Conversion funnels help businesses clarify the best paths to getting a user to complete a sale.

To understand a conversion funnel, it is important to first consider the idea of a conversion rate. A conversion rate is the percentage of visits to a website that end in a purchase. This acquisition is called a conversion because it measures how many site visitors converted their page view into a purchase.

A conversion funnel is the term that describes the steps in a consumer's journey to purchasing an item from an ecommerce website. The shape of a funnel represents the gradual decline in the number of customers who reach each step. Not all site visitors continue through to making a purchase.

The steps

Each company may have its own conversion funnel model, depending on the type of business and its overall goals. Typically, conversion funnels all begin with generating awareness of the product among an audience. This can come in several forms, including an Internet search or a clickable online advertisement. Paying close attention to the click-thru rate, or the number of site visitors who clicked on a specific link, will help determine what methods work best for this first step.

From there, a business needs to build interest and trust in the potential consumer. Generating excellent headlines and content on the ecommerce site helps to establish interest among readers and visitors. Consumers have to believe that they want and need the product being sold, so advertise the solution, not the problem itself. This is also a good point in time to ask for customer email addresses for future events or sales. Keep in mind that with every step of the process, there are customers who exit the journey and don't make a purchase. Monitor these moments so changes can be made to better retain customers throughout the process.

The next step is action. Simply put, the customer responds to the product and site in a positive way and places an item in his or her digital shopping cart. The trick at this stage is avoiding shopping cart abandonment at all costs. Shopping cart abandonment is increasing. Last year, online shoppers left $4 trillion worth of merchandise at checkouts (1). To avoid this hiccup, the checkout process must be streamlined and simple.

Finally, when a consumer makes a purchase, the conversion funnel is complete. Maintain quality relationships with these customers, as they are likely to turn into repeat buyers.

A few tips

Breaking down each portion of the conversion funnel will make increasing conversion rates easier. For example, if the largest number of visitors are leaving the conversion funnel at the same step, check the practices there and see what can be improved.

Just because consumers abandon their carts or exit the conversion funnel before making a purchase doesn't mean they are gone for good. Find ways to enter them into another conversion funnel. Alert them to sales or discounts that may interest them. If they have not already, encourage them to sign up for a monthly newsletter. Multiple conversion funnels can exist for a single online store.

After customers leave a website, follow up within several hours with an email. These messages, if sent within three hours of the potential buyer leaving the ecommerce site, have a 40 percent open rate. This is one way to re-establish connections with patrons who don't quite trust the business or product yet but may soon re-enter the conversion funnel and become a regular customer.


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