If you are running an e-commerce store for a while, you know that it takes a lot of time and effort and a hell lot of money to drive traffic to the website. You invest in SEO activities to build your reputation in search engines while running some well thought paid campaigns to drive traffic to your store. Although you’re successful in getting new visitors, the sales figures are not how you thought would turn out to be. Very few visitors make a purchase. You try some new avenues to increase traffic to no avail. It gets frustrating.
You see, the problem is not of driving more traffic, you already know how to do it, the problem is people are dropping-off from your website without buying anything.
The solution is to make specific changes on your website so that the existing visitors buy from you. In more sophisticated terms, it is known as conversion rate optimization (CRO).
In CRO, you analyze the sales funnel by identifying the page drop-offs and its reasons with the help of CRO tools and implement surefire strategies that would reduce the drop-off.
In this article, we will look at what an e-commerce conversion funnel is, how it correlates to the buyer’s journey and how you can optimize the funnel to boost sales.
What Is a Conversion Funnel?
A conversion funnel is a path your prospect follows from the moment they identify a need that your business can solve to becoming your customer.
The analogy of funnel fits perfectly for the conversion path because similar to a funnel, there’re lots of visitors that come to your website through various sources, but as the funnel gets narrower towards the end, very few visitors end up becoming your customers.
The term conversion funnel need not be restricted exclusively for visitors becoming your customers. It could be any set of steps that requires your visitors to complete an action that potentially takes them closer towards becoming your customer. For instance, a new visitor could sign-up to receive a newsletter, and that itself could be treated as a conversion.
So, What Is an E-Commerce Conversion Funnel?
Every e-commerce business is in the pursuit of finding answers to the following perennial question:
“How do I/we generate more sales?”
The question is pretty straightforward, and we wish the answer were simple as well. The customer behavior is a complex phenomenon, full of twists and turns, and you (an e-commerce store owner/marketer) need to identify specific instances (stages) where you can give a little push to your prospects that will drive them closer to becoming your customers.
So, an e-commerce conversion funnel is comprised of such instances i.e., It’s a visualization of the stages that span the steps from the moment a user lands on your website to the time they complete the desired action.
The completion of the desired action is called a conversion, and hence the name Conversion Funnel.
Note: Depending on the context, the terms e-commerce conversion funnel can also be interchanged with terms such as e-commerce marketing funnel or e-commerce sales funnel.
What Are Goals?
You need to set goals to measure success. For e-commerce websites, a goal is a specific, pre-defined activity a user performs during the buyer’s journey on your website. The goals you set should be aligned with your business and marketing objectives. So, for example, if you want to increase your revenue, a goal would be people completing the checkout process.
If you’re using an analytics tool such as Google Analytics or HumCommerce, you can set destination pages as goals to signify goal completion.
You need to define a sequence of URLs/webpages to ensure that your users are following a specific path before completing a goal. This sequence of URLs forms a conversion funnel which takes users towards goal completion.
If we consider the checkout page as the goal, then a funnel could be a sequence of the following steps:
- A user lands on the homepage
- The user performs a search to identify the desired product
- After visiting the product page, they add the product in the cart
- Upon reviewing the cart, the user proceeds to the checkout page where they provide their personal and payment details to complete the purchase
- As the user is redirected to the Thank you page, The purchase gets recorded as a goal completion in your analytics tool
The Importance of Setting Up Goals and Funnels
The utility of goals is straightforward as they give you a concrete number of goal completions. As the goal funnels provide you a visual representation of the steps towards the goal, you can quickly identify the disconnect between the starting and ending page of the funnel, i.e., you can view what pages are causing visitors to leave your website.
When you combine goal funnel reports with heatmaps and session recordings, you can figure out the elements on different webpages that cause users to drop-off. Perhaps it could be a jarring product copy that users find difficult to relate with, or certain form fields that users hesitate to fill-in, or the checkout process is too lengthy that wears out the patience of users.
