How to Build and Optimize an Ecommerce Sales Funnel
We both know marketing is about putting the right message in front of the right person at the right time.
And an eCommerce sales funnel is simply a step-by-step framework for moving someone down a path until they become a buyer.
The good news is, we can optimize our eCommerce funnel to increase conversions at each step using a mix of Ads, CRO, Copywriting, and Psychological Triggers.
In this article, I’ll outline the foundations of building a high growth eCommerce sales funnel and the highest leverage points for optimization. So you can turn more people into customers and increase revenues month-over-month.
The anatomy of a conversion funnel in eCommerce
There are four stages to any eCommerce funnel that convert people into buyers and then repeat buyers:
Stage 1: Awareness
Stage 2: Consideration
Stage 3: Decision
Stage 4: Loyalty
Moving someone from being a complete stranger to becoming a customer can be done in the space of a few minutes, days, or even months and years.
Look at the likes of Squatty Potty, Poo-Pourri, or Dollar Shave Club. They created awesome video ads that took people all the way through the first three stages and became viral sensations.
The fact is, if you can make people aware of your product, sell them on the benefits, show social proof, and make an irresistible offer, then right there and then you can get a buying decision.
And all that could be done in a few minutes.
But most companies aren’t on this level. And you’d have to have an impressive ad to convert someone into a buyer so quickly.
However, in most cases and for most eCommerce stores, you’ll move people through your funnel with multiple touchpoints from Ads, YouTube videos, retargeting, content marketing, email — there’s a lot of ways to do it.
Ecommerce funnel conversation rate benchmarks
The latest data on global conversion rates for eCommerce stores is around 4.31%, while the US average is around 2.63%.
This means 97.37% of your traffic isn’t converting into buyers. And if you don’t have a good conversion funnel in place scooping these people up, you’re missing out on a serious amount of sales.
All that ad spend, organic traffic, and hard work on content marketing — all wasted if you can’t move people down your funnel.
So let’s dive into the four stages and see how you can optimize and build each one to be a highly tuned machine.
1. Awareness Stage
This is the very top of your eCommerce funnel. And it’s where your goal should be to get the largest amount of eyeballs on your site and content.
It’s at this stage where people are aware of their problem and they’re looking for solutions. So it’s your job to put your brand in front of these people and make them aware of who you are, what your product is, and how it can benefit their life.
If your brand can be top-of-mind for a specific category or solution to a problem, then you’re doing it well.
Stage one all comes down to eyeballs and messaging. Getting the right message in front of the right pocket of people. We don’t want everyone, that would be a waste. What we do want is a defined target audience we can remarket to and push down the funnel.
Best ways to do this:
- Content marketing: Blog articles, YouTube videos, podcasts, social media.
- Paid traffic: Google search and shopping ads, social ads, Youtube ads, native ads.
- Partnerships: Setting up relationships with indirect competitors or people who serve your target demographic, even outside your industry.
- Referral traffic: Setting up a referral system with your existing audience and customers and incentivize them to refer friends. This already has a ton of built-in social proof and can rapidly grow your brand.
Think about how you want to position your brand, what you want to stand for, and what makes your brand attractive. If you’re vanilla, you’re going to have a tough time getting people into your world.
There’s a famous saying in marketing, “Different is better than better”. Being better than your competition is great, that’s’ pretty much a requirement nowadays. But being different… that’s how you stand out and get noticed.
That’s when you can own a category in the mind of your audience. And once you’re top of mind, and given the right situation, it’s only a matter of time before people buy from you.
In recent years, brand transparency became big. People are moving away from the large faceless brands and movings towards the micro-brands, the trusted influencers, and the brands and people who stand for something.
So plant your flag, stand for something, and educate people about your product and values.
Then it’s just a case of showing up…. every…. single… day.
There’s something to be said for showing up and becoming top of mind. It puts you and your brand in a position of power and cuts through the noise.
Recency and frequency. Remember these two, pair them with the right messaging, and you’ll always have customers and be bringing new people into your world.
The next stage in our funnel is ‘Consideration’. This comes after people know your brand, they know your values, and they’ve seen the benefits.
2. Consideration Stage
They know you, but do they trust you?
That’s one of the biggest obstacles at this stage in the funnel.
People don’t know whether to buy from you or a competitor, or whether they should buy anything at all.
Because you’re not just competing with other companies, you’re also competing with the option of doing nothing. And that’s a tough one.
So how do you move people to action? That’s what this stage is all about.
If we dive into the mind of our audience, we know they’re looking at other solutions. We know they’re being bombarded with retargeting ads from competitors (if they’re our competitors are doing their jobs right).
And we know that right now, we’re not in a position of power… The prospect holds all the cards and they’re holding them close to their chest.
We just have to guess what they’re thinking and try to push them, remove all objections to the sale, remove risk, and allow them to make a decision — all in the nicest possible way.
How do we do this?
The best way is with retargeting ads, product page copy, and social proof.
At this stage, if you can get User Generated Content (UGC) of unboxing videos, influencer videos, and testimonials, then you’re way ahead of your competitors.
