Conversion Optimization

5 Stages of an eCommerce Conversion Funnel (+Examples)

Is your eCommerce funnel ineffective? Here is our Founder-focused guide to building an optimized eCommerce conversion funnel with AMAZING examples!

5 Stages of an eCommerce Conversion Funnel (+Examples)

As an eCommerce store owner, you already have a conversion and marketing funnel in place. 

However, are you optimizing the conversion funnel to get more sales?

The eCommerce marketing funnel has five stages: Awareness, Interest, Desire, Action and Re-engagement.

In this article, we'll uncover optimization strategies for each stage with EXAMPLES:

The 5-stage eCommerce Conversion Funnel Optimization Guide

Stage #1: Awareness (how to TELL shoppers)

"In awareness stage, TELL shoppers about your USPs to help them discover products and like your brand."

- Luke Perry, CRO expert, Convertcart

1. Grow with the Facebook Lookalike strategy

Facebook's Lookalike helps in conversion funnel analysis by targeting new people similar to your ideal customer. 

It might sound similar to the Adwords “Similar Audiences”.

But the major difference is that Facebook's feature is not based on certain defined parameters. 

Instead, it finds shoppers having traits, interests, and disinterests similar to the profiles suggested by you. 

This way, you can reach a wide but relevant audience. 

Here’s how you can set up Lookalike Audiences on Facebook for conversion funnel optimization:

  • You can either do this during the Ads creation process using Ads manager or go to Audiences
  • Create audience > Lookalike audience
  • Choose the source. This can be from your pixel data or can be a custom audience
  • Pick the desired country/region
  • Pick the ideal size. Don’t keep it too wide. Facebook recommends the range of 1000-50,000
  • Click on Create Audience
  • It takes up to 24 hrs to create the audience and about 3-7 days to update the target for any active ads
eCommerce marketing funnel: how to create a Lookalike Audience on Facebook

2. Find unsatisfied customers of your competitors

When a customer is unhappy with a product or a brand, they are usually quite vocal about it through reviews. 

To improve your funnel drop off rate:

- Find customer reviews on Amazon or the competitors' websites

Go through their public profiles and study their activity online.

See what products they buy, why they don’t like a product, what their needs are, etc. 

With this information, update Audiences on Facebook or Google to run more effective ads

- Get active on Quora

Search for ‘reviews’ with competitor brand names. 

Respond to negative reviews with a convincing pitch and draw their attention to your brand—elaborating on why it could help them solve a problem.

The key to success here is to identify their needs, what was missing in the competitor’s product and tailor your pitch to drive more conversions. 

ecommerce funnel optimization: answering customer queries on quora

3. Partner with the right brands

When choosing your ideal brand partner for conversion funnel optimization, consider:  

- Relevance to your brand (can you pitch an offer together?)

- Is it a highly dependable relationship? (it has to be. Otherwise, you risk losing partners in a short period.)

- What do they have to offer and what can you give in return? (assess the greatest strengths of the individual brands, and see what exchange would fit the context.)

Once you have the right partner, keep the following tips in mind when creating a loyalty program:

- Run collaborated surveys to gain maximum insights before drafting the program

- Bundle your products smartly (you can use this opportunity to clear some slow-moving stock while getting new customers to your best-selling products)

- Seek social proof from existing customers (social shares, referrals, and a comprehensive review of certain products)

- Have tier-based rewards systems (for instance, if they promote your product, get a valuable referral, and are frequently participating in your eCommerce sales campaigns, they get a high-value freebie—for just a social share, they could earn a flat 10% off any product)

Check out: 14 eCommerce Loyalty Programs Backed By Science (Examples)

4. Find channels that drive relevant traffic

To attract leads that can become customers in the eCommerce marketing funnel, figure out where the best traffic is coming from. 

In GA4, go over to Acquisition and look closely at two reports—one, the User Acquisition report and two, the Traffic Acquisition report.

ecommerce sales funnel optimization: funnel analytics

Instead of either of them, looking at both of them is valuable because while the User Acquisition eport helps you track the exact path that a visitor took to find your website, the Traffic Acquisition report involves all the channels a visitor used to reach your website.

Next, see the average session duration, pages per session, and bounce rate.

In the last section, see the channels bringing in the most conversions for your store.

