All You Need to Know About Optimizing Ecommerce Sales Funnels For Profit

Guest Author 19 February 2019

In ecommerce, and especially in marketing for ecommerce, everyone talks about “The Funnel”. It’s this magic word that marketing experts refer to and nod sagely at when it’s dropped. But even ecommerce veterans often don’t actually fully understand how a sales funnel works, not to mention the newbies who have no concept of what it is.

First, let’s start with what it is.

A filter and an automated salesman

If set up right, your sales funnel filters your ideal customers out of the millions of people surfing the internet at every second of every day. It filters out the people that are going to luuurve (or are in desperate need of) your product.

And then it presents and shows off your products – and your shop – to these people to the point where they can’t resist clicking that “buy” button. Ideally, it does this more than once. And that’s when your ecommerce brand grows.

A sales funnel

makes potential customers aware of your shop and products,
piques their interest,
helps them make a decision and
take action.

1. From stranger to visitors – Make them aware of you

Over 55% of the world has access to the internet. That’s over four billion people. And your job as online-shop owner is to find the fraction of those four billion people that are potentially interested in your product. Somehow, you have to find those people and pique their interest enough to visit your website.

You have to turn strangers into visitors of your shop.

1.1 Entice them to visit

There are many ways to do this. Here are the popular ones that have proven themselves time and again:

Run Facebook or Instagram Ad Campaigns targeted towards your buyer persona(s) or, later, lookalike audiences based on your subscribers, customers or evangelists
Run Google Display Ads or Product Listing Ads with Google Ads (formerly Google Adwords)
Be active in forums and Facebook groups where your ideal customers hang out
SEO-optimized blog or video content that solves a problem or answers a question of your ideal customer

These measures generate traffic to your shop. With a single click, those strangers become visitors on your website. Now you just have to keep them there long enough to get them truly interested.

The best way to do this is for that one click to lead them not to your general homepage, but to a landing page. A landing page has a single specific goal; everything that doesn’t lead the reader to the bottom of the page and to the call-to-action to fulfill that goal is stripped away. No sidebars, no other links, no menu at the top.

Here, you offer them a freebie. Who doesn’t love freebies, right?

1.2 Offer them freebies

Such freebies could be

a discount on their first purchase or free shipping,
a how-to guide that helps them solve a problem or challenge they’re currently facing, or
a video that teaches them something
a raffle at which they can win something

In an ideal world, your website visitors will go for one of these freebies right away. In reality, though, it’s very possible that all they do on their very first visit is browse your website, read this page or that.

But if it’s interesting to them, they may opt-in for your freebie on that first session. All they have to do in exchange is give you their email address. And, presto, you have their virtual phone number.

If they don’t opt-in on that first session, you’ll have to “retarget” them – don’t worry, we’ll into the details of retargeting a bit further down in this article.

You’ve now filtered out a complete stranger off the internet as someone who is interested in what you’re offering. He has essentially qualified himself as interested in your product; as a candidate for a first date. In ecommerce-speak, these people are called “subscribers” or “leads”.

2. Visitors to interested parties – Pique their interest

It’s highly unlikely that you’ll hook a stranger, whose curiosity you piqued enough to take a look at your store, into buying one of your products right then and there. There are a lot of boundaries that a first-time visit simply won’t overcome, the biggest of which is trust.

When he lands on your store for the very first time, this stranger from faraway internet lands has no idea who you are, what you stand for, whether your product is good and holds its promises, or whether you’re just out for a quick buck and ready to rip him off. It’s a bit like dating; you wouldn’t hand over your credit card to someone you just met, right?

No – you want to get to know and trust that person first. If that person demanded you hand over your credit card right now, you’d run for the hills.

Which is how any stranger feels when he visits your shop for the first time.

But you did draw them to your landing page and convinced them to leave their email address, which means something about you and your shop piqued their curiosity. Something they saw in your ads or content drew them there. Whatever you offered on that landing page made them decide to give you a second glance.

Now you just have to nurture their interest. You have to turn a lead / subscriber into a qualified lead.

You do this by putting yourself and your products in front of them regularly. Remind them that you’re there, that they liked what you offered enough to leave their email address.

How do I do this, you ask? There are two ways we recommend.

