The Bow Tie Funnel



The traditional marketing funnel focuses on acquiring new customers, often neglecting existing ones after the purchase stage. The bow tie funnel, on the other hand, extends beyond the purchase stage, emphasizing customer retention, loyalty, and advocacy. By prioritizing customer retention, businesses can achieve higher profit margins and long-term success. The bow tie funnel allows marketers to gather valuable data throughout the customer journey and develop lasting relationships with customers, leading to increased revenue and a loyal customer base.

By Payal Parikh, Director of Client Engagement and Head of Growth at Heinz Marketing

Most of us marketers are focused on a traditional revenue funnel – cone-shaped with awareness at the top and purchase at the bottom.

At the top stage of the funnel, you have prospects who are aware of your brand. This stage is the widest part of the funnel with a large number of leads. As these prospects move further down the funnel, the number of leads gradually reduces. At the end of the funnel, the last stage, only a few leads remain that get converted into consumers. This we call a purchase stage.

This traditional funnel maps the entire buyer’s journey. As marketers, we put in a lot of effort to understand how a buyer is interacting and engaging at each level of the funnel. We develop strategies that have maximum impact on the prospects at each stage, we try hard to increase CVR at each stage of the funnel, even though it is just by 1 decimal point. As we know, even that one decimal point is going to impact the bottom line significantly.

Everything seems good so far, correct? Maybe not. This traditional marketing funnel has its own loopholes that can make us lose potential business and increase our expenses manifold. This is because we know that the cost of acquisition for a new customer is much higher than their retention cost.

Loopholes in the traditional marketing funnel

As a marketer, you will most likely switch your focus from the newly converted prospects (at the purchase stage) to acquiring and converting new prospects that are still further up in the funnel. This will ‘end’ your marketing efforts at that time for those people who reached the purchase stage.

According to customer retention is 5-25 times cheaper than customer acquisition.

It is clear through numerous studies on this topic, that the longer our customers stick with our business, the higher the profit margins will be.

What is a Bow Tie Funnel?

A bow tie funnel extends your traditional funnel beyond the purchase stage with the loyalty and customer advocacy stages. The funnel is flipped horizontally and creates a visual of consistent growth.

The bow tie funnel focuses on retaining customers by building brand trust and transforming them into brand advocates.. This approach emphasizes building long-term relationships with customers.

Using the bow tie funnel as a strategy, allows marketers to track customer growth and measure the drivers that impact total revenue. Some metrics you can track here are Customer Lifetime Value (CLV), Marketing Influenced Adoption, Pipeline from referrals and repeat clients, Retention Rate, Churn Rate, Renewal Rate, Net Promoter Score (NPS), Repeat Purchase Ratio, Attach Rate by Product for cross-selling, and many more.


Advantages of Bow Tie Funnel

Customer retention strategies create the ultimate competitive advantage. Revenue is best secured when your company continues to keep its customers happy and loyal post-sale. Beyond providing a focus on keeping clients happy, the bow tie funnel provides one of the most important benefits needed for data collection: time. The bow tie funnel follows the customer throughout their entire customer journey, providing ample time to gather data.

The bow tie funnel signifies the many ways you can develop relationships with your customers. It also represents the variety of future products or services you can encourage them to purchase.

Here are a few ideas to improve customer experience and create a loyal customer base.

Customer retention and optimizing for retention is nothing new. Many businesses haven’t fully grasped the concept of allocating substantial resources to customer retention.

If we can help you develop your bow tie funnel, strategies to get started on this journey, and define metrics to measure success beyond the traditional funnel, please let us know!

Reach out to us for a free 30 min consultation!