Side note: Influencer marketing seems difficult and doesn’t really pay off when you pay someone to make a video for you and it goes out once to their audience. However, use that content and those video assets in your own marketing, with your own ads that you can run again and again… That’s how you make influencer marketing profitable.
Anyway, back to the objections and removing risk…
There are usually not many objections a person can have. So it can be easy to create content to overcome and breakdown objections in the mind of your audience before it stops the purchase.
The tricky thing is finding these objections and truly understanding what people need to see before they buy from you. That’s why here at GrowthHit, we do a lot of research for all our clients to dive deep into the psyche of their audience. We can do this with qualitative research methods like heatmaps and scroll maps, session recordings, exit-intent, true-intent surveys, and user testing. There are lots of research methods available, it’s just a case of diving deep and analyzing the data to figure out how best to move people to become a buyer.
Once you have that figured out, you’re golden!
These insights will help you create your product pages, your messaging, and even help better position your brand in your ads and emails.
And speaking of messaging, if you can get people on your email list, do it.
The ROI of email is incredible if you do it the right way, creating follow up sequences and using compelling copy, handling objections, and showing social proof.
The GrowthHit team has been running eCommerce email and SMS campaigns for years and have had amazing results. So if you’re only using ads for retargeting visitors, consider using email and SMS too.
Next up in the funnel is the ‘Decision’ stage.
3. Decision Stage
This is where the magic happens.
When you’ve done everything you can do to get your visitors to take action, add something to their cart, and nearly reach the end of the journey.
But unfortunately, there’s still more you must do.
People can still abandon their cart and go to a competitor. Sure, you got a micro-commitment with them clicking the ‘Add to Cart’ CTA, but you’re not out of the woods yet.
At this stage, we still have to nudge them forward and reduce any and all distractions.
If you’re using Shopify, there are some things you can do to better help push the sale forward with your cart and checkout flow.
Even when people click on your cart, they could still have objections around the security of your brand. You can reinforce feelings of safety and security with credit card badges, customer service phone numbers, and objection handling copy around returns and guarantees.
Harry’s is a great example of a distraction-free checkout, with header navigation links removed, clear pricing, and objection handling copy around quality and refund guarantee.
Offering multiple ways to pay can also lead to a significant amount of revenue increase. And if you’re down with using something like Afterpay for multi-payment terms, then you might find you can save even more sales.
But if you can’t save the sale at the checkout and they abandon, then you’ve still got retargeting ads and emails to save the day.
Having an abandon cart email sequence, written with compelling copy and social proof can be a game-changer for your business if it’s set up the right way.
Pair this with retargeting ads on social media to keep you top of mind and subtly nudge the person back to the checkout… Well, you’re going to be rescuing a whole bunch of sales and wondering why you never optimized your retargeting and email sequences before.
Lastly in our funnel is the ‘Loyalty’ stage.
Let’s dive in and finish this.
4. Loyalty Stage
At this stage, you’ve got people to buy from you.
Now we want them to come back and buy again and again.
But that’s not all… We also want them to recommend you to their friends and become brand evangelists.
So how do we do this?
One of the best ways of doing this is getting people to buy something from you immediately after buying through the use of upselling.
Not only does it increase your AOV, but it means you can dump more money into top-of-funnel traffic and outspend your competitors.
Backend profits are just that, all profit.
For established eCommerce stores, a significant amount of their revenue will come from returning customers and repeat buyers.
This is when email marketing really shines, to carry on the relationship and push more people to buy.
If you can dramatically increase both your AOV and your LTV, then you’re in a really great position to spend money on traffic and dominate your competitors who are relying mostly on their front-end purchases.
So optimize the heck out of your back-end email marketing.
And don’t treat all your customers the same. You have whales, salmon, and minnows among your customer base. Each segment will have different spending habits. And when you look at your data, you’ll soon find the most profitable bunch.
Create targeted behavioral-driven email campaigns and even physical mail campaigns to win back customers and drive revenue with highly segmented events, sales, and offers.
Discounts, referrals, review and loyalty programs, optimized thank you pages… There are many ways to engage your customers and get them to either spend more, buy more often, or refer their friends.
It’s just a case of choosing a couple of methods that fit with your brand and going all-in on them. And if one doesn’t work, pivot to another until you find one that does. Because the truth is, they all work. It’s more about the execution than tactics.
There we have it.
We’ve walked through the entire eCommerce conversion funnel. And you’ve learned some high-level strategies for getting more customers.
Hopefully, I’ve opened your eyes to the importance of knowing your customer and their objections, and just how critical doing user research is to find these.
Because a conversion funnel, marketing funnel, sales funnel… whatever we call it, all it really is a buying journey. We all buy things online and offline, but the trouble is we don’t think much about what made us buy or why we didn’t buy.
So the next time you purchase something, give it a second thought. What did you see that pushed you over the edge? What would have made it easier for you to buy? And how did the company overcome your objections?
When you change your mindset and start analyzing even the small nuanced things great companies do, you can reverse engineer the funnel and gain inspiration for your own brand.
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