Stage #2: Interest (how to make shoppers CARE)

In the interest stage, you need those website visitors to turn into leads, so come up with compelling copies and visuals that set you apart from other stores.

- Mike Hale, UX specialist, Convertcart

1. Promote UGC on social media and website

To improve eCommerce funnel conversion rate, the second stage is about piquing the interest of potential customers:

- Send user-generated content like social posts, promote photo collabs

- Promote positive reviews on Amazon or your website

- Allow customers to add images & videos to their reviews on your product pages

customer journey ecommerce conversion funnel: reviews with images and videos

2. Have video-based product descriptions

Over a third of the audience (esp Gen Z) prefer to learn about the product through a video. 

While it is important to have a creative and compelling written description, having a product video will help convert the younger audience. 

Check out how video-based product descriptions are uploaded on Amazon.

ecommerce funnel stages: videos in product descriptions

More inspiration right here: eCommerce product videos: 30 brand examples to learn from

3. Get an enriching FAQ in place

Having an FAQ section on the website can leverage the interest stage of the eCommerce purchase funnel.

It helps attract new visitors to the online store through improved SEO. 

What to avoid: “How is this product better than what’s out there?”. Include that in the product description

What to address: “What are the materials used to make the product?” or “If the product fails to work, can I get a replacement?”.

Cover topics regarding customer support, privacy policy, and shipping information. 

To create a list of such queries, browse through Quora and look at what potential customers ask about the product and a competitor's brand.

4. Introduce live chat

Over 85% of visitors have had a good experience with a chatbot. 

Consumers feel that they are prompt, help address queries immediately and keep them engaged. 

If you have a store on Shopify, here’s how you can set this up:

  • Customize Theme > Customize Button
  • Footer Option on the Left Side Panel
  • Click Theme Actions > Edit Code
  • From, you would need to copy and paste the code snippet of your preferred chatbot app

5. Run tests & collect data

It's crucial to understand how shoppers behave when you're looking to do conversion funnel optimization.

Heatmaps are a visual representation of where shoppers focus their attention on the site and where they don’t. 

example of a heatmap showing where shoppers focus their attention on

You can also conduct A/B tests. Create two variations (Variation A and Variation B) and test them out against each other. After running the test, see which variation generated more conversion against another. 

For example, you want to test which CTA will generate more conversions between orange and green. The test might look something like this:

example of an A/B test analysis for conversion funnel optimization

Check out: 153 A/B Testing Ideas for eCommerce (Homepage, PDP, Cart, Checkout)

6. Find where shoppers (generally) drop off

Each level of your eCommerce marketing funnel filters out users who aren’t interested and qualifies the others to the next level.

This process creates drop offs—essentially shoppers who aren’t interested to move forward in the journey towards a macro conversion. 

So, how can you identify these leaks for improved conversion funnel analytics?

On GA4, go to Reports > Monetization > Checkout Journey Report

Four GA4 events are crucial for this report:

  • begin_checkout for “Begin checkout”
  • add_shipping_info for “Add shipping”
  • add_payment_info for “Add payment”
  • purchase for “Purchase”

This report also looks at various dimensions including device, country, region and language among others.

Also, look at Reports > Monetization > Purchase Journey Report

In this case, GA4 looks at five events for conversion funnel analysis:

  • session_start at the start of a session
  • view_item when a product is viewed
  • add_to_cart is when an item is added to cart
  • begin_checkout for “Begin checkout"
  • purchase or in_app_purchase for “Purchase”

Stage #3: Desire (how to make shoppers WANT what you offer)

In the desire stage, solve solutions to create conviction. 

- Luke Perry, CRO expert, Convertcart    

You'll love to read: eCommerce Conversion Rate Audit Checklist (+ Ideas For Improving Conversion Rate)

1. Highlight security certificates and payment modes

About 15% of the visitors abandon their cart owing to concerns about security. 

SSL certificates, multiple payment options, and trust badges help get rid of these worries. 

The key here is to place them in the right place on your website. 

On the product page, place them right under the CTA button or the product title to grab their attention. 

If you run your store on Shopify, this is taken care of for you.

Here’s a quick example:

highlight security badges under the CTA on the product page

2. Create compelling exit-intent pop-ups

You can save at least 10-15% of your visitors with a well-crafted exit intent popup. 

