The purchase funnel is no more

by Robin Grant in News Google+

The purchase funnel has always been one of the main tenets of marketing theory.

purchase funnel

We’ve intuitively known for while that it no longer holds true (if it ever did), but despite many attempts, we’ve had nothing come along that’s replaced it. For example, Forrester had a go a couple of years ago with the diagram below, but crucially it failed to provide a model that was easy to visualise, and it failed to catch on (surprisingly, neither did Giles Rhys Jones’ simpler alternative).

Forrester's funnel

Now, finally, we have a viable alternative model, along with the science to back it up. McKinsey have conducted a study examining the purchase decisions of almost 20,000 consumers across five industries and three continents, and come up with what they call the consumer decision journey:

The funnel concept fails to capture all the touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer. A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests. We call this approach the consumer decision journey.

Because of the shift away from one-way communication — from marketers to consumers — toward a two-way conversation, marketers need a more systematic way to satisfy customer demands and manage word-of-mouth.

consumer decision journey

We hate the word ‘consumer’ (we are all people as far as We Are Social is concerned), but that doesn’t make their model any less valid. David Court, Director of McKinsey’s global Marketing & Sales practice, has an excellent presentation that explains the research and what it means for marketers. The most salient parts being:

You have a trigger of some sort, where people start across the decision journey — they are now going to move towards purchase. The first stage is initial consideration. In many industries, people actually start in their initial consideration of a brand with a relatively narrow list, we believe because of the busy lives and bombardment of media — it’s just very difficult to get through all this clutter in this consumers initial consideration set. However, once the consumer decides they are going to buy a product, they move into a stage that we call active evaluation. It is here that the number of brands they are considering increases. Which is exactly the opposite of the premise of the funnel, going from broad to narrow. This is the stage when the consumer is intent on purchasing and they are actively researching the product.

What marketers should know
The most important thing for marketers to do is to make sure that their marketing activities are aligned against how their consumers research and buy products [...] companies need to look at their messaging in light of where they have the greatest opportunity. For example, companies’ messaging is all about trying to get into the initial consideration set, and yet, when the consumer reaches out during their active evaluation stage, they’re not providing the right facts and testimonials that the consumer is looking for [...] most companies are going to have to make fundamental investment in what we would call consumer driven marketing

Consumer versus company driven touchpoints
We analytically looked at which touchpoints were most influencing the consumer’s decision. We found two types — company driven versus consumer driven. In consumer driven, the consumer is reaching out to get information — they’re talking to their friends, doing internet searches, seeing what’s said on third party sites.

In the initial consideration it was still very much still company driven — the advertising was a very critical part of the touch points that influenced the consumer. However, when we got into active evaluation, two thirds of the influence of those most powerful touchpoints were from consumer driven touchpoints — word of mouth, talking to friends and family, searching on the internet.

And that is a very big change — you need to develop ways for people to talk about your product, so that word of mouth works. Be represented on independent internet sites where people will go and research and buy products. Because, if you don’t have enough presence on those types of consumer driven approaches, when the consumer is reaching out during active evaluation, you’re not there for them to find.

Amen to that…

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  • http://www.simiant.com/blog Nathan Williams

    This is nothing new at all. The purchase funnel, although always drawn as a funnel, has always been considered a loop. It's always worked that way because existing customers make repeat purchases, something that the literal basic diagram doesn't obviously demonstrate.

  • http://twitter.com/mariah808 mariah808

    This is HUGE.

  • http://wearesocial.net Robin Grant

    Nathan – have you actually looked at the presentation or at least read the bits I highlighted? How about this bit:

    once the consumer decides they are going to buy a product, they move into a stage that we call active evaluation. It is here that the number of brands they are considering increases. Which is exactly the opposite of the premise of the funnel

    To me, it not only seems pretty new, but also has a proper grounding:

    a study examining the purchase decisions of almost 20,000 consumers across five industries and three continents

  • http://www.simiant.com/blog Nathan Williams

    Consumers did 'active evaluation' before the internet existed, let alone social media. That's why ancient publications like 'Which?' exist/ed. Old school mate ;-)

  • http://phildearson.com Phil Dearson

    First!

    Gah. Crap. Fifth!

    The Cyclical Funnel sounds like something at Alton Towers. Or a sex clinic.

  • captain cupcake

    I think its valuable thinking, Robin; though revolutionary is maybe a overstatement.

    All purchase cycles have a purchase trigger then research, consideration, transaction, usage and re-purchase phases. The tread that runs through these phases is 'recommendations'; assessing or rejecting products based on reviews, peers, adverts and your own rational/emotional experiences.

