Conversion Funnel for Ecommerce Websites

It is easier and cheaper to generate leads in ecommerce than in a brick and mortar shop. However, the conversion rate is much lower. The average landing page conversion coefficient is between 3 and 15%. The ratio depends considerably on the business area.



What is a Conversional Funnel

Conversion Funnel Marketing

Ecommerce Conversion Funnel and AIDA for Landing Pages

Main Mistakes in Conversion Funnel Optimization

Ecommerce, or Sales, Funnel

What is a Conversion Funnel

Most people have heard about a sales funnel, but fewer people know what a conversion funnel is. In some ways, these terms are similar to each other, but there are differences. 

The sales funnel shows the path of a potential buyer from getting to know a company or product to purchase. The conversion funnel shows the sequence of user actions until the target action is completed. The target action can be a purchase, a subscription to a channel or a newsletter, a sale, a call, registration, etc.

The classic conversion funnel consists of four main stages:

  1. Acquaintance with a company, product or service. You should attract customers from the Internet using contextual advertising, banners, search optimization technologies (SEO) and other methods. This is the top of the funnel. Depending on the scale of the campaign, there may be quite a lot of potential customers, but not everyone will go beyond the first step. The task of the advertiser is to get people interested in their offer.
  2. Interest in the offer. At the second step, the funnel narrows, and only those users who are interested in the company’s offer remain. For example, 80% of success in a Landing Page depends on the first screen on which the offer is broadcast – a commercial offer that is difficult to refuse. If the buyer came from a search or a contextual ad, then he is already looking for something similar to your product. The task of the second step is to interest the buyer and show him that he has come “to the right place.”
  3. Desire to receive a product or service. The funnel narrows even more – people with the lack of interest in the offer are “screened out” and those who already want to get access to the product remain. These are warm clients. With the help of ecommerce techniques, marketers create a desire in the audience to perform the target action.
  4. Action. The fourth step is the essence of the entire conversion funnel. An eager customer makes a purchase, subscribes to a channel or newsletter, registers, makes calls. To reach your ecommerce goal, you should place an attractive call to action button on a web page. This is the narrowest part of the funnel because fewer people reach it compared to the acquisition stage.

Abbreviation of this process is AIDA, if you learn to use it properly, your ecommerce business will win. The conversion funnel describes the change in the number of website visitors as they go through all the stages of conversion. According to statistics, approximately 25-75% of users drop out at each step.

The most important aim in studying your conversion funnel is to grow the number of people remaining on each step. Raising the proportion of conversions from a website or mobile app is called conversion rate optimization (or CRO).

Conversion Funnel Marketing

In reality, the sales funnel can be more complicated and can consist of 5-6 and even 7 steps. You should pay special attention to differences if working in a digital marketing agency for various clients. The essence remains the same: there’s attraction, implementation and promotion of the buyer to the final goal – making purchase.

Here’s how it can look like:

  1. Advertising campaign
  2. Landing page with products
  3. Adding a product to cart
  4. Going to the page with payout
  5. Checkout

There is no universal funnel template, but you should always control it in some analytical tool, for instance, Google Analytics. Its creation is different for each ecommerce business, depending on the scope, goals, sales processes, and communication channels. Here are some tips on how to build an effective sales funnel.

    1. Look at your product through the eyes of a consumer. How can you solve his/her problems? What benefit can you bring? What benefits can you offer?
    2. Think of a unique selling proposition. A well-formulated USP is able to “lure” the consumer into the funnel, it arouses interest and desire. Objectively evaluate how competitive the product is, what unique advantages the buyer will receive. How accessible and convincing advertising and the site convey the features of your product or service.
    3. Set up lead traps. It is important to track target actions in the sales funnel using Google Analytics. Target actions can be, for instance: filling out a form, signing up for a newsletter, downloading a file, placing a call, or requesting a chat. To reach your goals, you should enhance user experience on a website. You will receive not only leads, but also valuable data for analysis.
    4. Experiment. Test different marketing tools. Look for additional opportunities, stay tuned for new products, connect services to automate routine processes. Innovative solutions are a way to get ahead of the competition.
    5. Analyze. The sales funnel is an analysis tool. Below we will analyze what indicators you need to track in order to improve your marketing strategy, see the most promising development channel and direct resources to it. Of course, never forget using tools that’ll help you do it, including Google Analytics.
  • Study the customer journey map. Evaluate the time people spend on each part of a web page, see where they click and where scroll.

Let’s say, a lot of visitors come to the site, but almost no one becomes a buyer. This means that the funnel “gave a crack” in a certain step. Maybe the advertising channel leads to a non targeted audience or the manager misses calls? Maybe the order form has too many fields? To understand at what stage of the funnel deals break most often, you need to count the conversion.

