Conversion funnel: this term is a hit at industry seminars and webinars. When you are still not sure what exactly this is about, it may seem like a fanciful, unimportant concept. Meanwhile, the sales funnel takes into account the behavior of your customers - if you plan it consciously. It allows you to tailor communication to individual stages of the purchasing path.
What will you learn from the article?
In today's article, we will explore a topic that is crucial for anyone running an online business - the conversion funnel. You will learn what a conversion funnel is and why it is indispensable in your marketing strategy. We will discuss how to build an effective conversion funnel model, what its key stages are and when it is worth using it. We will also analyze how to measure the effectiveness of the conversion funnel and what metrics are important. Finally, we will discover the secret of an effective conversion funnel and answer the question whether 1% conversions are a lot or a little. Ready for a dose of knowledge? Let's get started!
In the US, the conversion funnel is only 32% in use. companies. It is estimated that in Poland this indicator may be even lower. On the other hand, in some industries the ratio reaches 100 percent...
96 percent website visitors are not ready to buy something. The sales funnel was created to gently guide potential customers through the various stages of brand awareness. Starting with a casual glance at blog posts or landing pages, through signing up for mailing, after an irresistible desire to make a purchase.
The effectiveness of the conversion funnel also depends on the medium you use. For example, for organic traffic on the website it is on average 16%, with Google Ads - 3.75 percent, and in social media - 0.71 percent. Interestingly, it also matters whether your customers use the phone or the laptop. On mobile devices, only 1.53 percent on average. people decide to buy. Meanwhile, the sales funnel works on an average of 4.14 percent. people who use the computer.
Conversion funnel - what is it?
The conversion funnel is the path your customer takes from the first interaction with the brand (search engine advertising, e-mail in the inbox) to making a purchase decision. We refer to them as funnel steps. Funnel model is presented as a kind of inverted pyramid, specifically, a funnel, hence the name.
What do the individual steps of the funnel look like? The top of the funnel includes all the random people who got the message or saw the banner. Below are those who are interested in it. This is an extremely important part of the sales funnel. It involves building awareness. Even lower are those who are at the stage of considering a purchase - they clicked (signed up for a webinar, went to the store's landing page, downloaded an e-book, etc.). At the very bottom there is a group of people, as narrow as the neck of the funnel, who entered the shopping cart, bought a product, paid for a service or performed another action you expected.
Effective Conversion Funnel?
We know how to build it. Also for your company.
How to build a conversion funnel model?
The sales funnel was created with e-commerce in mind. It includes building awareness of the existence of a given brand. Plan which ones communication channels you will use, given cost and effectiveness. For example the effectiveness of email marketing it is an effect of scale, because e-mails can be sent to millions of people (and you pay nothing for each subsequent one). Meanwhile advertising in social-media is often paid per view. In the PPV model, where you pay for each impression, you need a higher conversion.
Online conversion funnel relies largely on automated solutions. Only then is it profitable to send several thousand e-mails. Before you start, make sure that you have automated tools or mailing sequences that will allow you to react quickly if, for example, many people want to buy your product at the same time or even sign up for a webinar or mailing list.
End-to-end funnel strategy – when to use a conversion funnel?
Today, conversion funnels are mainly talked about in the context of e-mail marketing. However, they also existed and were used earlier in telephone or direct sales. But let's focus on internet sales, because it allows us to reach thousands or millions of potential buyers at low costs and in an easy way. A sales funnel is most often used to build a mailing list, organize a webinar and generally sell. It allows you to identify people who are at the stage of considering a purchase. The sales funnel also takes into account both other elements, i.e. webinar, newsletter and landing page.
Conversion funnel - how to measure?
On the web you will find a list of average conversions for each of the industries. For example in e-commerce it is 1.84 percent., now in the financial industry - approx. 5 percent. Marketing guru Amy Porterfield's advice is to build a conversion funnel based on your industry average, and only then set your own, more ambitious goals after that. How to measure the conversion?
The email marketing conversion funnel consists of: E-mail "openability", number of clicks, alone conversion, and number of canceled subscriptions. Check the averages for your industry and set goals for each of these areas.
Itself measuring conversions in ANDon the internet it's fairly simple where you have access to stats. If you sell only through the website, you just need to compare the number of visitors with the number of purchases made - this is your conversion. If you run an e-mail marketing campaign, set the number of messages sent with the number of clicks on the link or replies to the e-mail.
Dedicated tools make it easy to measure results. A link or code available only to e-mail recipients means that you will have no doubts where the buyers are coming from. The conversion funnel is likewise easy to evaluate in cold calling or direct sales (number of finalized transactions / number of calls = conversion level). It won't be that simple anymore with a billboard or scattered forms of marketing whose reach is difficult to define.
The secret of an effective conversion funnel – is it 1 percent? Is conversion a lot or a little?
The conversion funnel is an effective tool and is therefore standardized sales support online. The key here is to match the stages of the funnel. People who come across this concept for the first time are sometimes disappointed with the conversion level, which is often several percent. If for every 100 people at the top of the funnel, on average only 2-3 enter the shopping cart and make a purchase, can it be considered a success? This is the wrong question.
Conversion funnel effective in 1-2 percent. sometimes that's enough to be successful. For example: if you send 1,000 automated emails a day and the conversion is 1-2%, that means about 10-20 new customers a day. 3.75% average conversion that's a lot if millions see your Google ad every day. Whether a conversion of a few percent is a lot or a little depends also on the industry.
If, for example, you sell exclusive real estate, it pays off to invest in mailing to 1,000 people, if as a result one of them will spend millions on an apartment. However, if you sell pens, such mailing would cost you more than the expected revenues when converting 1%.
Remember that you can influence the conversion funnel, improving its individual elements. A comprehensive funnel strategy helps with this. Well-written, attractive content will mean that your e-mails will be opened by a dozen, not a few, percent of recipients, and of them, a dozen, not a few percent, people will click on the link or offer. All this means that in the end you can achieve conversions much higher than the industry average. Moreover, automating the process reduces the costs of sending an individual e-mail - it does not matter whether you send 100 or 1,000 e-mails with an offer.
We all know companies whose marketing and offer are so good that we do not need to be persuaded to subscribe to the mailing list - we apply ourselves and then wait for e-mails with offers. Efficient marketing strategy it will make customers wait for emails from your company, which significantly increases conversion.