The Future of Digital Acquisition Series: Part 3
Importance of the Top and the Middle of the marketing funnel in driving Acquisitions
6 Steptember 2021
With data providing brands with real-time information on customers’ needs and aspirations, it was getting easier to convert users at the bottom of the funnel, saving all the money brands would’ve spent building the brand. It’s a sound short term strategy, probably for brands who are not looking at customer acquisition from a long term monetary viability. Simply put, you’re paying to acquire customers, which impacts your overall absolute returns. Brands make long term profits by getting customers to buy things once, then buying again and bringing their friends along. This organic growth in customer acquisition is next to impossible to achieve if there is no top of the mind recall, no brand preference, or no loyalty. Brands will find it hard to achieve this by solely focusing on lower-funnel tactics, the short-term strategy.
It’s better to have the right performance indicators and objectives clearly assigned to all parts of the funnel than ignoring them completely. For example, Awareness should not be held accountable for creating conversations but for the sole purpose of capturing the share of mind. Creating conversations is the objective of conversational platforms like social media, where our focus should be on getting as many conversations going as possible. Traffic to websites and engagements on conversational platforms could also be the focus areas for this part of the funnel. While acquisitions are a part of the bottom of the funnel, they can also happen during other parts of the consumer journey as well, however, it’ll be considered secondary for other parts. The ecosystem built by creating awareness and building conversations is then pushed by acquisition channels but hitting the high-intent users with the right message and converting them.
The whole point of building an ecosystem by capturing all parts of the funnel is to improve the intent among the potential customers which we can convert using acquisition channels - and sometimes they’ll come on their own, which is what any brand should be after. But this is not something that can happen overnight, or even over days and months. It takes a significant amount of time for a brand to become an everyday household name, depending on the “cool factor”, the use case, and the quality of the product being offered. Personally, I have encountered conversations where some marketers would question the returns from a big TV campaign they did, and while it had some uplifts in overall sales, it was not sustainable. The crucial questions to be asked here are, was this the first campaign ever, and how often do you do something with mass awareness? If a single TV campaign resulted in uplifting your sales, it means you need to do it more often to sustain the momentum to a point where the uplifted number becomes your benchmark.
It was sometime around 2012 when one of the banking clients I used to service came up with an interesting problem. In 2009, this bank decided to go digital, which also meant moving most of their marketing budgets to online platforms. Initially, it was 10% on digital, and in about 4 years the budget share of digital marketing became 70%, and 90% in the next 2 years. This helped them improve their conversion rates significantly, and also win some awards. Now the problem was, even when the conversion rates were significantly better, the absolute amount of conversion volumes went down gradually. Think about it like this, most of the people coming to the bank were becoming customers, but less and less people were knocking on their door. The problem was simple, neglecting the top and the middle of the funnel resulted in less people knowing about the products and offerings of the bank. Digital performance media did convince a few of these customers, but it was limited by the granularity of targeting options available. The lower funnel works heavily on the targeting options available based on the digital footprints left by people. In a nutshell, it relies heavily on the current intent of a potential customer. But what about people who don’t drop any relevant digital information to reveal if they’re interested in a banking service, lower-funnel digital performance marketing won’t target these people.
Digital Performance Marketing, a weapon for the desperate looking only for short term solutions. But why do we always try to make these performance marketing platforms responsible for carrying the weight of everything in sales and marketing? Performance lies in all parts of the funnel, and a shared responsibility of all platforms combined.
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More about decoding the fine lines between digital and performance marketing in the upcoming articles.