bottom-funnel

Underneath the Funnel

  |  December 21, 2012   |  Comments

How social data flips and extends the purchase funnel.

The traditional purchase funnel hasn't changed much since its invention in 1898. Although there are many different versions of it, the basic "AIDA" model (awareness>interest>desire>action) remains the same:

  • Awareness. The traditional digital customer funnel starts at creating product awareness through impression-based display advertising and sponsorships.
  • Interest. The consumer continues down the purchase path when consumers demonstrate intent through behavioral and contextual signals. Those consumers can be targeted using a large variety of pre-packaged third-party segments.
  • Desire. Digital marketers capture a user's desire, when they demonstrate affinity by clicking on an ad or visiting a product's website. These consumers can be reached digitally through retargeting.
  • Action. Finally, the consumer purchases the product, at which point she "drops out of the funnel."

top-funnel

Until recently, once the consumer entered the company's CRM, she was marketed to in a more traditional way, via email, postal mail, and telemarketing. In the case of digital media tactics, the consumer could reasonably be expected to be bombarded with retargeting ads for the remainder of her life (or, until she cleared her cookies), but that was the extent of things. Fast-forward a few years, and all of a sudden Salesforce and Oracle are snatching up social media and measurement companies like they were going out of style. As I was writing my recent report on data management, I wondered: did they see this?

bottom-funnel

The perfect storm of advanced, extensible CRM platform technology, near ubiquitous availability and scale of social signals, and ability to activate first-party data has extended the purchase funnel. Once the consumer "drops through," the real action starts.

  • Joins. Once in the customer database (CRM), the post-purchase journey starts with a commitment beyond the sale, when a consumer joins an email list or signs up for special offers on the company's site.
  • Likes. The next step is an expression of social interest, when the consumer agrees to make public her "like" for a company or brand by "friending" a company's Facebook page, or following a company's Twitter account.
  • Recommends. Beyond the like or follow is true social activation, wherein the consumer actively (not passively) recommends the product or service, through commenting, sharing, or other active social behaviors, thus showing her brand affinity.
  • Sells. The final step is having the consumer sell on your behalf (directly via affiliate programs or, in the softer sense, as a "brand ambassador").

To navigate the consumer from brand awareness, all the way through to actually selling on behalf of a brand takes an understanding of data and its application to each step in the journey. The most successful companies leveraging this new inverted funnel paradigm are aligning their first-party CRM data with social affinity data to get a 360-degree view of their typical consumer - and modeling against that view to produce repeatable marketing outcomes.

What does that mean? It's not enough to understand your brand's core demographic (e.g., male, aged 25-36, single family home, income >$125,000). That data is important, and you can certainly make somewhat efficient digital media decisions with it. Once that person expresses "desire" by visiting your website, you can certainly retarget her. And, once she finally purchases, you can pretend you "own" her, and deploy the various traditional CRM marketing tactics to create return purchases. All well and good.

The challenge is getting that person to like you back, and mutually engage with your brand. Once she is in your CRM, are you prepared to deliver new content to her via social media channels? Can you find the linkages between her and her Internet friends, and get downstream of her activity via social affinity signals? Ultimately, can you create enough incentive, through affiliate programs, social gaming, couponing, or other active programs, to enable her to actually sell on your behalf? That is today's digital marketing challenge - and it resides inside an integrated social CRM.

That's why Salesforce bought Radian6 and Buddy Media, and why Oracle bought Vitrue and Involver. It will take some time for these new social data tools to get properly embedded into the traditional CRM, and even longer for marketers to get adept at leveraging them at scale - but we're now living in an inverted funnel world. Be prepared to turn your thinking about digital marketing upside down.

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ABOUT THE AUTHOR

Chris O'Hara

Chris O'Hara is an ad technology executive, and the author of "Best Practices in Digital Display Media," a contributor to ClickZ, and the author of the new whitepaper "Best Practices in Data Management." He can be reached through his blog at www.chrisohara.com

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