By identifying and fixing these hindrances, you can optimize your conversion funnel.
Examples of Goals and Funnels in E-Commerce
Earlier, we saw an example of the checkout process as a goal. Here are a few other examples of goals and their corresponding funnels:
1. Email Newsletter Subscription Form: Here is how a user might sign up for your email newsletter which is placed on the Thank You page:
- Land on your website
- Add the desired products in the shopping cart
- Complete the checkout process
- Fill out the form on the Thank You page to subscribe
2. Cart Abandonment: You can target users who are about to leave your website without making any purchase in the following way:
- The shopper lands on your website
- After browsing through your product pages, they shortlist a few products and add them in the cart
- Without going to the checkout page, the shopper leaves your website
- You initiate a cart abandonment email sequence that tries to bring them back to complete the purchase
The 4 Stages of an E-Commerce Conversion Funnel
An e-commerce conversion funnel generally comprises of the following four stages, viz. attention, engagement, conversion, and retention. Let’s look at each of them in detail below:
In this stage, prospects come across your e-commerce store. It could be through social media, organic search, paid ads, or any other online or offline marketing avenue.
Since they are just introduced to your brand, it is unlikely that they’ll become your customer right away. Most probably, they are exploring your web presence to understand your offerings, reliability, and trustworthiness.
Window shopping could be an appropriate term to explain this stage. They are just browsing through your store without intending to buy.
Once the prospects understand that you are a trustworthy e-commerce store, they will start to interact with you through various media. They might sign-up for your newsletter, participate in social media discussions, frequently visit your website to see if there’s anything new.
They want to make a purchase, but they’re still not ready to buy just yet.
In this stage, the shopper will get more proactive towards making a purchase. They’ll carefully go through the product page, read the product description, ask a query in the Q&A section, etc.
After careful evaluation, the prospect completes the purchase. This is the stage where e-commerce stores actively promote offers and discounts to overcome any hesitations the buyer may have.
Once a prospect becomes your customer, steps one to three are repeated again when making the next purchase. Your goal is to bypass the first stage by engaging with them on an ongoing basis.
E-commerce stores can introduce subscription or loyalty plans to ensure that your customers keep buying from you.
3-Steps to Setting up an E-Commerce Conversion Funnel
Now that you’ve understood the concept and stages of an e-commerce conversion funnel, you can set up your own conversion funnel by following the 3-step framework detailed below:
Note: In this section, to form the context for the upcoming examples, we will assume that the e-commerce store sells computer peripherals and accessories.
Step 1: Understand the Buyer’s Journey
The buyer’s journey is a series of activities a prospect performs to become a customer. The buyer’s journey is different for different products. For instance, a buyer will spend more time in researching, reading product reviews before buying a high-value product such as a laptop, whereas they might not think much when buying an inexpensive product such as a USB flash drive.
AIDA is a model that explains the stages of a buyer’s journey, and it comprises of four steps, viz. Awareness, Interest, Desire, and Action. Let’s look at each of the stages in details:
1. Awareness: In this stage, the buyer has an inkling of a problem, but they are not sure what it is and hence can’t put a finger on it.
For example, a shopper has developed chronic neck pain due to continuously working on the laptop. Since they are not aware of laptop stands, they will use queries like how to reduce neck pain, neck pain while working on laptop, and so on. During their research, they land on a forum that redirects them to your site. While navigating through your website, they come across a range of laptop stands.
This is how they become aware of a solution to their problem while finding your website in the process.
2. Interest: Here, the buyer has identified a solution that can help them resolve their challenge or pain point.
Continuing with our example, now that the buyer knows they can reduce neck pain by using a laptop stand that puts the laptop on an elevated level, reducing undue pressure on the neck, they’ll start evaluating various options available within the product category.
They’ll compare the available stands against price, quality, reviews, and other factors. They might also look for the same product on other e-commerce websites and in local stores as well.