2.1 Retargeting or remarketing

Whether you call it retargeting or remarketing doesn’t matter. It’s the same thing. What it means is that you get your first-time shop visitors to return to your shop.

It’s simple, from a technical point of view. When they land on your shop that first time, they’re marked by cookies integrated in your website. You can now send the people with these cookies specifically targeted ads.

This is possible on a myriad of platforms, including first and foremost Facebook, Google and Instagram. People who’ve visited your website will now be showed your ads whenever they log into those platforms.

You’re not trying to sell your products just yet. You’re still trying to build trust, so for now focus on communicating your brand and positioning. For example, show them one of your products in action, or share a satisfied customer’s review, and add a “Buy Now” call-to-action button.

2.2 Email-Marketing

You didn’t ask for your visitor’s email address for shirts and giggles. Most people immediately think “newsletter”, but proper email marketing can be so much more refined and personalized. Weekly newsletters to your entire email list is a lot of effort for very little return. They’re just too generic.

Better to use that effort to set up dynamic emails that send the right content to the right person at the right time. This type of email marketing is also known as a drip campaign.

Instead of sending one email to everyone on your list, you send specific emails when someone in that list fulfills a specific condition – for example, signs up for your list.

Email welcome series

Have a welcome series ready for newbie subscribers, to turn them into paying customers:

Day 1: Welcome! Thank the subscriber for signing up and their interest, introduce yourself, let them know what to expect and what they will learn in the following emails and ask whether they have questions.
Day 2: Teach. Show them what you promised in the first email and include a link to a suitable product at the bottom of the email.
Day 3: Brand history. Tell them a story about your store and/or brand and add another product in a postscript.
Day 4: Niche tipps, tricks and hacks. Send them an applicable and practical how-to guide right out of your niche, for example “Five things the pros do”.
Day 5: Case study. Tell them about an existing customer’s success story with your product. Include a quote or testimonial of that client, with a photo of them, and a clear call-to-action to buy the product at the very bottom.

Want to create the best email drip campaigns for Ecommerce stores? Get started with Follow-Up Emails by CM Commerce.

To recap, you can use retargeting via Facebook, Google and Instagram, as well as a welcoming email marketing series to put your shop and products in front of your first-time visitors repeatedly, while building trust in and recognition for your products.

It’s okay if they haven’t actually bought anything at this point.

3. Qualified lead to paying customer – Help them take action

In the next step, you want to convince them to actually buy the product. Turn that qualified lead into a paying customer. The goal is for them to click “Add to Basket”.

They will only do this if they trust you and you’ve managed to remove all doubts about you and your shop. They’ve gotten to know the product, but now you have to convince them of your shop and its authenticity.

3.1 Effective trust-building measures

Possible measures you can include are the following:

Interact with your visitors as much as possible. The more points of contact you have with them, the more trust you build. These points of contact could be ads on platforms, in emails or on videos.
Personality. Let your personality shine, where appropriate. Share your story. You can do this on your About page, in your welcoming email series, or on social media. Be open, show your humanity.
Offer proactive customer support. Don’t wait until a problem arises. If a customer buys something from you, send him an email the next day, asking if everything was to his satisfaction and is there anything else you can do for them?
Reduce risks wherever possible. Offer a 30-day satisfaction guarantee, free return delivery, or price guarantees, and communicate these open and honestly.
Highlight your product’s benefits in the description, not just its features.
Highlight your product’s unique benefits; this gives you the competitive edge.
Optimize your “About” page. Show them who your are and what you’ve got to offer. So many shops don’t utilize the About page to its full capacity that a fully developed one gives your shop a personal and personable vibe, which gives you a competitive edge.
Offer time-sensitive discounts. Make it a no-brainer for them to buy from you right now by including time-sensitive discounts. “10% off for the next 24 hours” adds an urgency to buy the product they’ve been eyeing for a while now that will be difficult to resist – if they trust in the product, your shop, and especially, in you.

Remove all trust barriers by implementing these measures and you’ll make it easy for them to add your product to their basket.

4. Customers to regulars – Entice them to come back

Animating your first-time customers to buy from you again is easier and costs six to seven times less than acquiring entirely new customers. So never forget to appreciate your existing buyers.