    Advertising is brands recommending themselves. David Ogilvy talked about 'brands who talk well of themselves' and 'ensuring your products get in the consideration set' all his career.

  • http://wearesocial.net Robin Grant

    bah humbug!

    I didn't say 'revolutionary' – I said:

    a viable alternative model, along with the science to back it up

  • captain cupcake

    Shame that McKinsey isn't as ground breaking as they like to think they are.

  • http://www.holycow.typepad.com holycowmarkh

    I am truly trying not to laugh here… OK I give up – I am laughing!

    'most companies are going to have to make fundamental investment in what we would call consumer driven marketing' – really. Sort of like having an ad to attract attention perhaps and then and a website for more info. Shock horror – the genius of it all!!!

    The funnel isn't really a funnel at all – coz it gets bigger in the middle. Not true of many categories – and we don't like too much choice so we whittle things down to what people like us are buying. Still linear though innit? And it's not a funnel – it's a loop – yep always was with people repurchasing. Getting the giggles again here.

    Surely most marketers get that they will attract prospects using emotionally based advertising to get onto the consideration list, then provide details and back up information to be shared with family and friends in the active evaluation phase through brochures, mailings, websites, Twitter feeds etc.

    Luckily all this groundbreaking stuff is backed up with lots of focus groups. Genius. Is this a spoof? Is Marcus Brown behind this? My advice Robin – take it down quick!

  • http://wearesocial.net Robin Grant

    Hey Mark

    I don't know. It seemed useful to me yesterday (obviously partially for selfish reasons). It still seems useful today.

    None of the advice they give is revolutionary, but it is sound, it is backed by their research and it is from McKinsey.

  • http://twitter.com/steve_e Steve

    Consumer driven marketings a really bad way to put it… What this brings home for me is the need to understand (and optimise, maybe even measure effectiveness of) all the touch points that you have with your audience/customers. That goes for digital, offline, call centres, email, door drop and all other media. It's the only way to begin to understand the consideration funnel (funnel, doughnut, lump, mobius strip – whatever shape yours is) for your offering and the people who congregate around it and eventually might buy into it.

    Yep, none of this is ground breaking but it is often forgotten. Plough all your dollars into your website and you may get no benefits if the rest of the 'customer' journey is a muddy quagmire they have to wade through.

    IMO the best thing about studies/papers like this is that they get you thinking and stimulate debate!

  • http://www.holycow.typepad.com holycowmarkh

    Because it's McKinsey doesn't make it right or useful.

    They should stay in the realms of stripping costs out of value chains rather than getting into marketing. But, having said that – if you find it useful then that is wonderful.

    There are better and more useful marketing models out there – albeit they were written a long time ago. Doesn't make them wrong or useless either.

  • http://www.facebook.com/people/Michael-Troiano/673811408 Michael Troiano

    I think it's solid. Models are as valuable as what they illuminate/predict. In this one I see a lot absent from the funnel model:

    - Brands matter because they buy you one of a limited number of places at the starting gate of a purchase decision by a busy consumer
    - The “trigger” notion, which points to a future application of real-time channels like Twitter and mobile.
    - The elevation of Consumer-driven touchpoints as a medium at least on par with Company-driven touchpoints.

    Good post, Robin.

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  • http://twitter.com/cwstephenson cwstephenson

    I'm in the 'useful' camp on this one.

    if the report does nothing else than make communications plans less-'awareness for the sake of it' focussed, and more inclusive of media that is:
    always on
    on demand
    social
    and integrated into dCRM…

    …then it will have served a purpose

  • http://twitter.com/griffinfarley griffinfarley

    This is a great post Robin. Many of us have known that you have to flip the funnel upside down and start with influencers or advocates. I like this chart because it talks about the behavior people go through when making decisions and the importance of a community to help them find the right answer.

  • http://twitter.com/steveseager SteveSeager

    Erm. Bit of role play: “I am a sales manager. This isn't news. My SAP sales funnel and CRM covers all brand touch points and stages in their decision cycle anyway. Some of those points are looked after by sales, some support, some marketing, and if i really have to, PR. So what does this tell me that I am not already doing with my CRM?”

    I can't see the difference in the way that adds value to accomplished sales people. Am i missing something? PS I'm a online pr and content marketer.

  • http://twitter.com/Robert_Gibbs Robert Gibbs

    Leave McKinsey out of this!! It's not easy to make a fortune by stating the obvious.

