Making a purchase is not straight forward, every customer goes through multiple stages before they complete a purchase. They first check out your website, go through your product listing, shortlist a few products, read reviews, visit your competitors’ websites, and eventually come back to you to place an order. Without you having realized it, your customers have traversed through an E-commerce funnel.
Every stage in this funnel has an important role to play and influence the chances of conversion. In this guide, we will take you through all the stages of an E-commerce sales funnel, along with some handy tactics you can employ for optimization.
An E-commerce sales funnel is a conceptual framework used to describe the different stages that a potential customer goes through when making a purchase online. As you would have rightly guessed, the funnel is a representation of the customer journey and not a specific path or a predefined process. It is simply a way to categorize all the potential customers of your online business into different buckets based on how close they are to being converted into customers.
Here are some advantages of implementing an E-commerce sales funnel for your brand:
By creating an E-commerce sales funnel, you know everything about the customer’s journey, right from when they landed on your website to when they completed a purchase. This means you have better visibility over various drop-off points in the customer journey, and you can try eliminating those bottlenecks.
An E-commerce funnel is designed to enhance the overall customer experience by minimizing friction and confusion. It ensures that customers find what they need quickly, reducing the chances of frustration and cart abandonment. You, as a business owner, can play your part by using a sales funnel to provide right information at the right time to your customers. Ultimately, improving experience and conversion rates.
An E-commerce funnel helps in fine-tuning your marketing efforts by providing key data related to customer interactions. You will know what works and what doesn’t in your business and industry as a whole. Data-driven approach in marketing will help you stay ahead of your competition.
An E-commerce funnel allows you to build retargeting strategies to remind and persuade customers who have abandoned their carts. It can also help make necessary changes to your website to reduce cart abandonment. For instance, if most of your customers are leaving at the checkout stage of the funnel, you can minimize distractions and barriers, thereby reducing cart abandonment rates.
Here are the 5 different stages of a typical E-commerce conversion funnel –
The awareness stage in an E-commerce sales funnel is the phase where your potential customers become aware of your brand and products. This is the broadest part of the funnel, where you cast a wide net to attract a large audience, also known as top of the funnel. During this stage, your target audience might not have a purchase intent. In fact, many of them might be discovering your brand for the first time.
This is one of the most important stages of the E-commerce funnel because you can attract many users to your online store. Based on the information you provide, these users might become your customers. Hence, your goal here should be increasing brand awareness and top of the funnel recall. Here are some key steps you can take:
Farida Gupta, the popular clothing brand, has mastered the art of the awareness stage. They post regular brand-specific content on platforms like Instagram and Facebook to improve brand visibility and attract more visitors to their website.
Source: Farida Gupta
In this stage, your potential customers have demonstrated interest in your product but have not yet committed to making a purchase. They may have engaged with your website by browsing products or adding items to their cart. Your primary goal during the interest stage must be to further engage and nurture these potential customers and move them closer to making a buying decision.
This is the stage when customers start to compare different options, including yours. So you must help them by showing why your products are better than others. The best way to do this is by educating them about your product and its benefits. Here are a few things you could do:
Hamleys, the renowned toy brand, lets customers subscribe to their newsletter on their website. Once subscribed, customers are regularly sent updates about new primary arrivals. The primary goal of this activity is to pique the visitors’ interests and get them to place their first order.
Source: Hamleys
This is the middle of the funnel stage where your potential customers are convinced about the potential of your product but might have some reservations. It could be the pricing or benefits they are getting. Your goal at this stage must be to eliminate all the skepticism and doubts they have in their mind about your products. All they need is a little push from the brand to make the purchase.
In this stage, you must go beyond product features and talk about the actual benefits the customers will get by purchasing from you. Formulating your statement in the form of benefits, not features, will convince your customers to go ahead with the purchase. Here are some strategies you could adopt:
Here is Pepperfy, the furniture retailer, offering and highlighting time-sensitive discount coupons on every product detail page. Such incentives will convince most customers to add the product to their cart and proceed to checkout.
Source: Pepperfry
This is the stage where your leads are going to turn into customers. They are completely convinced about purchasing from you and are on the verge of placing an order on your website. Even though it may seem like you are going to gain a new customer, you must be careful. The action stage (also known as bottom of the funnel) is where maximum cart abandonment occurs. If your checkout process is not seamless, people will abandon their carts.
You must make the buying process as seamless and user-friendly as possible. Successfully guiding customers through the action stage results in completed purchases and, ideally, satisfied customers who may become advocates for the brand. Here are some ideas you can adopt:
Myntra, the fashion brand, has created a seamless checkout experience for its customers. Besides auto-populating most of the checkout fields, it offers a variety of payment options so that the customers always go ahead with the purchase.
Source: Myntra
Your relationship with customers doesn’t end with them making the purchase. You need to retain and convert them into repeat customers. The goal of this stage is to reignite the interest among your existing customers and remind them of the value the brand offers. This stage not only helps rekindle relationships with existing customers but also leverages the data and insights gathered from their previous interactions to create tailored and effective marketing campaigns.
This stage of the E-commerce funnel requires strategic and targeted approaches to reconnect with past customers and revive their interest. Here are various strategies you can adopt:
FabIndia has an excellent loyalty program to re-engage its existing customers. Once you enroll in this program, you need to shop across their stores to earn coins, which you can later spend on shopping with them or their rewards partners. This is a great way to make customers continue to shop with them and increase their customer lifetime value.