4.1 Order features your customers will love

Of course, for them to even consider buying with you again, you must first give them an excellent user experience. Amazon has set the bar here, and set it quite high, but if you want your customers to come back with a smile, make sure their first order goes off without a hitch and offers the following goals:

Order Processing within 24 hours
Delivery within 2 days
Easy and foolproof return process

Once you’ve convinced them of your shop’s merit, there’s one underestimated approach you can implement that will have them returning soon and with enthusiasm.

4.2 Optimize the receipt

Receipts are as much a part of buying online as the check at a restaurant dinner. What many people don’t know: A study we conducted on the matter in 2015 confirmed that receipt emails are opened up to four times more than other marketing emails.

Use this to your advantage by

asking for reviews,
advertising bestsellers or other products,
offering discounts,
building a social media community,
optimizing for mobile devices, or
asking questions that will help you narrow down your ideal client

in your receipt emails.

The chances of your customers seeing your goodies and taking advantage of them are three to four times higher in your receipt emails than any other emails you send out on your marketing campaign – so make use of them.

To supercharge your Ecommerce receipts, get CM Commerce Receipts for free. And to double your receipt conversion rates, try CM Commerce Premium, which includes Product Recommendations. Start your 30-day free trial now to find your perfect fit.

Conversion rates and how to read them

Conversion rates can be a bit difficult to nail down, because you can calculate many different ones. The most basic one in for your online-shop is this:

Number of buyers / number of visitors = conversion rate

But this conversion rate can be broken down into the steps your shop visitors take from

finding your shop and products, over
adding products to the cart and proceeding to checkout, to
buying and becoming customers.

Analyzing these different conversion rates can give you important insight into where in the process your potential customers are exiting the order process.

1. Shopping cart conversion rate

This conversion rate states how many visitors actually add a product to the shopping cart:

Number of visitors with product in shopping cart / number of visitors = shopping cart conversion rate

For example, you have 4.500 visitors on your shop, and 250 of them add a product to their cart. Your conversion rate will be 250/4.500, which equals 5.5%.

4% is an acceptable shopping cart conversion rate. An extremely successful shop may have up to 10%. So if your shop has a shopping cart conversion rate between 4 – 10%, it’s performing well. If it’s not, you may be able to use that using cart abandonment tools to send emails reminding your potential customers about their purchase.

This conversion rate is highly influenced by the quality of traffic to your website. High-quality traffic are visitors who are truly interested in your products and didn’t just land on your shop by accident.

If you’re shopping cart conversion rate is below 4%, have a look at the quality of your traffic and where most of it is coming from. Remember how to turn strangers into visitors? You may have to tweak the ways you’re trying to make people aware of your shop.

2. Checkout conversion rate

This conversion rate states how many visitors with products in the cart actually click “go to checkout”:

Number of visitors who click “go to checkout” / number of visitors with product in shopping cart = checkout conversion rate

So if 130 visitors out of the 250 who added something to their cart click “go to checkout”, your conversion rate will be 130/250, which equals 52%.

Anything over 50% is great!

If your checkout conversion rate is far below 50%, this may be an indicator that your visitors are running into problems with design or usability. Problems make it difficult and therefore unlikely for the customer to proceed through the order process before aborting and finding another vendor.

Figure out what these problems are and eliminate them.

3. Buy conversion rate

The buy conversion rate states how many visitors have made it through the entire order process:

Number of visitors who click “buy” / number of visitors who click “go to checkout” = buy conversion rate

If 70 out of the 130 visitors who clicked “go to checkout” actually click “buy”, your buy conversion rate will be 70/130, which equals 53%.

Anything over 50% is great here, too!

If it’s significantly lower, your potential buyers are running into problems in this part of the process. This could be due to confusing user navigation or unexpected additional cost, for example for shipping, or just general inconsistencies about the product or order number.

To help you find out where the problem may be, always add your contact details to the checkout page, to give customers the opportunity to contact you in case of problems. Besides helping them out, always note what the problem was. This will help optimize your process or create an FAQ that can answer your customer’s questions.

Your best – and cheapest – salesman

There you have it. If you implement these step-by-step levels to first filter out your ideal customers and then sell to them, your sales funnel will be your best and cheapest automated salesperson. Just keep monitoring and optimizing, and it’ll run more and more smoothly.

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What are your thoughts about this? Has continuity paid off for you in the past? Let us know in the comments down below.