Sales funnel conversion is an indicator of promotion effectiveness from the marketing point of view. It shows the ratio between the total number of leads that entered the funnel and the number of people who exited.

Ecommerce Conversion Funnel and AIDA for Landing Pages

Web design of a landing page is builded on human behavioral psychology. One should capture attention, arouse interest and desire to buy, and push visitors to take action. These techniques are a part of the AIDA formula.

To acquaint visitors with your business, you should first clearly understand their desires and problems. It is possible after you define your target audience. There are 5 W-questions, after answering which you’ll get a clear and transparent portrait of your target audience.
These questions are as follows:

What? – describe the product you offer

Who? – define the consumer: who buys your products? Indicate gender, age and your ideas about potential customers.

Why? – what problem does the product solve, why does the customer need it?

When? – when do people want to purchase?

Where? – where do you contact the client? Think about where to look for the target audience.

After you answer these questions, you will have an understanding of your future purchasers. Make a map of their interests: who are your target users, what do they like, where do they go, what do they read, etc. It will give you a cue to the ecommerce funnel, and will help you to increase conversion.

Content marketing coupled with analytical tools, such as Google Analytics, will help you organize your content in accordance with the AIDA formula. As you’ve already learned in the first part of this article, AIDA might be decoded as Acquaintance, Interest, Desire, Action. You should implement these principles on a website, especially on a landing page. By increasing engagement rate, you’ll have an opportunity to increase the number of people on each stage of your conversion funnel.

The main principles you should follow when implementing the formula on any kind of a website are the following:

  • Write the truth. Mention only facts that you can confirm. Be specific and don’t deceive the user. The loss of trust in a brand is the point of no return.
  • If you’re lacking inspiration or experience, take a ready-made template. Get encouraged by your competitors, take the AIDA formula as a basis, add your thoughts and give them a try.

Put yourself in the customers’ shoes. Write for a person from your audience, mention how to solve their problems. Illustrate the page in a way that pleases the user, post familiar images.

Mistakes in Conversion Funnel Optimization

The AIDA formula doesn’t work all the time. There are several obstacles and incorrect actions that can lead to unexpected results. You can see that you’ve set up the funnel inadequately in, for instance, Google Analytics. Here are the main problems you can come across with:
You’ve defined the target audience inadequately. As a result, the wrong users see the page. If you show an expensive restaurant offer to a student audience in a medium-sized city, then your money is wasted.

Perhaps you’ve identified the interests of the audience incorrectly. Your proposal will not make people’s lives better. For example, when selling expensive watches, discounts are not the most powerful selling point. Your customers are rich people, they don’t care about saving money on watches.

Your site is way too aggressive. The user sees some manipulation and it makes them angry. Through the sensational headlines “only for today and only for you”, you can achieve a negative perception – people will think about you as about another salesman who is trying to sell something.

Business owners often speak with cliches – users naturally don’t appreciate such behavior.

It doesn’t matter if site content is sensational or not. The main thing is that it should meet the buyer’s needs. All in all, common sense and benefit for the client are the crucial things.

Ecommerce, or Sales, Funnel

You can use the fundamentals of the AIDA method on a landing page. A small ecommerce website owner can count conversions manually. However, if we are talking about a large company with a dozen sales and different promotion channels, then there’s a need for an automation system for controlling the funnel – CRM, or Google Analytics. It clearly shows the status, progress of each user in the funnel, and automatically calculates conversion rates at each stage.

There are two approaches to ecommerce conversion analysis: quantitative and qualitative. The quantitative method is the collection of numerical data about the sales process. For this purpose, you should use various tools.

  1. Google Analytics is the main conversion analysis tool for building a sales funnel. It collects data about the behavior of users on the site: from what sources they came, how long they viewed the product, what they put in the basket.
  2. CRM is a system that contains data about each site visitor: from the acquisition channel to the sale. The program “sees” its status and shows the progress of the transaction at each stage of the sales funnel.
  3. End-to-end analytics is a solution that shows the results of each ecommerce advertising campaign: clicks, calls, sales. The service also helps to evaluate the return on investment in marketing, in order to correctly allocate the budget later.

A qualitative method is the collection of non-numerical data that helps to understand the motives and needs of potential buyers, the reasons for certain behavior, and to detect problems. To this end, you can post feedback forms on the site, collect feedback, create surveys, and conduct in-depth interviews.