Source: FabIndia
A well-structured E-commerce funnel can become your pathway to nurture and convert visitors into loyal customers. Here are the steps to create an effective E-commerce funnel –
The first step in building an effective E-commerce funnel is to define your conversion event. This is nothing but the specific action you want your users to take on your website to get them closer to becoming valued customers. A typical conversion event could be:
Defining your conversion event in the early stages offers clarity on your primary objectives and enables you to create a seamless user journey that will help your business achieve those objectives.
In order to create a funnel that resonates with your audience, you need to thoroughly understand your target audience. And the best to do this is via detailed buyer personas. To the unversed, a buyer persona is a fictional representation of an ideal customer. It will typically have details such as demographics, interests, pain points, and preferences.
Once you have created the buyer persona, map out the customer journey. You need to identify specific touchpoints where these potential customers interact with your brand. This, in turn, will help you align your funnel stages with the buyer’s path. But how to do this? Let us find out in the next step.
To map out the different stages of your E-commerce funnel and align them with where your potential customers are in their buying journey, you need to first consider the different triggers that will push them down from one stage of the funnel to another. For instance, if a visitor sees one of your product listing pages, you need to find out what could be their subsequent actions. Will they explore further about the product? Will they directly add the product to the cart? Will they close the website?
By understanding different scenarios, you can strategically implement triggers that guide visitors through each stage — from awareness to becoming loyal customers. For instance, if you’re a clothing brand and you think maximum customers have questions about sizes and fitment, you can include a size chart on the product page and(or) add true-to-size tags to eliminate any doubts in the minds of customers. This will eliminate the friction that was present between the two stages of the funnel so that the potential customer can easily pass through.
Your landing pages are one of the most critical elements of your E-commerce funnel. It is the first touchpoint between your brand and a potential customer. It sets the tone for the entire customer journey, right from the awareness stage to the action stage. If your landing pages are poorly optimized, you risk losing valuable prospects in between the funnel stages.
So, you need to ensure that they are designed with conversion optimization in mind. They should be able to clearly direct the visitor to perform a specific action. It could be clicking on the add to cart button or signing up for newsletters. Ensure that every page has the following:
The E-commerce funnel is all about getting continuous traffic flowing to your website. So, it is important to diversify your traffic sources by leveraging other channels as well. It could include social media, PPC ads, email marketing, affiliate marketing, etc. By diversifying your traffic sources, you not only increase your website traffic but also tap into different audiences, demographics, and behaviors. This helps in creating a more comprehensive and resilient E-commerce funnel that will drive more visitors to your website.
Each channel should be strategically used to attract potential customers to your website. For instance, if you own an E-commerce store selling jewelry, you can use social media platforms like Instagram and Pinterest to showcase visually appealing images of your jewelry pieces. This will enable you to engage with a highly visual audience. Similarly, you can use paid advertising on Google to target users in a particular city. Meanwhile, for email marketing, you can segment your subscribers based on their past interactions with your brand and send personalized product recommendations or exclusive discounts.
Retargeting is the process of re-engaging potential customers who have progressed through the initial stages, such as the Awareness and Interest stages, but abandoned their shopping carts as they moved down the funnel. Retargeting is nothing but a strategic effort to recapture these valuable leads, guiding them back into the funnel and encouraging them to complete the purchase.
Here are some effective retargeting strategies you can adopt –
The last step is to measure the success of your E-commerce funnel. Without measuring, you will be unsure of where improvements are needed and where successes can be amplified. You will also gain valuable insights into your customers’ behavior, pinpoint bottlenecks in the funnel, and assess the overall effectiveness of your funnel strategies. Remember – measuring the success of your E-commerce funnel is not just about tracking numbers; it’s about ensuring the long-term viability and growth of your online business.
Some of the tools that can help in this step are:
Tracking and analyzing key metrics and Key Performance Indicators (KPIs) at various stages of the conversion funnel is essential for optimizing your online sales strategy. Let’s break down these metrics into three critical stages:
These metrics measure the effectiveness of your funnel strategies in attracting visitors to your website. In other words, they provide crucial insights into the effectiveness of your top-of-the-funnel marketing efforts. Understanding and optimizing these metrics is vital for creating a strong foundation for your E-commerce journey, as they determine the quantity and quality of prospects entering your funnel. Here are some Top-of-the-Funnel metrics you need to measure:
Middle-of-the-funnel metrics are important for evaluating the effectiveness of your efforts during the interest and desire stage. These stages are all about building relationships, gaining trust, and moving visitors closer to becoming paying customers. So, you need to measure the success of your lead generation and engagement strategies. This will help you identify opportunities for improving the conversion rate from casual interest to deeper involvement. Here are some Middle-of-the-Funnel metrics you need to measure:
These metrics are the ultimate indicators of your E-commerce success. They reveal the direct impact of your marketing efforts on revenue generation and customer loyalty. They provide insights into how effectively you are converting leads into paying customers and maximizing the value of each transaction. Here are some of the bottom-of-funnel metrics to track:
Hopefully, by now, you can design your own E-commerce funnel and optimize it using the different strategies highlighted in this post. The more you invest in fine-tuning your funnel and these strategies, the better will be your conversion rates.
If you don’t know where to start, ANS Commerce can help. We are India’s leading E-commerce expert, helping businesses navigate the competitive landscape of online selling. We can help you build and strategize the perfect E-commerce sales funnel for your business so that you can reap the benefits without investing too much time. To know more about ANS Commerce, contact us now.
