It’s no surprise that customer acquisition is a top priority for growth-minded businesses. After all, it’s pretty hard to grow a business without customers. The challenge for most businesses, however, is developing an effective customer acquisition funnel.
In theory, a customer acquisition funnel is just a process for attracting buyers and converting them into customers. But that’s easier said than done, because of one great, big, monstrous variable...
Marketing.
An effective customer acquisition funnel fuels growth when it produces profitable, repeatable, consistent results. And, let’s face it, few businesses would characterize their marketing efforts with those words. But there is hope!
In this article, we’ll explore a new approach to the customer acquisition funnel. A simple growth marketing framework that eliminates guesswork so you can scale your business profitably and predictably.
What is a Customer Acquisition Funnel?
Customer acquisition simply refers to the process of converting strangers into customers. The traditional customer acquisition funnel breaks this process down into a series of consecutive stages, allowing brands to create marketing strategies for each.
What are the stages of the customer acquisition funnel?
A typical customer acquisition funnel is divided into the 3 stages of the buyer journey:
- Awareness Stage – Buyer becomes aware of their problem or need.
- Consideration Stage – Buyer researches and evaluates their options.
- Decision Stage – Buyer chooses a solution and makes a purchase.
The pool of potential buyers is largest in the first stage, and narrows in each of the next stages. Consistent with the narrowing shape of a funnel, the stages are also referred to as top-of-funnel, middle-of-funnel, and bottom-of-funnel.
Is the Customer Acquisition Funnel Broken?
The strength of the traditional customer acquisition funnel is in its customer-centric approach. When brands focus on Awareness, Consideration, and Decision, their marketing becomes less about them—and more about their customers. However, the traditional funnel still doesn’t address the number one reason most marketing fails.
Why does most marketing fail?
Most marketing campaigns fail to generate meaningful results because they rely on guesswork.
Too often, marketing strategy is little more than a plan to promote a company’s offerings through various tactics and channels—paid ads, social media, email campaigns, blogging—and hope for the best.
At Brand Theory, we call these “random acts of marketing.” Without a framework that directly aligns marketing activities with customer acquisition targets and revenue goals, companies are simply flying blind. With no growth system for prioritizing, measuring, testing and validating what’s working and what’s not—a profitable, repeatable customer acquisition funnel is impossible.
That’s where growth marketing comes in.
What is Growth Marketing?
Growth marketing is a data-driven framework for scaling profitable customer acquisition.
In growth marketing, the customer acquisition funnel doesn’t just represent the journey a buyer takes from awareness to purchase—it represents the flow of revenue.
With growth marketing, revenue is directly tied to awareness, lead generation, sales opportunities, customer retention and referrals. Each of these growth “levers” work together to drive customer acquisition and profitable growth.
A smart growth marketing strategy assigns the right marketing activities to each growth lever, sets goals for each one, and continuously tracks them as key growth metrics.
With the right marketing activities, focused on the right growth levers, with the right metrics, growth marketing provides the means to continuously improve results. In other words, it removes guesswork and puts companies in control of their marketing, and their growth.
Growth marketing has its own funnel. Also called a pipeline, it’s a series of steps in the process of customer acquisition AND revenue generation.
6 Steps of the Growth Marketing Funnel
The customer acquisition funnel in growth marketing is more of a linear process than an inverted triangle. Often called the customer acquisition pipeline, it consists of 6 stages. Each stage represents a key performance indicator (KPI) in the growth marketing framework.
The stages of the growth marketing pipeline:
- Awareness: from stranger to website visitor
- Acquisition: becomes a marketing qualified lead (MQL)
- Activation: becomes a sales qualified lead (SQL)
- Revenue: becomes a customer
- Retention: a repeat customer via upsell, resell or cross-sell
- Referral: new customers referred by existing customers
The key to putting a smart growth framework into practice is to start in the right place. It’s tempting to dive right into marketing activities, website redesigns, or technology upgrades—but without the proper foundation and a systematic approach to building a customer acquisition pipeline, they’ll still be random acts of marketing.
Scaling Profitable Customer Acquisition
Whether you’re ready to create a customer acquisition funnel that drives company growth or just have a few questions, a no-pressure SmartGrowth Session with Brand Theory is a great first step.
Before you invest in random acts of marketing, take 30 minutes to learn how a smart growth marketing framework is the proven path to scaling profitable customer acquisition. Learn how to take the guesswork out of marketing and get a free growth game plan tailored to your business goals.
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