19th of May 2020 7 minutes read
Some time ago, when the internet was still in development and the first attempts at e-commerce were being made, website owners and digital marketers did not have all the functionality of the analytics tools that we have today. Tracking precisely what had led to the sale of a product was very difficult.
I remember working with website owners who were confused about why they had many visits to their websites, but very few sales of their products. Most of the time, it was because their websites were convoluted and were confusing customers. Visitors got lost somewhere between the product page and the actual checkout. But where? And how could we better analyze this?
Nowadays, the problem is solved. Most experts use a tool called funnel (or conversion funnel, or marketing funnel) to get an overview of that exact process. It is called a funnel because it looks and acts exactly like a funnel that you would use to pour liquids into a bottle with a tight neck. Instead of liquids, in website analytics you work with visitors that land on your page. In this parallel, the inside of the bottle is the last step of the conversion process, whether that is the checkout page, or a sign up page or similar.
In both cases, some of that liquid may inevitably be “spilled” and will not make it to the inside of the bottle. In translation, that means that not all of the visitors make it from the top of the funnel to the point of conversion, at the bottom.
What is a marketing funnel?
The marketing funnel is a tool used in analytics, to determine what percentage of the users landing on a webpage navigate towards other pages that represent steps to reaching a conversion goal. In short, it is a more advanced tool for tracking conversion rates and identifying problems in the customer journey.
It uses a simple graphical representation in the form of a funnel, where the top level represents the number of users visiting the landing page, while the next steps display the number of visitors that took an action to get to the next logical steps of the funnel. The bottom of the funnel represents the number/percentage of visitors that made it to the conversion page.
Simple conversion funnel example
In order to be able to work with this tool, you need to carefully set up a goal, and design the stages of the funnel, up until goal completion. A simple conversion funnel example would be the next one, consisting of 5 steps.
- Visitors landing on homepage
- Visitors going to website shop
- Visitors reaching a product or service page
- Visitors adding product to cart
- Visitors going to checkout
It is recommended to limit the steps of the funnel to the minimum necessary. If a customer needs to navigate to 10+ different spots before making an acquisition, it is more likely that he/she will drop out along the way.
The basic marketing funnel: awareness, interest, desire, action
If we were to correlate the above funnel with assumptions about the user attitudes and intentions, a classical model would look like this:
- The first level represents awareness. Potential customers reached your website, so it is safe to assume they are aware of your existence.
- The second and third steps represent interest. Visitors have not left your website, but want to see your list of products.
- The fourth step represents desire. The product has been added to cart.
- The fifth step represents action. The user has paid for the product.
Having the funnel in place is useless without an analysis of the data. Here are some of the things you can discover.
See where you are losing customers
Ideally, the funnel should not be very “steep”. If you see big differences from one step to the other, it means potential customers are dropping out before buying something. Identify the place where the difference between steps is the biggest.
It means you may have a problem on the funnel step prior to drop-off. It might have something to do with the design of the page or the information on it. See the next point on this list.
Find the reasons why some steps lead to high drop-offs
The funnel itself can’t help you understand why visitors abandoned the conversion process. Fortunately, there are funnel tools that correlate with visitor session replays. This means that, at every step, you can see the actual recordings of the user interactions with the page.
This way, you can try to find a behavior pattern to explain the drop offs. Are some of the users not scrolling enough to reach the CTA button? Are they not even hovering the mouse in the area that leads to the next step? Are they click-raging? Is there an error on the way the page is displayed or is functioning?
Find the error, fix it and reset the funnel visitor data to see if results improve.
See which pages perform better in terms of conversions
You may be running several marketing funnels at the same time, with small variations to the steps you use. Compare the data and see which pages lead to a higher conversion rate. Learn from that and try to replicate those pages in the future.
Offer your team or your clients clear conversion measurability
Successful business is based on data, not on guesswork. A marketing funnel provides percentages at every step of the way. You can even set yourself a conversion goal during planning. Some funnel tools, like the one from Visitor Analytics will use that as a standard and provide data to show you whether your performance is good or not. Are you reaching your goals? By how much have you missed the mark? After some adjustments, how have the percentages changed?
Visitor funnel optimization
Take all of the data in and use it to improve. If you notice after some visits to the landing page that the funnel is not showing acceptable conversion rates, make changes to the steps or even to the entire funnel logic. After funnel analysis, you may want to remove a step, change some page layouts, rearrange the order. You will need to set up a new, optimized marketing funnel. Hopefully, the results should show.
Other conversion funnel examples
Let us see another couple of examples of marketing funnels and how they help us improve conversion processes.
In this funnel, you see a big drop-off between the homepage and the shop, right at the first hurdle. Then there is also a significant drop at the last step. It is safe to say that the shop is not visible enough on the homepage.
There were two interventions on the homepage for this. First, the color and layout of the shop button in the menu was changed to make it more prominent. Second, a banner with a CTA encouraging users to go to the shop for the latest deals and sales was added.
Then, recordings of the drop-offs after “add to cart” were consulted. It turns out that in some browsers there was an error and the cart page didn’t display correctly, with some elements overlapping. The error was fixed.
No interventions were done on the logic of the funnel. Visits were reset. After the next 1000 visits to the homepage, the percentages increased drastically.
In this funnel, there are a total of 8 steps. There are not that many drop-offs at a single stage, but by the time we reach the bottom of the funnel, the conversion rate is very low. This suggests that there may be too many steps, some of them unnecessary.
If we take a closer look, we can see that we are focusing on some specific product here, to which you can apply a discount. Instead of dragging customers through the entire shop and to an entire category page, why not promote the specific products on the homepage, with direct links to the product pages? This way, we eliminate steps 2 & 3.
Also, do we need to send the user back and forth to a voucher page? If we place the voucher anywhere else in the process, we can then also eliminate steps 6 & 7.
We move from 8 steps to 4, which will drastically increase the chance of getting a good conversion rate.