3. Desire: In the decision stage, the shortlisted product moves from the “good to have” to “must have” stage. The customer has zeroed down on a solution and is just a step away from finalizing the purchase.
After careful evaluation, the buyer has finalized a product after figuring out that your store is offering the best deal.
4. Action: The buyer takes out their wallet and completes the purchase.
Compelling product copy, high-res images, and user ratings and reviews have persuaded the user to click on Add to Cart. The shopper provides their personal and payment details in the checkout process and completes the purchase, thus completing the buyer’s journey.
Step 2: Map the Buyer’s Journey to the E-Commerce Funnel
Although the explanations for the e-commerce funnel and the buyer’s journey are strikingly similar, the difference lies in their approach. The e-commerce funnel is a business-centric concept, whereas the buyer’s journey is a customer-centric phenomenon.
Knowing the stages of an e-commerce funnel and buyer’s journey can help you understand how these two models correlate.
Let’s see a simple explanation:
- The shopper identifies a pain point, but they’re not sure exactly what they need. So, during their research, they’ll land on your website looking for a potential solution, hence completing the awareness stage of the buyer’s journey. From the conversion funnel perspective, they’ve entered the attention stage
- In the interest stage, the shopper has identified a solution and evaluating available alternatives. The shopper chooses to interact with the e-commerce store and therefore enters the engagement stage of the funnel
- The desire and action stages of the buyer’s journey are coinciding to some extent where the buyer purchases the most suitable product among the available alternatives and completes the conversion stage of the funnel
- In the retention stage, the shopper may perform the same set of steps in the buyer’s journey, depending on the product. So, they may go through the entire AIDA model, or if they know exactly what they want, they will omit the awareness stage and get through the remaining steps
To sum up, mapping of the buyer’s journey to the funnel is about molding the buyer’s journey in the conversion funnel.
Step 3: Set Up the E-Commerce Funnel
In this step, we put our homework into practice. Let’s look at how you can set up an e-commerce funnel in Google Analytics and HumCommerce.
Let’s begin with Google Analytics.
Log in to your Google Analytics account and in the left pane click on Admin > All Web Site Data > Goals.
Click on +New Goal to start.
Choose Custom in the Goal set-up section and click on Continue.
In the Goal description section, enter the name of your funnel (Make it descriptive so that it makes sense to you) and choose Destination as the Type.
When you reach the Goal details section, enter the URL that signifies a conversion in the Destination text field. To create a funnel, toggle the Funnel switch to on, and enter the steps a user must complete to count it as a conversion. Here is an example:
Once you enter all the values, click on Save to create the goal funnel.
Congratulations! You have just created your first goal funnel!
Similarly, we can set up a conversion funnel in HumCommerce as well. Let’s look at the steps required:
After logging in to your HumCommerce account, click on the settings button in the top-right corner.
On the settings page, in the left pane, go to Websites > Goals. Click on Add a New Goal to start the process.
Enter the Goal Name and Description, and choose the trigger event to record the goal.
In the where the URL section, enter the URL of the post-conversion page (For example, the Thank You page) and set the conversion recording criteria in the Allow multiple conversions per visit section.
As you enter the Configure Funnel Steps section, enter the path (Series of URLs) necessary to record a conversion.
You might have noticed a difference between Google Analytics and HumCommerce here. Unlike Google Analytics, in HumCommerce you need to enter the final page in the Configure Funnel Steps section as well. So make a mental note of it every time you are doing it.
After configuring the funnel steps, validate them to ensure that there’s no error in any step of the funnel. When you enter a URL that matches with any of the steps in the funnel will be highlighted in light green as following:
Once everything is set, verify every section and before clicking on the Add Goal button, make sure that the Activate Funnel is checked. And you’re done!
How to Measure the Performance of Your Conversion Funnel
Every decision you take in your business should be guided by data. Here are the top 5 metrics that will help you evaluate the performance of your e-commerce conversion funnel.
