In today’s tech-savvy world, consumers seldom buy from an online store on their first visit. Researching products online and comparing shipping rates or discounts have become the norm with eCommerce customers.
Sometimes, your visitors may leave your site even before checking out with any of your products. They may get distracted or move away from their laptops or smartphones. In fact, the average eCommerce conversion rate is only 2.63%.
Although you can’t guarantee that visitors purchase from your store on their first visit, you’ll stand a much better chance of converting them if you devise an effective eCommerce sales funnel that responds to your customer’s buying journey.
Here, we take a look at what a sales funnel is, how to create and measure its success, and how to increase your conversion rate as a result.
What Is an eCommerce Sales Funnel?
An eCommerce sales funnel illustrates your customer’s journey from the moment they become aware of your product to when they make a purchase. The sales funnel may also include customer retention, cross-selling, and subscription-based sales.
Depending on the products you offer and how users navigate through your eCommerce store, your conversion funnel might change in specifics. For example, you might have a shorter funnel and a faster conversion rate if your prices are lower, because consumers have one less thing to worry about when deciding whether to purchase your product.
Nonetheless, there are some basic steps to creating an effective funnel that hold true regardless of your target audience or type of business.
Why Your eCommerce Company Needs a Reliable Sales Funnel
A reliable sales funnel allows you to analyze which areas of your eCommerce business drives sales and which areas need to be optimized for increasing your conversion rate.
Your conversion funnel might show, for instance, that your audience uses social media to follow your store’s promotions or discounts. Armed with this information, you might want to boost your presence on social media platforms like Facebook or focus on driving more traffic to your site by attracting more Facebook followers.
What is the Average Conversion Rate for an eCommerce Sales Funnel?
To best understand how a sales funnel works, and the average conversion rate you should expect for your site, Smart Insight’s visual diagram comes in handy.
As this example shows, nearly 50% view a product page, but only 15% add a product, and much less, only 3.3% actually make a purchase. Such a difference in conversion rates shows how important it is to improve your landing pages with compelling CTAs that encourage users to buy your product. Simplifying the checkout process and boosting the speed of transactions will also help optimize your conversion rates for maximizing sales.
The 5 Essential Stages for Your Successful eCommerce Sales Funnel
Since a sales funnel represents a model for your consumer’s buying journey, it is marked by five main stages. Your consumer moves though each of them starting from the moment they learn about your product to the moment they make a purchase.
1. The Awareness Stage
The awareness stage is at the top of the funnel and represents your initial exchange with potential customers. They become aware of your eCommerce business, your products and services, and the benefits and solutions you offer to whatever their problems are.
The information and content you deliver to potential users is especially important at this stage, because it may highlight a problem that consumers are unaware of. Convincing content identifies your target audience, introduces your brand identity, and offers solutions to potential problems for your customers.
The best strategy is not to try too hard, but to deliver valuable information focused on educating your audience on the benefits of using your products and services. The goal at this stage is to inform, not sell.
But content is not the only thing that initiates better site traffic. Because whether your user is searching for a specific product or searching for a service you offer, they will learn about your company through a web search. Search Engine Optimization (SEO) becomes a crucial strategy if you want to end up on top of Google’s search results.
You can use several tactics to improve your search rankings and increase traffic to your site. One of the best ways is to write long-form copy that educates your users with blog posts, but you can also utilize downloadable material like videos, white papers, and pdfs. Using short videos or visual content through Facebook Ads can also be a great way to introduce your brand.
Ultimately, you want engaging content that not only informs but also builds trust with new customers. Since Google largely ranks its results based on engagement - or clickthrough rate (CTR), your best bet is to have interesting material that encourages clicking with compelling CTAs and links.
2. The Interest Stage
At this second stage, you have delivered copy compelling enough to draw your customers’ attention. The truth is that not every potential user who learns about your eCommerce business is interested in learning more about it. Each customer journey is different and users have equally different motives when they navigate your site.
