What Is the Marketing Funnel and How Does It Work?

The marketing funnel is a map of how someone moves from discovering a brand to considering it, buying, and buying again. It works by assigning messages, channels, and metrics to each stage, although real customer journeys are often non-linear: people compare, loop back, and consult several sources before deciding.

By Matias Valdivieso, Director, Vanta Designs. Updated: July 2026.

Key takeaways

• The funnel separates objectives: awareness, consideration, conversion, retention, and referral.
• McKinsey wrote on June 1, 2009 that consumers were moving outside the traditional funnel as they changed how they research and buy, in The consumer decision journey.
• Google describes the space between trigger and purchase as the "messy middle," with repeated exploration and evaluation, in Think with Google, July 2020.
• Gartner recommends clarifying goals across digital experiences, channels, and campaigns, according to Build a Digital Marketing Strategy That Delivers Results, accessed July 2026.
• In Chile, 47.3% of people reported looking up information about goods or services online and 47.1% bought products or services online in the last 3 months, according to Subtel and Cadem, November 2025.

What is a marketing funnel?

A marketing funnel is a way to organize decision stages, not a promise that every customer moves in a straight line. The practical SMB version has five stages: discovery, consideration, conversion, retention, and referral. At each stage, the customer's questions and the business's useful metrics change. McKinsey warned on June 1, 2009, in The consumer decision journey, that consumers were moving outside the traditional funnel because they were researching and buying in new ways. That is why the modern funnel should be used as a diagnostic system: where the business is losing demand, trust, close rate, or repeat purchase.

How does each funnel stage work?

Each stage answers a different customer question and needs a different indicator. A simple structure works like this:

Stage	Customer question	Main metric
Discovery	Is there a solution to my problem?	Qualified reach
Consideration	Can this brand solve it?	Useful visits and inquiries
Conversion	Should I buy or request a quote now?	CAC, ROAS, or close rate
Retention	Will I buy again?	Repeat purchase or LTV
Referral	Would I recommend it?	Referrals and reviews

Gartner, in its digital strategy guide accessed July 2026, recommends translating broad goals into concrete actions across digital experiences, channels, and campaigns. That logic keeps every campaign from being judged by the same metric.

Why should the funnel not be treated as a linear path?

The real journey combines exploration, evaluation, and movement backward. Google described this in July 2020 as the "messy middle": a complex space between triggers and purchase decisions where people explore options and then reduce alternatives. In that research, Google worked with The Behavioural Architects and analyzed 310,000 simulated purchase scenarios across categories such as financial services, retail, travel, and consumer goods. For an SMB, the implication is concrete: one person may see a Meta Ads placement, search reviews on Google, send a WhatsApp message, compare pricing, and return to the site three days later. The funnel helps when it recognizes those jumps, not when it ignores them.

What content belongs at each funnel stage?

Content should change according to the friction that prevents progress. In discovery, short videos, simple comparisons, and common problems help. In consideration, service pages, cases, indicative pricing, guarantees, coverage, and FAQs matter. In conversion, the priority is reducing risk: a simple form, visible WhatsApp, payment methods, timing, and proof. In retention, email, reminders, customer offers, and post-purchase follow-up work. Subtel and Cadem reported in November 2025 that 47.3% of people in Chile used the internet to get information about goods or services and 47.1% bought products or services online in the last 3 months. That confirms content and purchase now coexist inside the same digital journey.

How do you measure a marketing funnel?

A funnel is measured by comparing entries, progress, and losses at each stage. The SMB should review at least these indicators:

• Discovery: qualified reach, useful impressions, and growth in branded searches.
• Consideration: visits to key pages, WhatsApp clicks, downloads, inquiries, and response time.
• Conversion: cost per lead, close rate, CAC, ROAS, margin, and attributed sales.
• Retention: repeat purchase, frequency, average order value, LTV, and recovered inactive customers.
• Referral: reviews, referrals, mentions, and published cases.

Measurement should live in connected tools: GA4 for website behavior, Google Ads and Meta Ads Manager for media, CRM for opportunities, and a financial sheet for margin.

How can a Chilean SMB use the funnel without overcomplicating it?

An SMB can start with a one-page version and one weekly meeting. First, list the three objections sales hears most often: price, trust, timing, coverage, or results. Then assign one action to each stage: a performance marketing campaign to capture demand, a page that answers objections, a form or WhatsApp path for quotes, and follow-up for repeat purchase. Finally, review where people are dropping off. If there are clicks but no inquiries, the issue is the page or offer. If there are leads but no sales, the issue is follow-up, pricing, or lead quality. The funnel works when it turns scattered doubts into operating decisions.

Frequently asked questions

What is the difference between a marketing funnel and a sales funnel?
The marketing funnel organizes how demand is generated and nurtured. The sales funnel organizes how a contact becomes a customer. In an SMB, both should connect because marketing can create leads that sales cannot close.

Does the funnel work for local businesses?
Yes. A local business also needs discovery, comparison, contact, and repeat purchase. The difference is that its touchpoints are often Google Maps, reviews, WhatsApp, Instagram, calls, and in-person visits.

Which stage should be optimized first?
Start with the stage where the business loses the most economic value. If there is little qualified traffic, discovery is weak. If visits do not become inquiries, trust is weak. If inquiries do not become sales, the issue is offer, follow-up, or closing.

Do I need automation to use a funnel?
Not at the beginning. A basic CRM, WhatsApp tags, GA4, conversion events, and weekly review can be enough. Automation helps once the manual process is already clear.

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Sources: McKinsey, The consumer decision journey, June 1, 2009; Think with Google, How people decide what to buy lies in the messy middle, July 2020; Gartner, Build a Digital Marketing Strategy That Delivers Results, accessed July 2026; Subtel and Cadem, XII Survey on Internet Access and Use, November 14, 2025.