1. Traffic Sources
This metric shows the sources that are driving traffic to your website. This can help you understand how effective your SEO, SEM, email, social media marketing, etc. efforts are paying off. You can optimize the attention stage of the conversion funnel by banking on the traffic source that is bringing in the maximum traffic.
2. Bounce Rate
Every e-commerce store is in the constant pursuit of reducing the bounce rate. The bounce rate tells how many of your visitors left your website after visiting only one page.
A high bounce rate is a concern for e-commerce sites as the conversion rate drastically goes down as the bounce rate goes up.
If your store is facing a high bounce rate, you need to identify opportunities that would boost on-page engagement. Persuasive copy, bright CTAs, exit intent pop-ups, etc. can help you reduce the bounce rate.
3. Conversion Rate
Measuring the conversion rate of different funnels helps you evaluate their performance. If you notice a significant drop in the conversion rate, you can delve deep into it, identify the steps causing drop-offs, and optimize them.
You can make it even more comprehensive by segregating the conversion rate based on location, traffic sources, devices, and so on.
4. Cart Abandonment
Shoppers will put items in the cart and leave your website without going through the checkout step. Although this is a common occurrence, if you see this number growing, you need to identify the causes behind it.
Start by finding out the step where people usually quit your website. When you combine this with heatmaps and session recordings, you can uncover the problem. You can run experiments with the help of A/B tests to find the optimal solution.
The most important metric to evaluate the performance of your sales funnel is the revenue generated. If you are successful in driving traffic to your website and engaging your visitors but failing at converting them, then you need to find the leaky steps of your funnel.
Along with the revenue metric, you also need to measure metrics such as customer lifetime value, average order value, and repeat purchase rate.
You can measure these metrics in HumCommerce and Google Analytics both.
How to Improve E-Commerce Funnel Performance?
So far, we’ve seen the concept of an e-commerce conversion funnel, how can you build one, and the metrics you need to monitor to measure its performance. Now, let’s dabble a little bit into conversion rate optimization (CRO).
In this section, we will look at some common tactics and tools that would help you improve the performance of your funnel and increase the conversion rate.
Optimizing the Product Page
Your product page gives the in-store sales representative feel to your shoppers. If your product pages are not optimized for conversion, all of your marketing, SEO and paid ad efforts fall flat. Here are four reasons why your visitors bail out on you.
Why Do People Drop-Off from Your Product Page?
You Do Not Show Necessary Product Details: The product photo gallery, videos, and description give more clarity about the product to the shopper. Poorly written product copy, pixelated or blurry images are a huge turn-off.
Solution: Since online listed products are not tangible, you need to convey as much information as you can through description, products, and images/thumbnails. List out all the necessary product dimensions and any details that increase the credibility of the product.
In the above screenshots, you can see that the main image is the front cover of the book. Apart from the name, author and pricing of the book, the site also offer a sample chapter. The description lists out the accolades the book has received. You can also see the coupon code giving the shopper an incentive to make the quick purchase.
Your CTA is not enticing: The color, placement, and content of the call to action matter a lot. It’s what makes the user buy from you. A humdrum CTA with dull colors and a non-actionable copy will not excite the user to buy from you.
Solution: Remember the ABC rule of sales. Always be closing. That’s what your CTA should do. Tempt people to make the purchase. The CTA should always appear above the fold. It should look bright and clearly instruct the user the necessary action step.
In the screenshot above, you can see the text Add to Cart on a bright red button. The CTA stands out on the webpage, and the user can easily click on it to buy the t-shirt. Also, notice the share buttons below the main CTA that serve as secondary CTA buttons, allowing shoppers to share the link in their network.
No social proof: Shoppers get to know more about the product and your service through reviews on the product page. Not having sufficient reviews sets off alarm bells in the shopper’s mind as the product or website not being genuine.