If the consumer is interested, they initiate contact. They may subscribe to your newsletter, download an article, or become a follower on social media.
You can facilitate your customer’s move through this stage by using different strategies. Fast and easy navigation is key since your customers are essentially window shopping for your products or services.
If navigating between pages becomes a hassle, they may abandon the site before moving further in the funnel. Make your inventory searchable and utilize filters so it’s even easier for your visitors to explore everything you have to offer.
Another strategy often used at this stage is to include links to your social media like Facebook, Instagram, or Twitter. It’s a perfect place for potential customers to chat and connect with your team.
To engage your audienceeven further, you may include a clear Call to Action. However, this isn’t the time to pitch your actual product. Instead, offer something like a discount just for visiting a landing page or use a pop-up offer that gathers email addresses in exchange for something your customer would value (e.g. this could be a helpful eBook).
3. The Decision Stage
Once consumers have browsed your website and looked for the different products or services you offer, they’ll decide whether or not to buy from your store. Here, your goal is to convince them of the value and benefit of your product and prove the initial claim you made about it.
To convince consumers that you are a genuine brand, you can use strategies that highlight user reviews or word-of-mouth, social media content, expert reviews, or case studies.
Sometimes, reviews from recognized experts or authorities are necessary. You can also cite reliable research and testimonials are also a great way to support your claim. Many look to scientific facts for purchasing such items.
Clear product descriptions and high-resolution images can help consumers decide, especially with products that have a heavy visual appeal like clothing, artifacts, jewelry, and the like.
To give an extra nudge, you can also offer things like:
- Free Shipping
- Gift Cards
- Easy Returns
Not only are these enticing promotions, but they also encourage further engagement from consumers to buy from you again.
4. The Action Stage
The action stage is the final pushbutton in a customer’s buying journey. This is when your customers follow through with their transaction by making a purchase. Facilitating the checkout process is key, since a smooth buying process gets them to the next step in the funnel: to buy again.
To improve your online checkout process, you can focus on several tactics.
Creating a sign-up process can beone of the easiest ways you can make the checkout experience more convenient. By having an account, your customers can automatically fill payment and shipping information, have access to previous orders, or reorder items faster. It saves time and eliminates the hassle of filling forms every time they make a purchase.
That said, for other stores, requiring guests to sign in before purchasing may not be the best idea. Your customers may consider it a hassle, so do some testing here to see which method works best.
Yetanotherfrequently used tactic, especially for checkouts processes that take several steps, is to have status indicators that inform your customers where in the process they are. When you have a multiple-page checkout, it’s important to have the Checkout Basket on every page, so your customers don’t abandon the transaction to look for information about their purchase.
If you ensure your customers that their personal and payment information are secure, they are more likely to continue with the checkout process. Having a constant reminder of secure purchases by placing security certificates and messages in the footer of every page on your site will bring peace of mind to your buyers.
Lastly, you can accept multiple methods of payment to meet your customer’s preferences. This is true for card types as well as digital ways of payment like Amazon Pay, Apple Pay, or Paypal.
5. The Repeat Business Stage
There is yet another stage in the sales funnel that happens after your customers make a purchase, and it’s the ideal goal for any eCommerce business: to have returning customers who enjoyed the buying experience.
Customer retention is crucial because this group of customers can advocate for your brand, refer a friend, share their experiences on social media, and ultimately grow your business with referral sales or brand advocacy.
This is why rewarding your loyal customers is an effective way to establish a strong customer base. You want the best possible experience for repeat customers with features like loyalty programs, gift cards or bonuses for repeating purchases, discounts or prizes for best customers on social media, or VIP invitations to exclusive events.
A good example is Sephora’s Beauty Insider program, which provides a private hotline and invitation to exclusive events for their most loyal buyers, those who buy $1000 per year from the site.
They also offer other tiered levels with even greater rewards, further encouraging customers to shop with them again and again.
