Many companies will state that the customer journey is an important part of their business. And that customer retention is one of their goals. However, not every company has a clear layout to help them keep track of metrics.
And they end up with results they don’t know how to control or improve. This can lead to high customer churn or dwindling leads. If the company doesn’t know how to address these issues, it can rapidly lead to disaster.
AIDA vs AARRR vs the bowtie model
Over the years, marketers have developed various sales funnels to guide their efforts in acquiring new customers. However, as the technology, business models, and customer behavior evolved, these models had to be adjusted.
The classic sales funnel (AIDA)
With the classic sales funnel model we have a rudimentary approach to the customer journey. We are only focusing on getting people to choose and buy our product or service.
This is a great way of visualizing the funnel stages the customer goes through and allows businesses to set KPIs for each of them. Moreover, it can also be used to map each of the marketing channels they are using to target the target audience.
This gave birth to the 3 acronyms that are widely used in marketing lingo:
- Top of the funnel (TOFU)
- Middle of the funnel (MOFU)
- Bottom of the funnel (BOFU)
The AARRR funnel (pirate funnel)
The pirate funnel was developed by investor and entrepreneur, Dave McClure in 2007.
This took the classic funnel one step forward and looked at some more specific steps in the customer journey.
Now, the focus has shifted more toward how the user interacts with the business. And the goal was to provide the best experience you can to increase the company’s revenue.
This was a great framework to use especially as marketing automation was becoming more affordable.
The addition of the ‘referrals’ stage in the funnel guided the company to see the benefits of happy customers. They will be the new salespeople for your product or service.
To see this in action, let’s look at what Dropbox did back in 2008. Their situation was a marketer’s worst nightmare. They could not get leads at a profitable cost per lead.
They were selling a $99/year subscription by spending around $388 to acquire that customer. So they thought to incentivize customers to be their salespeople.
They did this with a very smart referral program: by inviting your friend to join Dropbox, you both get 500Mb of storage for free.
And it worked. In 15 months they have 39x their user base (from around 100,000 to almost 4 million).
The bowtie model
In 2009, the airline industry needed a sales funnel to better represent their customer journey (pun intended). If you think about it, the user needs to narrow down a destination, date, and price before committing. That commitment represents a won deal.
But that was just part of the story. After that, they could require additional services like seat upgrades, car rentals, hotel bookings, or extra luggage. And that meant there were more sales opportunities than any existing sales funnel could map. So, the bowtie model was created.
Later, it was adopted by Winning by Design for B2B marketing. And if you look at it from a business point of view, it makes a lot of sense. The left side of the bowtie model covers awareness, consideration, and the purchase. But then, retention and expansion get the same level of importance on the right side.
Deconstructing the bowtie
The bowtie model offers a comprehensive view of the customer journey, by bringing together the pre-purchase and post-purchase actions. And this creates a full map of the customer journey.
Left side of the bowtie funnel
- Awareness: This stage is all about capturing the attention of potential customers who might be unaware of your brand or product. Here, you can use strategies revolving around content marketing, social media marketing, and search engine optimization (SEO). By creating informative and engaging content, you can increase brand awareness and position yourself as a knowledgeable player in the market.
- Education: Once your prospects are aware, you can educate them about the problem you solve and show them how your product or service is the perfect fit. This is where you bring in the detailed case studies, webinars, and free trials.
- Selection: Now that your potential customers have the knowledge, it is time for the selection phase. To win them over, provide them with compelling product demos, clear pricing structures, and testimonials from other happy clients.
Right side of the bowtie funnel
- Onboard: After you have made the sale, the story isn’t over. It has just begun. You must provide the customer with a smooth onboarding, and make sure they understand how to use the product. In short, you need to set them up for success.
- Impact: With the help of your customer success team, focus on ensuring customers achieve maximum results. This can be done through personalized training or proactive support to help customers maximize the value they receive.
- Growth: Happy customers become loyal customers. In the growth phase, you can leverage upsells, cross-sells, and loyalty programs to encourage repeat business and grow the potential of your customer base. By nurturing these relationships, you create brand advocates who will be your informal salespeople.
The added value of the bowtie funnel
By now, you should have noticed the added value of the bowtie funnel compared to the conventional funnel. Mapping the customer journey in this way, you can acknowledge all its complexities through a multi-faceted approach. So let’s check some of the limitations that the bowtie overcomes.
Conversion tracking
When it comes to tracking the right metrics, it is easy to determine the ones on the left side of the bowtie (website metrics, ad metrics, return on ad spend, marketing efficiency ratio, etc.). But it is a little bit harder on the right side. You need to look at your company and see what would be your overall goal. Then, you can decide on what metric would represent it best (customer lifetime value, churn rate, net promoter score, etc.)
But when it comes to the reliability of your measurements, the left side has a slight problem. With all the touchpoints on the various platforms, dark social, or ad blockers, the conversion attribution gets a little bit wonky and it is becoming harder to know precisely where the user is coming from.
However, on the left side of the bowtie, things are straightforward. If you have an app and you are tracking customer behavior, that data is reliable. If you conduct interviews, if a client upgrades their subscription, or if they downgrade, those metrics are very easy to measure.
Using qualitative measurements
The left side of the bowtie might rely on quantitative lead qualification: demographics, technographics, website visits, etc. But the right side goes deeper. Understanding a customer’s specific needs, buying motivations, and emotional triggers through surveys, feedback, or even social media sentiment analysis, allows for a more targeted and successful nurturing strategy.
Focusing on retention
Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. And it makes sense. You don’t have to spend time and resources to find a new client. You just need to make sure the existing one is happy.
The bowtie model will allow your teams to track KPIs for this. And what gets measured, gets improved.
And it’s impossible not to lose clients, right? But here’s the thing. There are two sides of this funnel. The left side will be your sprinters: marketing and sales will do their best to get in leads as quickly as possible. And the right side will be your marathon runners. Your Support and Customer Success teams will only care about longevity and retaining the clients for as long as possible.
When these approaches work well together, your company will be on a sustainable path to growth.
Tailoring the message
The bowtie doesn’t just consider the marketer’s perspective. It flips the script to consider both sides. On the left, you’ve got the initial demand and lead generation. Here, the message is clear, and concise aiming to quickly grab the attention and quickly qualify the leads.
On the right, the focus shifts to nurturing existing clients. This requires a more qualitative approach, understanding their needs and goals to build long-term relationships and loyalty.