However, you need to first understand what a good exit intent popup looks like for conversion funnel optimization.

Here’s an example - rather than saying “hey, how about a flat 50 off?”, you can allow visitors to save the product to come back to it later. 

Check this out:

example of a conversion driving exit intent popup

As you can see, it’s not pushy with its messaging. 

It allows visitors to save their items of interest to later come back and purchase them. 

This way, you get some action from them without completely driving them away. 

Check out: Exit-Intent Pop-Ups: overcoming common mistakes + 20 brilliant examples

3. Make it easy to compare options

Here's how to create a structured comparison chart:

- Create a comprehensive product comparison chart for your products and also include your competitors’

- Add in details that make your brand stand apart (if your price is higher, wow them with the features—they need to know what they’re paying for)

- Add in reviews, ratings, and product specs (you can also add best-seller tags and a “Who generally buys this product?” section)

example of product comparison to reduce funnel drop off rate

By the way, if you can’t name your competitors, just compile the information under “Other products/brands."

4. Identify where micro-conversions happen

When working on conversion funnel optimization, look into micro-conversions that lead to macro conversions. 

Some common micro-conversions can look like:

  • Newsletter sign-up
  • Browsing specific pages such as product pages, category pages, homepage, etc.
  • Adding products to the cart
  • Clicking on an offer pop-up

Micro-conversions can include as many actions as you like, depending on the business type and site.

Segment what content the customers will see at different stages that will prompt them to move ahead.

Stage #4: Action (how to make shoppers click on the CTA)

The action stage is focused on making shoppers click on that shiny CTA button. This is also the stage where most dropouts happen. So start with small tweaks to achieve a significant improvement in your conversion rates.

- Mike Hale, UX specialist, Convertcart

1. Offer guest checkout option on the checkout page

Nearly 40% of visitors who abandon an online store do so because of having to create an account. 

Instead of having them sign up, offer a guest checkout option to make your eCommerce conversion funnel smoother. 

Nordstrom guest checkout example

An alternative to this is to enable Social Login. This allows you to gather all the information you need and connect with them post-purchase without having a long process. 

Etsy guest checkout through social login

You might like: Guest checkout: Still a good choice? (+16 way BETTER alternatives)

2. Reduce the number of form fields 

An experiment found that 5 form fields convert the best—and for conversion funnel optimization at the fourth stage, this is key. 

The details can include the email address, delivery location, and full name.

Following the 5-field rule, split the location into 2 fields and also add in a field for their contact information. 

Here's a study comparing usability performance and number of form fields:

checkout usability study on number of form fields

3. Customers expect full disclosure (pricing and policies)

Provide a clear explanation of the total cost including tax information and packaging fee. 

Apart from this, on the same page, mention the terms and conditions of the refund and return policy. Keep it crisp and straightforward to avoid any misinterpretation. 

amazon offers complete transparency on cost details and policies

4. Measure the right eCommerce funnel metrics

To get your funnel conversion rate right, here are 8 metrics to measure:

i. Conversion rate: Measures what percentage of your total visitors actually convert into paying customers: Number of customers/ Total or average website visitors.

ii. Click Conversion Rate: Similar to the previous metric, this measures the click-through rate to conversion ratio. For instance, if you ran an Ad campaign and it had 1000 clicks and 100 customers, it means that you have a 10% click conversion rate.

Number of conversion clicks / Total clicks.

iii. Cart Abandonment Rate: The rate at which your visitors leave your site without buying anything. In specific, how many visitors add something to the cart and then leave without completing the checkout?

Number of completed checkouts / checkouts initiated x 100%

You might like: Cart Abandonment Rate Statistics(2024)

iv. Add to Cart Rate: Measures what percentage of your visitors add an item to your cart: Number of add-to-carts / total visitors.

Do check out: How to Increase Add to Cart Rate: 30 Brilliant Ideas

v. Customer Lifetime Value: Measures the value of each customer or the amount each customer has spent on your store to date: Average customer lifetime x average monthly spend x % gross margins.

vi. Average Order Value: Measures the average amount of money a customer spends on your store each time: Total revenue / Number of checkouts.

vii. Repurchase Rate: Measures how many customers are coming back to buy more from your store. It could apply to your site or a single product: Number of customers who bought more than once in a particular period / Total customers in that period. 

viii. Returns: Measures what percentage of your orders are returned: Number of return requests / Total number of orders fulfilled.