    Besides – the evolution of the purchasing funnel may very well be “nothing new” to the audience of this blog; but when traditional agencies are still clinging to traditional media spend, it's hard to tell if the marketing industry has really caught up with consumers.

    Bottom line – if I see one more marketing theory or process wheel (or funnel, chain, cycle, you name it) then I think I'll throw up. But it's always helpful to visualize the entire process when allocating marketing/sales efforts (and budgets). Now it would be nice to see other agencies and consultants actually recommending these approaches instead of the same “old but lucrative” media plans.

    Nicely written article Robin!!

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  • http://www.holycow.typepad.com holycowmarkh

    I think Roberts comments are valid – rather more considered than my outburst. One good thing about it all is that these kinds of approaches and frameworks are now being broadcast to a wider audience – many of whom I concede may not have seen them before and that is important. It was as Robert says – a well written article Robin – apologies for my earlier churlishness. ;

  • http://www.simiant.com/blog simiant

    Splitter!

  • http://metricsman.wordpress.com/ Don Bartholomew

    Hi Robin,
    Enjoyed the post and comments. In my view the McKinsey model is interesting but does not really negate the funnel model. The starting point of the McKinsey model already assumes Awareness – by definition you can't consider a brand unless you are aware of it. The notion of expanding and shifting consideration sets is more realistic, but again you have to become aware of a brand in order to add them to your consideration set. I think believe the McKinsey model adds some interesting insight but is not truly revolutionary thinking.

    No one has touched on perhaps the biggest reason to develop a linear model – so we can apply linear mathematics to create statistical models. Marketing theorists understand consumer purchase behavior is closer to chaos theory than it is linear behavior, but the math becomes overly complicated. All linear models are an attempt to simplify.

    Thanks, Don B @donbart

  • http://www.ShiftSelling.com/ Craig Elias

    It’s interesting to see McKinsey starting to notice the ‘Trigger Event’ economy.

    I would argue that people have always bought based upon ‘Trigger Events’ but it was not until recently the something ‘Triggered’ McKinsey’s understanding.

    I have always agreed with the AIDA (Awareness, Interest, Desire, Interest) model but understood that it is a ‘Trigger Event’ that creates the desire that leads to the action.

    ‘Trigger Events’ are as applicable to B2B sales as they are to B2C.

    The specific ‘Trigger Events’ may be different but the analogy stays the same.

    Craig Elias
    Creator of Trigger Event Selling™

  • Rowan Schaaf

    We've run research specifically in the automotive sector for one of our clients that completely backed that up. We're a lot more complicated than the funnel presumes; and that by the way, has to be a good thing!

  • daisytagger

    This McKinsey loop looks like a cross section of the funnel, maybe somewhere around consideration, as it narrows toward purchase and loops around for loyalty.

  • http://www.connectme360.com connectme360

    Looks like a lot of thought went into the analysis. I like how it provides a simple framework for mapping the consumer decisionmaking process.

    I have some mild differences of opinion based on my experiences in retail and hospitality. I wish the model took into accoun multiple moments of truth, not just the moment of purchase. A single bad experience — if it aligns with the consumer's priorities — can tip the entire apple cart. Also, it appears the model lumps in concepts like 'clientele' (i.e. LTV) and referrals under “postpurchase experience”.

    Nice diagram, one of the better posts I've seen.

  • captain cupcake

    If anybody on this blog hasn't been saying this stuff to their clients for the last 10 years they rapidly deserve another career. Only ATL and media agencies accept that any work is about awaerness – simply becase its lazy, easy to achieve and can be bought with enough spend. Engagement that helps people make informed decisions and provides a experience with a company they want to recommend is they only focus we should be having.

  • draytonbird

    I am astounded that I've managed to make a living selling all kinds of stuff to all kinds of people all these years without any funnels, loops or diagrams whatsoever. They all fall into the “that's interesting/obvious/irrelevant/so bloody what” categories. The truth is, all industries and situations differ; and marketers generally prove Bertrand Russell's adage: “What men seek is not knowledge, but certainty.”

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  • stewartatkins

    There is a value in this if only to help articulate a communications strategy to a prospective client that goes beyond 'traditional' media and embraces the social kind as well in as integrated a fashion as we can best create. So from my current pragmatic perspective whether new or not if we can get it on to one slide and it helps win a pitch then right now its good!

  • http://www.themarketingeye.blogspot.com/ The Marketing Eye

    Mckinsey is confusing the psychology of buying with a marketer’s approach to intervening in the process.

    The linear progression that McKinsey challenges is based on AIDA – Awareness, Interest, Desire & Action.