Solution: Encourage your buyers to leave reviews when they buy from you. Don’t get concerned if you get some bad reviews. It will only help build trust as shoppers will see such reviews fair and appreciate your transparency.
Poor website UX: Terrible website load speed, non-responsive website, video autoplay feature, poor navigation, cluttered content, all these contribute to driving visitors away from the website. Along with visitor drop-off, your website may get penalized by search engines as well driving it down in search rankings.
Solution: Compress the images before uploading them to the website. Use a tool like TinyPNG to reduce the file size without compromising the image quality. Enable browser caching to increase site load speed. Make sure your website is responsive so that it is accessible across all types of devices. You can develop mobile apps alternatively to enhance UX for mobile devices.
Promote Upselling and Cross-Selling Opportunities
Upselling and cross-selling are two of the most crucial customer retention activities.
- Upselling is the process of selling a higher-end product than the current one. For example, if the customer is using a consumer laptop, then you can recommend them to upgrade to a business or gaming laptop
- In cross-selling, you recommend products that are complementary to the existing purchases. So, for a laptop owner, you can recommend external hard drive, wireless keyboard and mouse, USB flash drive, etc.
If you have ever shopped on Amazon, you might have noticed sections like Frequently Bought Together, People Who Bought This Also Bought, etc. Each of these sections is an attempt to either upsell or cross-sell products.
E-commerce store owners can implement recommendation engines that are powered by machine learning that provide personalized recommendations based on product categories, new product range, slow-moving products, and the user’s past purchases, etc.
You can use the following tools to implement recommendation engines:
Another way to improve cross-sells is to use a social proof notification tool such as TrustPulse.
Optimizing the Cart Page
The cart page leads the shopper to the checkout page. It consists of the items you have added in the cart, their images, quantities, pricing, etc. Your cart page design should be simple and clear with no clutter and with as fewer options as you can. The goal is to drive the shopper to the next stage of the funnel. However, there are some major conversion killers that make shoppers drop-off at this stage. Let’s take a look at three such mistakes:
Why Do People Drop-Off from Your Cart Page?
Not showing the product summary: Apart from guiding shoppers to the checkout page, the purpose of the cart page is to review the order. Not displaying the products and their relevant details may lead the shopper to leave your website altogether.
Solution: To avoid this happening, show the product details including product name, clear thumbnails, color, size, and quantity. You should also allow the shopper to edit their order.
In the screenshot above, you can see that you can get a gist of your order. You can increase the quantity of the products or remove them from the cart.
Confusing CTAs: Another reason why visitors might drop-off from your cart page is caused by the confusion between multiple call to actions and other elements.
Solution: Ideally, you should keep only one choice (i.e. proceed to checkout) on the cart page when you want the shopper to make a concrete choice. If you have to keep multiple CTAs, the checkout button should get the most prominent color, and placement and the remaining buttons should get less prominent colors.
In the screenshot above, you can see that the checkout button stands out on the page and the Continue Shopping button gets the second precedence.
Unclear Conversion Funnel: People shop online for convenience. Poor navigation and tedious checkout process leave the shopper frustrated. Around 30% of shoppers abandon carts because the checkout process is complex.
Solution: Your conversion funnel should only ask for the essential information from your buyers to complete the purchase (i.e., name, address, contact number and payment details). Also, keep your shipping and returns policy easy to find.
Optimizing Checkout Page
Your checkout page is arguably the most important page in your conversion funnel as this completion of this page brings a sale. You can optimize your rest of the website, but a few mistakes on this page and you’ll get heaps of cart abandonment. Here are three major checkout page mistakes that you should avoid:
Why Do People Drop-Off from Your Checkout Page?
Not Emphasizing Security During Checkout: With so many online frauds coming to light every day, shoppers are a bit hesitant to fill in their card details as they might feel their financial details are at the risk of getting hacked.