You might like: 7 unconventional product page Metrics for eCommerce (& insights)

5. Make your site easy to navigate

Each step of the conversion funnel should be designed to provoke action to the next step.

When you’re working with conversion funnel optimization, keep in mind:

There’s an ideal path you want a customer to take, and then there is a path that customer takes, which needs to be mapped and accounted for.

charting out the customer journey map can help in conversion funnel analysis

Create different funnels for different user behaviors to help convert shoppers into customers.

Understand what’s the most important goal of your website. 

It could be sales, lead generation, or getting customers to sign up. (Here's something in-depth on sign up forms)

Then look into what actions a customer should take to complete the step.

Don't forget to read this: 31 Creative (Yet Economical) Ways To Drive Traffic To Your eCommerce Store

Stage #5: Sales & Re-engage (how to get REPEAT buyers)

Your goal is not only to get one-time traffic but make these people come back to shop repeatedly.

1. Feature order confirmation emails in the mix

Order confirmation emails are the first communication post purchase and see 6X more open rates than other emails. 

Avoid pitching other products in these emails.

Instead, focus more on providing every detail your customers need to know:

  • The order summary
  • When they ordered it
  • When they receive/expect to receive the order
  • The mode of payment used and the payment status
  • The break-down of the cost, including taxes and shopping breakdowns
  • Refund and return policy (just the important details)
  • Contact information of the customer support team

Recommended reading: Convert Organic Traffic Into Customers: 16 Ideas for eCommerce Stores

Here’s a good example of the format of transactional emails by Fitbit.

fitbit order confirmation email

You might like: Order Confirmation Page: 25 Best Practices (+ Great examples)

2. Welcome shoppers to the community

Your welcome emails need to do more than just saying “welcome to the clan” if your conversion funnel analysis has to bear results. 

Research shows welcome emails perform better than your typical transactional emails by 300%.

There are 4 important aspects to focus on here:

  • Strong subject line and headline
  • Crisp and sticky copy
  • Smart placement of the CTA
  • Compelling incentive
dog vacay welcome email example

Check out: Welcome Emails Inspiration: 7 Best ECommerce Examples

3. Exclusive early access

During this stage of the eCommerce marketing funnel, it is easy to drive that sense of exclusivity within your customers. 

However, you need to segment your customers—based on browsing & shopping behavior and their interaction with your brand. 

This includes purchases from your store, searches on your site, page visits, etc. 

Based on this, your campaigns need to be subtle and give out very less. 

Draw them to the website or landing page to reveal the product. 

exclusive early access deals can reduce funnel drop off rate

The Most Important Metrics for Your eCommerce Conversion Funnel

Working with over 500 businesses worldwide and assessing the measurability of various KPIs, we'e figured the following 4 are the most crucial eCommerce purchase funnel metrics:

Cost per acquisition (CPA)

This metric captures the average expenditure you need to make to acquire a new customer. A business needs to calculate this over a specific period of time.

The formula to use is: Variable Marketing Cost (over a time period) / New Customers Acquired (over that time period)

This is an important metric because it allows an eCommerce brand to closely watch how expensive it is to get a new customer even as all other expenditures rise.

Don't forget to read 22 (Really Specific) Ways to Reduce Customer Acquisition Cost in eCommerce

Customer lifetime value (CLV)

When using the CLV as a metric for conversion funnel analysis, the idea is to observe how transactionally fruitful a customer's engagement with you has been over the period they remained a customer. It is important because it lets you assess a customer's profitability and reveals key areas of improvement.

The formula to use is: Number of transactions x Average transaction size x Retention period

Conversion rates

eCommerce funnel conversion rate is perhaps the most important metric that enables an eCommerce business to see the result of a conversion goal that it may have set on its website or app. As a practice, here's how conversion rate is calculated: Total number of conversions / Total number of unique visitors * 100

Conversion rate per channel

To keep enhancing your marketing and UX efforts, it's imperative that you look both at overall conversion rates as well as conversion rate by channel. You can calculate the latter using this formula: Total number of leads from a channel / Total number of visitors from that channel * 100

BONUS: People Also Ask about eCommerce Conversion Funnel

1. What is an eCommerce conversion funnel?

A conversion funnel represents a journey each customer takes through different stages on the website that ultimately lead to the macro conversion.

