved.

How to create a digital marketing funnel

1. Set your goals.
2. Identify your target audience.
3. Choose your marketing channels.
4. Create awareness.
5. Capture lead contact information.
6. Create educational content.
7. Convert your leads.
8. Measure performance and optimize the process.
9. Maintain communication with customers.

The in-depth explanations of each step will give you a clearer picture.

Set your goals

Goals underpin your entire digital marketing funnel strategy. They center your marketing activities on specific objectives and set expectations for you and your team.

General goals in digital marketing include:

• Generating more leads by increasing brand awareness.
• Boosting social media engagement by improving content quality.
• Improving your website’s conversion rate to gain buyers.

Identify your target audience

Your target audience is the specific group of people who would be most interested in your products and services.

Understanding your target audience will facilitate decision-making as you create your digital marketing conversion funnel. Plus, you’ll be able to improve communication with customers and build long-lasting relationships.

Define a target audience in terms of qualities like:

• Gender.
• Age.
• Interests.
• Behavior.
• Location.
• Intentions.

Choose your marketing channels

Marketing mediums are the platforms you’ll use to promote your products and services to potential clients. Using more than one medium widens the range of potential customers you reach.

Examples of popular marketing mediums include:

• Email marketing, which has a return on investment (ROI) of $36 for every dollar spent — higher than any other medium.
• Social media marketing, which is the most common platform for influencer marketing.
• Video, which 91% of businesses use for marketing in 2023.
• Affiliate marketing, which is typically executed via blogs.

If used correctly and creatively, any medium is viable to create brand awareness, boost engagement and foster customer relationships.

Create awareness

Introduce your business to your target audience. Practically, this can look like:

• Running PPC ads on platforms like Meta and Google.
• Launching affiliate marketing campaigns.
• Conducting search engine optimization (SEO).
• Creating informative video content, blog posts or infographics.

Capture lead contact information

Separate the wheat from the chaff; customers who leave you their information show stronger intent, meaning they’re more likely to convert. These are the people you’ll prioritize engaging and nurturing to become customers.

Some effective ways of capturing lead information include:

• Using lead magnets — like free eBooks or webinars — to provide value in exchange for the contact information.
• Using minimized form fields. Prospects will voluntarily enter their information if they believe you’ll be helpful to them in the future. However, keeping form fields to a minimum is crucial.

Create educational content

Educational content shows the audience what your products will do for them. To address the decision-making stage in your digital marketing funnel, influence leads’ choices by highlighting your product’s unique selling points.

Educational content is best suited to formats like case studies and white papers.

Convert your leads

There are many ways to turn prospects into paying customers. For starters, try using personalized communication. Direct message, call or email prospects to deliver customized offers.

If your product is sophisticated, schedule a demo to show prospects what they’ll accomplish and how easily.

Measure performance and optimize the process

Quantifying your performance reveals the success of a digital marketing strategy and helps identify areas of improvement.

A few essential metrics you can track include:

• Cost per acquisition (CPA).
• Website traffic.
• Click-through rate (CTA).

Once you draw some conclusions, it’s time to optimize, which means making tweaks that could work better. Give the changes some time and then review the stats again.

Maintain communication with customers

After converting a prospect, it’s important to maintain communication and engage them. Keeping your brand at the top of their minds will lead to repeat purchases.

Maintain communication by:

• Offering after-sales support.
• Requesting feedback.
• Running retargeting PPC campaigns.

How to optimize the stages of digital marketing funnels

Any business’s funnel can become highly effective. The key lies in optimizing and curating content so each funnel stage has the highest possible impact. The steps below will help you optimize your digital marketing funnel.

Create more brand value

Brand value attracts buyers and raises your profitability.

To start increasing your brand value, create new products that complement existing products. This promotes loyalty by encouraging customers to stick to your brand throughout their experience.

For instance, Apple’s AirPods and Apple Watch complement the iPhone. Fans of one product will likely be users of the others.