    To my knowledge, nobody has ever maintained that this is how people buy. We have understood since Maslow was a boy that human actions are based on fulfilling needs. When we have a need, we set about fulfilling it at a speed dictated by the urgency of the requirement and the degree of risk in the decision.

    AIDA remains valid and has its place for those that understand it. To claim insight from the revelation that purchases are needs and desires driven is like proclaiming the Earth orbits the Sun.
    http://bit.ly/DE08j

  • http://twitter.com/tillypick tillypick

    The McKinsey model is a big “duh!” And, it misses the point about the increasing number and types of triggers and influencers which the Forrester model suggests are important for us to think about.

    Net is that how people's actual needs and awareness/perceptions/feelings about brands and products intersect continues to get more dynamic, complex and micro every day. It's both exciting and daunting. Fundamental to it all is the need to have a good grasp, from beginning to end, about how your customers behave and feel towards you and your products.

    Call it funnel. Call it a very long tube. Call it an architecture. It's all the same at the end of the day. Know thy customer.

  • http://www.bringbuyers.com/ local online marketing

    The more you know about a subject matter, the more you realize that the so called experts are often not.

    Don't let them fool you.

  • dayoadefila

    The getting people thinking part is really the point. Marketers, advertising folks tend to – quite amazingly forget one of the primal laws of social science – Man is dynamic! Thanks Robin

  • itjobs1

    The article is very nice we are help to social media.
    http://www.staffingpower.com

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  • paul

    The underlying assumptions of the funnel guided the way marketers built programs for years. McKinsey's research challenges those underlying assumptions. The real question is what do marketers do now? The purchase funnel was the basis for marketing program development, which we should all admit didn't produce enough programs that engaged or even complied with what consumers demand (relevance and self-awareness on the part of the brand). Now even that underlying foundation is changing. Marketers need a new framework, or as a first step, a program development model that deals with the implication that consumer buying behavior has forever changed…and so has the funnel.

  • paul

    The underlying assumptions of the funnel guided the way marketers built programs for years. McKinsey's research challenges those underlying assumptions. The real question is what do marketers do now? The purchase funnel was the basis for marketing program development, which we should all admit didn't produce enough programs that engaged or even complied with what consumers demand (relevance and self-awareness on the part of the brand). Now even that underlying foundation is changing. Marketers need a new framework, or as a first step, a program development model that deals with the implication that consumer buying behavior has forever changed…and so has the funnel.

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  • http://socialarc.com/blog/206-from-purchase-funnel-to-social-buying-journey Bennett

    We liked McKinsey’s decision journey, but felt that it did not adequately address the role of social media in the discovery process. What do you think about our ‘Social Buying Journey’?
    http://socialarc.com/blog/206-from-purchase-funnel-to-social-buying-journey

  • Adrian

    Interesting, if only because Inwas in meeting today where this model was dragged out – you should see the full version where this is just center of giant ellipse, with sub-segments and data applied to each stage eg triggers, no of brand considered and so on ad infinitum.

    There does seem to be something in McKinsey mindset which is profoundly uncomfortable with admitting people are irrational and unpredictable. They like neat models and this allows them to behave as if marketing is capable of complete understanding and control of messy behaviour. It is marketing’s version of the Cartesian notions of being able to predict the future by knowing the position and forces acting on every particle in the universe.

    The only value I can see is forcing people to actually suport assertions with data, and acknowledging the growing availability of consumer influence via reviews, blogs etc. But this will always vary by category, and is just another of plethora of influences on purchase. Do I have time to wade tgrough all the reviews on TripAdvisor, or do I say I’m too busy and go with the brand of hotel I rate highly to begin with?

    It’s got limited value, but as it’s pretty mechanical it will never be substitute for insights which could influence more radical shifts.

  • Deb

    Hi Don,

    Just to let you know – McKinsey does not negate the funnel model. In fact, they state it is still helpful “by providing a way to understand the strength of a brand compared with its competitors at different stages, highlighting the
    bottlenecks that stall adoption, and making it possible to focus on different aspects of the marketing challenge.” :)

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  • Steve Carrel

    That’s what she said. 

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    I’ll
    back again for sure, thanks for great article :D
     

  • New Guy 2011

    I don’t care whether or not this is old or new news. 
    It’s new to me. 
    And I will consider it when creating ads/brand touch points. 
    The lesson is: It’s a never ending loop (Or should be). If a brand continues to provide good product/experience across all their products through a persons lifetime… and marketers continue to communicate the right information to the consumer all along, as indicated in the chart, then it’s all good.  
    Look at Apple. 
    Apple is definitely… in the loop. 

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