Ecommerce Funnel Optimization

There’s a big difference between the ecommerce funnel and the actual user’s path. You can study the performance of your funnel in Google Analytics, or any other analytical tool. The sales funnel of an online store is the sequence of steps that the buyer must take in the opinion of the business. By contrast, the main user journey is the actual behavior of the visitor on the site. In reality, these paths can radically differ from each other: both the sequence of stages and the actions themselves. 

You should take it into account when building an Internet funnel, especially, if you want to repeat sales in the future. Here are the main findings you can use during optimization of ecommerce funnel:

  • A sales funnel is not only the movement of a buyer from the first click to purchase. This is the effectiveness of the marketing tool. The process of customizing an ecommerce funnel for the goals and characteristics of a business involves selecting and testing different methods to attract potential buyers and increase profits.
  • Ecommerce funnel conversion indicates the effectiveness of marketing tools. Conversion is the ratio between the number of potential and actual buyers. 
  • You need to count the conversion not only at the final stage of the funnel, but also at all intermediate phases. The dynamics of indicators is a clear demonstration of the weak and strong points of the funnel.
  • In order not to make complex calculations, you can use CRM systems for ecommerce business. You can evaluate quantitative indicators in Google Analytics as well.

Answer three questions to lead an efficient ecommerce funnel optimization:

Why should people buy in your ecommerce store? Most users leave at the first touch with the site, as the online store doesn’t excite. Therefore, understanding your target audience will help you make visitors want to move further down the funnel.

How convenient is it to choose a product? It is worth considering the functional part of the site: a convenient search with various filters and tips, a large gallery in the product card, a detailed description of the product, user reviews, and so on.

Is it easy to make an order? Consider how difficult or simple it is to pass a checkout, the simplicity and necessity of registration, payment methods for an order, and other factors that can affect the conversion of an online store.

Sales Funnel Optimization Strategies

The best method of boosting the number of people on each step of your funnel consists of seven steps. It is necessary to analyze the target audience, determine the strengths of the product and the brand, and formulate a unique offer. Here are the stages of the best strategies:

Step 1. Creating a top-notch USP

USP is a unique selling proposition from which the client takes information about the real value of the product or brand. It is necessary to show the buyer the strengths of your offer, to convey its value, to indicate its uniqueness.

Step 2. Getting “cold” clients

It is necessary to think over the ways of obtaining “cold” contacts. Perhaps you will use phone sales or decide to collect requests from the site, along with launching a powerful advertising campaign. Already at this stage, it is worth starting to segment the audience.

Step 3. Interest formation

How will you generate interest in your offer from a cold client? How do you point out the strengths of the product to him/her? The solution of these problems rests on the quality of the base of “cold” contacts (these should be representatives of the target audience) and the formation of USP.

Step 4. Working with objections

Using the analysis method, you should identify the most common objections (high cost, mediocre quality, complex structure of the service, unappreciated benefits of the product, and so on). Next, we find a persuasive response to each client’s refusal.

Step 5. Closing the deal

The stage that determines the full conversion of the sales funnel. Here it is worth betting on the USP and the quality of the work of managers. It also makes sense to consider the possibility of working off lost clients – the easiest way is to return them to web pages using special services.

Step 6. Analysis

Constant analysis of the effectiveness of the sales funnel helps to find flaws not only in the marketing concept, but also in the business as a whole. You determine the stages at which you get the most failures and correct them.

Step 7. Increase conversion

Conversion boosts when it’s possible to convert potential customers into real buyers and customers in the ecommerce funnel. It is necessary to develop tools for effective interaction and methods of persuasion.

Funnel Goals in Google Analytics

A goal is a significant action of a visitor on a website that you should record and track. Usually, you should take conversion action as a goal: a purchase, a subscription to a newsletter, etc. But you can track the steps before a conversion – micro conversions or a sequence of actions to determine at what stage users leave. Google Analytics goals show how often users take the desired action in your ecommerce funnel.

What types of goals you can find in Google Analytics

Landing page. A conversion is registered when a user lands on a specific page (for example, “Thank you for the order” or “Thank you for signing up”). For this goal type, you can specify a conversion sequence, which is the user’s expected path to the landing page. Google Analytics will allow you to find out at what stages the traffic leak occurs and take action.

Duration. A conversion is recorded if the user spent a certain amount of time on the site (for example, browsing the site for 10 minutes).

Pages/screens per visit. Google Analytics records a conversion if the user has visited more (or less) than the specified number of pages on the site (for example, loading of 5 pages or screens).

Event. Google Analytics registers when a user performs a specific action (for example, log in or video playback).

Your aim is to control all the aspects of the funnel in Google Analytics and never miss elementary logics. If you see that anything goes wrong in user behavior according to analytics, you should try to put yourself in the position of your customer and present information the way he/she is eager to see.

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