Analytics, Brand Strategy

It’s Supposed to be a Pipe not a Funnel!

Posted 09 Mar 2023

Why do top of the funnel insights measures such as brand health not perfectly translate into actual brand choice at the bottom of the funnel? If it did, you would have a pipeline and not a funnel.

Is the reason that what drives a brand’s competitive position in the market is not a perfect match to what will compel a consumer to choose that brand at the decision moment? Or is it simply that for brand marketers ‘there's many a slip 'twixt the cup and the lip?’

At the top of the funnel, brand health is the likelihood that your brand will be the prospective buyer’s first choice. First choice is a product of the prospective buyer’s rational and emotional appraisal of the competitive set. For commercial markets, rational assessment centres on value for money. That is, value in the economics sense of the word - as it relates to the price and quality trade-off. Beware, the most common folly is for brand managers to assume price elasticity is based on actual price only and not mostly or at least partly, perceived price. Please see here.

When it comes to choice, emotion is the neural pathway between what emotional benefit the category facilitates and the brand. If winning the lottery brings happiness, the brands selling lottery tickets need to create that neural pathway or non-conscious association between the brand and the discrete emotion, happiness. That is, to effectively elicit happiness, Powerball needs not be considered a ‘happy’ brand, but instead, cue a sense of happiness – namely the happiness of winning the lottery.

Brand Measurement

Brand measurement tends to focus on gauging brand health at the top of the funnel – that is, a brand’s relative competitive position in the minds of consumers, as derived by the scientifically-validated drivers of choice in the category. This can lead to a lot of back slapping about the terrific job the marketing department and the creative partners have achieved through the cumulative effect of marketing and operational efforts. However, the endgame is not about brand health but rather, brand choice; further along in the decision journey.

The intention of the shopper as they turn into the “shopping aisle” might have been to select your brand however, as they physically or metaphorically travel the “last three feet,” the preference criteria can be diluted by the amplification of lesser criteria.

The endgame is not about brand health but rather, brand choice

Let’s say for mobile phone carriers, network performance has been instrumental is driving your brand health however, at the point of purchase, a lesser choice criterion such as a bundled in streaming service or free international roaming leads you to choose a competitor. You trade-off inferior network for a “free” Netflix subscription. The importance of streaming now, in the decision moment outweighs the influence of network performance, which held weight in getting the consumer here.

The greater the competitive intensity in a category, the looser the top of the funnel brand preference measure is as an approximation for final brand choice.

So, the crux of the question for marketers is, why bother building top of the funnel brand preference and instead, why not just hang out at the bottom of the funnel redirecting your competitors’ would be share? Forethought® modelling consistently shows that top of the funnel brand preference correlates strongly with third party validated, measures of actual choice. Top of the funnel brand health is a predictor of bottom of the funnel, brand choice.

Top of the funnel brand health is a predictor of bottom of the funnel, brand choice.

This can be best illustrated in markets where the regulator requires brands to submit results of what is effectively change in market share. For example, in Australia the Australian Prudential Regulation Authority (APRA) collects movements in numbers of members. Exhibit One illustrates the relationship between the top of the funnel brand health and according to APRA, the bottom of the funnel, growth in membership (actual acquisition, choice). The correlation between brand health and membership growth is 0.81. Therefore, for the better part, what drives brand preference is also what drives brand choice. Incidentally, in this category, the correlation is at its strongest when choice data is lagged by three months behind brand health measures.

Exhibit 1

Exhibit One – Relationship between brand health and growing membership

And yet, it is not a pipeline and the fact remains, top of the funnel brand health does not perfectly translate into brand choice at the bottom of the funnel and, the prosperity of the business could easily turn on those prospects being captured rather than having them diverted by a competitor should specific levers be pulled in the “last three feet”.

Unfair share and the bottom of the funnel

The competitors most vulnerable to losing out at the bottom of the funnel are those in highly competitive markets with weak brand health compounded by poor physical availability. The battle at the bottom of the funnel is to maximise the conversion of your brand preference while minimising the success of your competitors’ bottom of the funnel, diversionary tactics. The trouble is matching competitors’ tactics involves diluting your own enterprise value by giving away value to those who would normally come to your brand without further inducement. The question becomes one of marginal costs of bottom of the funnel inducements versus marginal benefit.

How then do you maximise the success of your own bottom of the funnel tactics while minimising the loss of enterprise value and eroding the strength of brand preference? The lowest cost tactics are those that simply reinforce at the point of sale your top of the funnel, brand health drivers. Returning to our telecommunications example, you execute bottom of the funnel tactics to reinforce your network performance. Alas, for some, the lure of superior network coverage is not enough to offset the bargain of a free streaming service and so you need more (Exhibit Two).

Exhibit 2

Exhibit Two – Diversionary tactics to win the battle of choice over preference

Building an efficient bottom of the funnel playbook

For digital media, feedback on creative can be almost instantaneous and approaches such as A/B testing enables performance marketing to be continuously improved. A more efficient and scientific means to optimise performance marketing is to run MaxDiff [i] (maximum difference scaling) experiments using the brand and advertising tracker data collection. The fast and simple method belies the power of the resultant discrete choice model and the guidance it provides for optimising bottom of the funnel diversionary tactics.

Unlike top of the funnel brand preference methods that examines the full gambit of hypothetical drivers to optimise brand preference, MaxDiff scientifically identifies the tactics that work at the bottom of the funnel to maximise choice for the “last three feet.”

The need to optimise performance marketing is continuous and therefore, MaxDiff experiments should match the cadence of the brand and advertising tracker. The approach Forethought uses provides a brands with a continuously developing playbook of learnings. Learnings are initially “written in pencil” and as they are successfully applied in-market, “written in ink.” The playbook becomes jointly developed by the client, creative and insights partner.

The need to optimise performance marketing is continuous

The dichotomy of brand preference and brand choice or alternatively, brand building and performance marketing may lead some to consider this topic was previously addressed in the 2013 IPA study by Binet and Field, ‘The Long and The Short of It.’ On the contrary, our work proves that building brand preference in most instances leads to brand choice and it is essentially the presence of competitor’s tactics that require a bottom of the funnel response. The focus of this paper is solely to address how brands can divert competitors’ customers at the bottom of the funnel. For a more detailed discussion please see the two publications in the footnote.

All in all

Brand owners lament that their brand health at the top of the funnel does not translate into brand choice at the bottom of the funnel. Turning the funnel into a pipeline requires marketers to understand why brand preferences do not necessarily translate into choice. The most common reason is that competitors’ tactics become more salient in the buyer’s mind during that all important “last three feet,” leading to an increased importance of a secondary attribute.

[i] The Forethought approach is Prophecy® Deflection. It is used to deflect prospective customers whose first choice is a competitor away from the competitor and towards our client.

[ii] The Folly of the ‘The Long and the Short of It’ The funnel alibi: Why brand building and activation should be undertaken simultaneously