Innovate your existing products. Innovating gives existing customers the thrill of a new product and keeps them desiring more. This is why Apple releases improved versions of the iPhone every year.

Understand your audience

Consistently deepen your understanding of user experience and intent so you can serve your audience more relevant content at each stage.

Know your ideal leads enough to create different buyer personas, which factor into better content, a more effective checkout process and uniquely compelling CTAs.

Here are more ways to understand your audience better:

• Evaluate user feedback to learn how prospects feel about your products.
• Conduct surveys using tools like SurveyMonkey and Typeform.
• Assess customer support notes to understand the problems your customers face.
• Reevaluate your choice of platform and medium; are they favorites for your ideal buyer?

Measuring the success of your marketing funnel

Measuring the success of your digital marketing funnel is the first step to figuring out what’s working and what needs to be improved.

First, ensure your objective is specific, measurable, attainable, relevant and timely. For instance, imagine your goal is to increase sales in the next year by 10%. With that in mind, you’d track metrics that paint a picture of your progress toward that goal.

Since a huge part of measuring involves analyzing vast amounts of data, you need an analytics tool like Google Analytics or Clicky.

With Google Analytics, you can view metrics like:

• Customer lifetime value (CLV): The approximate amount a customer is expected to purchase throughout the lifetime of your business relationship.
• Cost per acquisition (CPA): How much your business spends to acquire one new customer. This figure is essential for calculating a return on investment.
• Conversion rate (CR): The ratio of visitors completing a desired action compared to the total number of visitors. It tells you whether your website traffic is turning into leads.
• Clickthrough rate (CTR): The percentage of people who clicked on something — compared to the total number of people who saw it. CTR is commonly used to measure the effectiveness of PPC ads.
• Return on investment (ROI): The difference between the money spent on a digital marketing campaign versus how much it earned you. In other words, is what you’re doing profitable?

Best practices for lead generation and conversion

Below are a few tips to bolster your lead generation efforts and increase conversions.

Create high-quality content

For content to be considered high-quality, it has to be helpful, accurate, timely and comprehensively address reader pain points. Satisfied readers are likely to become brand advocates, increasing your visibility.

Here are steps you can follow to produce high-quality content:

• Understand search intent and include a relevant call to action (CTA).
• Experiment with new formats that enhance the reading experience.
• Thoroughly research trends and queries, then create a list of content ideas.
• Use info from experts to cultivate trust and authority.
• Achieve uniqueness by adding your personal perspective and experiences.

Implement an SEO strategy

SEO improves your website’s ranking on search engine result pages (SERPs). With a good SEO strategy, you can assert yourself as a reliable authority in your niche and widen your reach.

There are two types of SEO your digital marketing conversion funnel will benefit from:

• On-page SEO: Optimizing each webpage’s source code and content so users and search engines easily understand what the page offers. Content optimization includes effectively using keywords, experimenting with titles and providing meta tags.
• Off-page SEO: Includes tasks like link-building, guest blogging and influencer marketing, which take place on other people’s websites. The main goal is to gain search engines’ and readers’ trust.

Run lead generation ads

Lead generation ads let you reach people directly on platforms like social media as long as you target keywords with specific user intent.

Before you start running lead generation ads, make sure you:

• Define your target audience.
• Have an objective. Outline what you hope to achieve with your campaign.
• Have a clear value proposition. Tell your audience what you’re selling.
• Have a compelling CTA.

Final thoughts: Intro to digital marketing funnels

Now you know the best practices for creating awareness and feeding your marketing funnel with the prospects you need to make sales and generate revenue.

While popular strategies like SEO and PPC are great ways of attracting customers, nailing the granular details is what makes them effective. A lot goes into creating killer content and setting up campaigns, which can be overwhelming for business owners.

Bluehost’s digital marketing service can eliminate the anxiety and stress in this process. We provide a personalized team of experts that boost your online authority, brand awareness and conversion efficacy. Let us help with SEO and PPC.