Setting up a loyalty program is super easy. Shopify, WooCommerce, BigCommerce, and Magento all have plugins for such programs. After you install the right one for your site, you can improve it by tailoring the program to your target audience by offering custom surveys, promoting the program on your site or social media, or giving freebies or reward points to get your loyal base going.
Measuring the Success of Your eCommerce Sales Funnel
Once you have set up your sales funnel and get it going, you need to measure how well it’s working for your site, identify gaps, and optimize those areas that need improvement.
Here are three of the most important metrics you can use to analyze your funnel strategy’s effectiveness:
1. Traffic Acquisition
Hopefully, you’re already analyzing your eCommerce site’s traffic. It’s especially important if you want to see where you might have gone wrong with your sales funnel.
If you analyze the site traffic for each of your funnel’s stages--Awareness, Interest, Decision, Action, and Repeat Business--you will quickly notice if there’s a sharp drop in site traffic.
For instance, if a large number of shoppers visit your site at the Awareness stage, but only a small amount make a purchase in the Action stage, you may have to redesign your marketing strategies to better suit your target audience.
Start by coming up with a baseline conversion rate for your eCommerce sales funnel. We covered this at the beginning, but you’ll want to figure out what your current rate is, give yourself a goal to work toward, and then regularly check back on all of your funnel’s stages to make sure you’re making progress.
2. Actual Conversion Rate
Fortunately, you can easily calculate your actual conversion rate by using the following formula:
(Total number of transactions/Total visits) x 100
Remember that the average conversion rate for most eCommerce sites is a little over 2%. So if you are getting 0.5% conversion rate, you might have to rethink your sales funnel to see what prevents your site’s visitors from moving to the next step in the customer journey.
You can check some pro tips which can help you improve your conversion rate and meet your sales objectives.
3. Cart Abandonment Rate
Sometimes, your potential customers add a product to their cart but leave the site before making a purchase. They basically remain at the purchase stage, which is why it’s super important to understand what keeps them from completing the transaction. There might be a glitch in the checkout process or hidden fees that deter your potential buyers.
Understanding your cart abandonment rate will help you optimize your sales funnel in a big way. If more than 69% of your visitors abandon their purchase, your website content is not delivering as it should.
You can try several tactics to reduce your cart abandonment rate as much as possible, some of which include:
- Guest Checkouts
- Progress Indicators
- User-Friendly Navigation
- Product and Social Media Reviews
Any of these will most likely make it easier for your shoppers to become customers.
If you manage to convince the customers with abandoned carts to complete their transactions, you will increase your cart recovery rate. The higher the rate, the more effective your content is at driving customers back to the site. You have established their trust by delivering content that is interesting and informative.
How to Increase Your Sales Funnel’s Conversion Rate
After you analyze your funnel’s performance, you need a foolproof way to increase your conversion rate and improve your analytics. You cannot rely on intuition to know how your audience will react to your site’s content. One of the best methods to predict user behavior is A/B testing, often also called split testing.
An A/B test studies two groups of people who view a slightly different version of the same content over the same period of time. The single element that changes between the two groups is called a variable. The variable for your A/B test can be the page layout, color, button, or pop-up triggers, among others.
Studying the performance of the two versions can give you important information about what makes your buyers tick - and click! - and which features are most effective in converting them into leads.
To do an A/B test, you need to make the variable you have chosen independent of all other features of your site. This means that, although you can test multiple features, only one element can change between the two groups at a time. The smallest of changes - like an image, wording, an email’s sender name - can be tested for different user behaviors.
In case you decide that you need to test multiple variables at one time, you can go for a multivariate instead of an A/B test.
Treating Your Sales Funnel as a Priority
Creating a sales funnel might seem like a complicated process, but it should be at the very top of your to-do list if you want to improve user experience, generate sales, and increase conversion.
An effective funnel gives you the right data on how your users navigate your site. You can then use marketing strategies that target the specific gaps in your funnel for the best results.If you’d like any help creating and implementing these types of powerful strategies, feel free to contact us to speak with an experienced eCommerce expert.