Solution: To assure that their data is safe, explain that you’ve taken the necessary measures to ensure data safety. Include the data trust seals on the webpage. Keep the language plain and simple. Avoid technical mumbo jumbo that would potentially distract the shopper from making the purchase. Here’s how Zappos does it:
Not keeping the proper information input flow: The checkout process should be a series of gentle nudges to make the shopper enter their information to complete the process. The ideal flow should be personal details, shipping details, and payment details. Flip it up a bit, and you may leave the shopper wondering if there’s anything sketchy with the website.
Solution: As mentioned, keep the ideal information collection flow as you’re preparing the shopper to take out their wallet. Display the number of steps remaining as following so that the shopper will stick a bit longer to complete the process.
Not Allowing Guest Checkout: 37% of people leave the website when they have to log in at the checkout. One of the reasons for this is if the user has never bought from you, registering on your website looks like a hassle from their perspective.
Solution: Allow users to purchase without signing up on your website. When they buy from you for the first time, you can reach out to them via email to sign up. Once you’ve established trust, they’ll be more than willing to sign up on your website.
Optimizing Order Confirmation Page
Finally, you’ve successfully converted a visitor into a paying customer. Now what? A well-designed order confirmation page can enhance customer experience making sure your shopper will come back again. Here are three simple tips that can help you achieve that:
Say “Thank you!”: Such a simple phrase, but placed at the right stage will make your buyers feel valued. Expressing gratitude on your order confirmation page will show your appreciation for your shoppers. As a way of saying thanks, you can also offer them a coupon as an incentive to shop from you again.
Ask them to Sign-up: If you have allowed them to checkout without registering as we looked in the previous section, after completing the purchase, this is the time to ask them to sign-up on your website. Since they’ve already done business with you, there’s a high probability that they will sign-up with you.
Display relevant products: When the checkout process is complete, along with the order summary, you can include a list of complementary or relevant products. Showing products based on their purchase history will increase the chances that they may buy these products in the near future.
Boost Email Subscription Signups
Your email subscribers are your biggest asset. When introducing a new campaign or products, a mere email can bring in significant revenue. But you need to lay the foundation by attracting their attention to sign-up for your email list. Here are a few ways that can boost your email sign-ups:
- Use lead generation applications such as OptinMonster or Sumo to implement header or pop-up forms. You can provide a coupon code or discount as an incentive
- You can encourage shoppers to sign-up for your newsletter after they complete a purchase
- Increase the interest of your shoppers by gamifying email sign-up forms. You can introduce Spin to Win coupon wheel that can provide a random incentive from a list of incentives. All they have to do is to enter their email address to be eligible for it. Neil Patel uses a Spin to Win form for his website. You can use guaranteed benefits such as discounts, free shipping, personalized coupon codes, and so on
Revive Abandoned Cart Conversions
Cart abandonment is a visible revenue that hasn’t actualized yet. By implementing a set of concrete tactics, you can bring your shoppers back and encourage them to complete the purchase:
- A shopper might be confused whether or not to buy something after adding a product in the cart. You can implement an exit intent pop-up that will notify the user to complete the purchase
- If a user leaves your site despite the notification, you can initiate a cart abandonment campaign that will send reminder emails to the user
- You can support the cart abandonment campaign by running a remarketing campaign via social media and display ads
Hope this article has helped you grasp the concept of the e-commerce conversion funnel and conversion rate optimization. We understand that it all might get overwhelming in the beginning, so if you are not sure how to go about optimizing your conversion funnel, put yourself in your buyer’s shoes and find answers to questions like what are the steps you can get rid of or how can you simplify the checkout?
Remember, you don’t have to implement all of these suggestions right away. Just pick one, test it, if it works, optimize it.
And while we’re discussing the strategies and tactics to optimize the conversion rate of your e-commerce store, visit HumCommerce to start your free trial today. Right now, we’re also providing 25% off on all recurring payments. So, upgrade soon to avail this offer.