What is a Sales or Conversion funnel?
Date : July 11, 2019 By
You’ve probably heard about the sales funnel or conversion funnel, a common term in online marketing. This concept, also called sales funnel, is used to define the steps that a user must take in a web page from the moment he or she accesses until he or she fulfills a goal, generally, the subscription or the purchase of a product or service.
The sales funnel is used to know how many potential customers are lost along the way and at what stages they give up. In this way, it is possible to find the weak points of a web and focus optimizing them to improve the conversion ratio.
The steps that the user must take depends on the objective set in the online marketing strategy. For example, if you have an electronic commerce, the conversion funnel could have four basic steps: enter the web, access a product file, add it to the cart and finalize the purchase.
In this process usually the same situation always occurs: there are many users who enter the web but, at each stage, a part of them leaves until only a small percentage makes the purchase. When many visitors are lost along the way, it is convenient to detect where and analyze the reasons for abandonment.
Is it useful to analyze the sales funnel?
As you know, a very important part of any online marketing strategy is metrics. And the conversion funnel is a metric that offers us the percentage of loss of users in each step to achieve the stated objective (a sale, a subscription, etc.).
Therefore, analyze the conversion funnel to know the weak points of the web and improve them to reduce the percentage of losses. In other words, sales funnel metrics help us improve our business objectives.
Thanks to this analysis of user behavior we will obtain valuable information:
1. In which phase users leave
One of the black spots of the electronic commerce is the abandonment of the cart. If most of your users do not finalize the purchase it may be due to the complex payment process or the very high shipping costs, for example.
2. What percentage leaves at each stage
It is not the same as a user leaving nothing else enter that after filling the cart. If the percentage of rebound is very high in the home, it will be necessary to rethink the design and usability from scratch. If the weak point is the forms, we will have to focus on them (you may ask for too much data, that is difficult to find or that is not well designed).
3. Calculate ROI or return on investment
Online marketing campaigns measure their effectiveness through ROI, a fact that tells us how much it costs us to attract new visitors to turn them into customers. Sometimes, the efforts of the business are focused on attracting a large number of visits but of poor quality, which is why you are losing yourself in the conversion funnel.
If this is your case, you may need to redefine the profile of your ideal client or change your online marketing strategy to attract fewer visitors but of higher quality, that is, users who are truly interested in your products or services.
With all this information it is easier to detect the areas of improvement of the web.
How to create a sales funnel that improves the results?
The first step of any online marketing strategy is segmentation. Knowing the profile of the ideal client of your business is essential to attract only people who have a real interest in our services or products to the sales funnel.
Converting visits to subscribers and, later, to clients is the key point within the conversion funnel. This can be achieved in different ways but they all have something in common; again, segmentation.
The list of subscribers must be segmented according to their interests and, subsequently, offer relevant content for them.
It is essential to understand how you think and how each visitor reacts to meet their needs . The best way to achieve this is to put yourself on their skin. The conversion funnel must be analyzed from the user’s point of view and its location in the sales funnel.
Conventionally, the sales funnel usually has 3 key phases. Let’s see what they are.
1. First phase (Top of the Funnel)
It is the phase in which there are more visits. The objective at this point is to get the user to leave their data. The way is a subscription form. But, for a visitor to subscribe, he must be motivated.
How is a visitor motivated to become a subscriber? One of the most used strategies is to offer something in return: a guide, a product sample or any other gift.
2. Second phase (Middle of the Funnel)
We already have subscribers. Now we must guide them through the sales funnel to turn them into customers.
One of the usual strategies is the sending of newsletters and promotions. For email marketing to be effective, it is necessary to know how close to the sale each subscriber is. The further away you are, the more informative content you have to give it.
3. Third phase (Bottom of the Funnel)
Subscribers who are in this stage should receive more focused content for immediate sale, with more powerful calls to action.
In short, if you do not want visitors to your website to get lost along the way, study the sales funnel and its weak points. Review your strategy, analyze the reasons for abandonment and improve those aspects.