The different stages include the homepage, product pages, cart pages, and checkout pages. 

There is a significant drop-off of the visitors at each stage and the number becomes smaller as you get closer to conversion. 

As an eCommerce business owner, your job is to discover weak areas and optimize them so there’s a lesser drop rate across stages.

the three parts of an eCommerce conversion funnel

Upper Funnel: The upper funnel or top of the funnel is when the users get to know about your brand. They might come to your website to check the products, pricing, and for overall experience, and then could go to a competitor's website to compare. 

Mid-funnel: When they're here, customers actively know about your brand and explore the offerings at a deeper level with a greater likelihood to purchase.

Bottom funnel: This is where the magic happens. Leads become customers, which increases your eCommerce funnel conversion rates.

2. What is conversion funnel analysis?

Conversion funnel analysis involves a series of actions that fill the gaps between user behavior and the way drop offs happen at various stages of the customer journey. 

The idea behind this is to be able to align marketing, promotional and UX efforts to offer lesser reasons to abandon their shopping journey and more reasons to explore and buy.

Don't forget to check out: Double Your Online Electronics/Tech/Gadget Store's Conversion Rate

3. What is a good eCommerce funnel conversion rate?

The Adobe Digital Index 2020 report found that most funnels convert at a rate of around 3.1% to 5%.

This, of course, can then be seen by the industry with gifting bagging the highest (4.9%) and consumer electronics bringing only a mere 1.4%.

This means anything over 2% can be considered to be doing okay and anything over 4% leaning over the “good” side. 

Check out: 23 Scientific Strategies to Increase your eCommerce Conversion Rate

4. What is another name for a eCommerce conversion funnel?

Generally known as the conversion funnel, it can also be referred to as the sales funnel or the AIDA funnel.

AIDA here stands for “Awareness,”Interest,” “Desire” and “Action.”

5. What are the stages of an eCommerce conversion funnel?

The first stage of “Awareness” relates to shoppers coming across your brand or products when they first begin to see that they need to solve a problem. 

At the second stage, “Interest,” shoppers feel like they’re getting to know your brand and what it has to offer to them. 

At the third stage of “Desire,” they’re looking for more reasons to put their faith in your brand—which means it’s your responsibility to tell them about features, benefits and what sets your products apart. 

At the fourth stage, “Action,” shoppers are ready to go ahead with a purchase. 

eCommerce funnels also present a fifth stage “Re-engagement” where the business attempts to wheel back customers in for repeat purchases. 

6. How do I build an eCommerce sales funnel?

An eCommerce funnel is a sequence of steps designed to help an online store convert visitors into customers. 

The goal of a sales funnel is for your customers to complete the conversion or purchase process, which generally generates a monetary result for you.

The steps can be created manually or automatically depending on the eCommerce platform you use and what tools are available

You can follow the steps outlined above to ensure eCommerce sales funnel optimization.

7. How do you optimize an eCommerce funnel?

There are several steps to doing conversion funnel optimization, and these include: 

- Mapping customer journeys and defining them for each customer

- Actively segmenting marketing and CX efforts for better conversions

- Performing A/B testing and heatmap analysis to improve overall UX 

- Creating strategies that enhance customer engagement 

7. How do eCommerce sales funnels work?

The concept of an eCommerce sales funnel revolves around moving an average customer through a series of stages as they progress through their purchase cycle — thereby increasing the likelihood that they will complete their purchase.

If you design a funnel well (based on customer segmentation, behavior etc.), it is bound to work, because you’re essentially sending the shopper down a path where they will see value in engaging with your brand and products. 

A customer’s journey is not linear — but the more you know about their behavior and history, they become more predictable.

How we can help you 👇

98% of visitors who visit an eCommerce site—drop off without buying anything. 

Why: user experience issues that cause friction for visitors. 

And this is the problem Convertcart solves. 

We've helped 500+ eCommerce stores (in the US) improve user experience—and 2X their conversions. 

Our conversion experts can audit your site—identify UX issues, and suggest changes to improve conversions. 

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