March 14, 2018

Flip or Flop: The Purchase Funnel vs. The Brand Ladder

In his book, The Brand Flip, author Marty Neumeier challenges marketers and business owners to “flip” their thinking.

The book’s premise is that the old way of thinking about customers and sales is unsustainable in the world of the internet and social media. Companies must position themselves as “customer first.”

Consumers hold the fate of businesses in their hands like never before. Businesses that develop deep, personal relationships with customers see the best long-term growth. That requires a fundamental flip in how business owners think about their business.

One of the changes Marty advocates is shifting your focus away from the traditional purchase funnel and thinking about the brand ladder.

What Is the Purchase Funnel?

The purchase funnel is a way to describe how people interact with your business and eventually become customers. At the top of this funnel is the awareness stage. Through marketing or word-of-mouth, someone has come to know that your business exists. They are aware of you and begin their journey through the purchase funnel.

After someone becomes aware and interested in your product or service, they begin to consider you a viable purchasing option. Once they are ready to make a purchase decision, they evaluate you against your competitors and hopefully purchase through you. Purchasing is the bottom of the funnel and the smallest group of people.

Visually, this is described as a funnel because the group of people who will actually buy from you becomes smaller at every stage. They lose interest or choose a competitor and leave your purchase funnel. You can see a visual representation of the funnel below:

Marketing funnel

A marketer’s job is to keep as many people engaged in the funnel as long as possible.

Delighting potential customers at every stage is part of the inbound marketing philosophy. The goal would be a 1:1 ratio between awareness and purchasing, meaning that every person who became aware of your product or service purchased from you.

While a 100% awareness-purchase conversion rate may not be realistic, you can implement strategies to make your purchase funnel as efficient as possible.

Is There Something Wrong With the Purchase Funnel?

Thousands of marketers and business owners use the purchase funnel to describe their buyer’s journey. If there was an inherent flaw in this thinking or if it was somehow inaccurate, you would think that change would be imminent and inevitable.

Marty Neumeier has five reasons why the purchase funnel is no longer helpful:

  1. It only projects sales in the short-term.
  2. It assumes that customers move toward their purchase decision in predictable stages.
  3. In the purchase funnel, current revenue is more important to your business than brand-building.
  4. It values acquiring customers over retaining them.
  5. It assumes that those who don’t buy from your business have no value.

His point is that today’s consumers often go through all four stages of the buyer’s journey all at once, without ever leaving the webpage they landed on. Decisions are no longer made in definable stages, the internet has made instantaneous, flash decisions possible, and brand building has eclipsed traditional marketing to consumers.

Does this mean that the purchase funnel is broken? Is it irrelevant?

Before we declare it dead, let’s first take a look at the brand ladder.

What Is the Brand Ladder?

The brand ladder, or the Brand Commitment Scale (BCS), measures how a company can move a customer from satisfaction to empowering their customers. An empowered customer incorporates your brand into their lives, and they are totally loyal to you and your product or service.

The power of the brand ladder is in developing such a deep connection with your consumers that they begin to rely on you for emotional support, social status, personal growth, or success.

The brand ladder moves a customer from satisfied to delight. At the bottom rung, you generate excitement around your brand, build trust, and surprise your customers.

From delight, your customer moves to engagement. At this stage, you build loyalty by creating a sense of belonging and emotional attachment. When they need what you offer, they automatically come back to you and repurchase.

Finally, a brand can reach the empowerment phase with customers. This is the deepest level of attachment and the hardest to attain.

Companies and brands that empower their customers tend to have better, long-term success than other companies. They are typically fairly stable and generate consistent growth and success.

Do I Need to Change?

The brand ladder and the purchase funnel do not have to exist independently of one another within your company. The optimum strategy is a solid mixture of both.

The purchase funnel is still relevant and important. While the process people go through before they become customers may have become quicker, it hasn’t changed.

Without customers, the brand ladder is irrelevant and unimportant. You can’t empower customers if you don’t have any. Companies have to look at both the short-term and long-term for the best results.

Great marketers and companies make sure that they address both the purchase funnel and the brand ladder when they create their strategy. It’s good business to make sure that you delight your customers so that they continue to purchase from you and eventually make you a part of their everyday lives. Still, it’s also important to know how a person became your customer in the first place.

With a combination of the two, you’ll have a better perspective on how to keep your customers and how to find new ones to delight.

Reggie Sinon

With a background in Economics, Reggie is fascinated by the story that data can tell. He is passionate about telling that story in new and compelling ways and will work with you to best deliver the message of your company.