You probably know this - the average conversion rate in ecommerce is just close to 3%.
You can try many campaigns and discount offers to attract more visitors but that isn’t going to do much if your funnel isn’t optimized to convert your potential customers.
If you’re just starting out and don’t know the different stages of a conversion funnel, check out our blog on this topic to get started.
Once you’re done with that and you understand the journey of a customer, keep reading to learn 8 steps to optimize your ecommerce funnel.
1) Make your site really easy to navigate
There should be a clear path for a customer to follow. Whichever page a customer lands on, make sure there are clear steps after that.
Every product page should highlight a shopping cart. The shopping cart should lead to a checkout page
Each step of the conversion funnel should be designed to provoke action from the customer for the next step.
We saw a traditional conversion funnel above but this varies for different businesses. It can be as complicated or simple, depending on the steps and processes you want to analyze.
Visitors arrive at the homepage or product page, add items to the cart, make the payment, and then checkout. Seems easy, right?
No. Because not every visitor takes the same path.
When you’re mapping a conversion funnel, 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 in the funnel.
You can create these different funnels when you are aware of user behavior and how you can convert them into customers.
If you attempt to push everyone through the same funnel, you’ll see no significant improvement in conversions because people may be taking different paths to reach your site.
Work backward. Understand what’s the most important goal of your website. It could be sales, lead generation, or getting customers to sign up.
Then look into what actions a customer should take to complete the step.
2) Set goals for soft and hard conversions
Once you’ve established a flow for customers, the next thing you should do is measure how users are moving through your site.
One of the easiest ways to do this is by setting up goals in Google Analytics.
To measure how your conversion funnel is performing, you need to set goals at every step.
Each stage should have at least one goal and you can even set more if you want to.
Set up goals for all major conversions — sales, email opt-ins, newsletters opt-ins, subscriptions, and resource downloads.
Log into Google Analytics and go to Admin Settings. Select the view or the concerned page, and then click on ‘goals’ from the drop-down menu.
Next, click on “New Goal” on the upper left side. It should appear like this on your GA:
From here, you will have different options to set up your goals.
On the top, there are different templates to choose from. These include online registration, submitting content, referring friends, reading reviews, etc.
If any of these options match with conversions you want to measure, set up those templates and assign yourself a goal.
For metrics that don't show up here, you’ll have to create custom goals. Google Analytics allows four ways to do it:
- Destination: When users visit a particular URL
- Duration: The amount of time spent by the user on the site
- Pages per session: Number of pre-set pages viewed by a user
With each new goal, you can also add a funnel. This means you can add a list of pages that users visit before completing the action, which can later help to measure conversions more effectively.
3) Find channels that drive relevant traffic
Once we have set up the right metrics, we need to minimize drop-offs that happen at every stage. The first step to doing so is bringing in qualified leads who are genuinely interested in your products or services.
When you are targeting broad, you’re casting a wide net and trying to poach people who may not be interested in your product or service. Of course, there are latent customers who need a slight nudge to convert, but the majority may be visitors who will possibly never buy your product because they don’t need it.
Unless your funnel is specific and crisp, you will see larger traffic on your landing page but significantly higher drop-offs with only a fraction of customers making it further.
To attract leads that have the possibility of becoming customers, you need to figure out where your best traffic is coming from.
The answer lies in Google Analytics’ referral source reports.
Go to your Acquisitions → Overview, and you’ll see a report similar to the one below:
On the top, you can see the channels bringing in the most traffic to your site. In this example, it’s Direct.
Next to that, you can see the average session duration, pages per session, and bounce rate. In the last section, you can see the channels bringing in the most number of conversions for your site.
But as you can see, this is sorted by the general channel type.
So, the details such as which search engine you are generating traffic from and what’s included in the ‘other’ sources aren’t specified.
To view that information, open your ‘All Traffic’ report on GA. Something like this should appear:
Click on “secondary dimension”, choose “source/medium” and that will give you the breakdown of the search engines and other details about where you’re getting the best traffic and what can be done to leverage them more.
If you notice some of your ad campaigns bringing in traffic that is ultimately converting, invest more in those campaigns that can help to maximize visitors on your site who are looking for your product, and are genuinely interested in buying it.
4) Identify where micro-conversions happen
Not every customer who visits your site will ultimately convert.
But the fact they found your page and spent time exploring is a micro-conversion in itself. There are many micro-conversions that happen along the way that moves a visitor closer to the purchase.
So, when you develop a funnel, look into the micro-conversions that need to happen before the macro conversion — of the visitor turning into a customer.
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
- Product launch sign-ups, etc.
Your micro-conversions can include as many actions as you like, depending on the business type and site.
Whatever the action might look like, your content will be essential to drive visitors from one step to another in the funnel.
They will need to know more about the brand, where you are based, what products/services you sell, and how you are different from your competitors.
For this, you need to regularly create content on your site, social media channels, and elsewhere, to build authority, recall, and credibility.
But again, not every kind of content will work for all customers.
You need to segment what content the customers will see on different stages that will prompt them to move ahead.
At awareness or top of the funnel stage, you should look into blog posts, newsletters sign-ups, email campaigns, etc., to educate customers about your brand. Don’t focus on promoting the brand but on educating customers why and how your brand is different from others.
This will mean you’re not looking for visitors to immediately convert, but leaving an impression with repeated exposure.
Middle-of-funnel content requires you to take it a notch higher. Here you’re trying to establish the credibility of your brand for those visitors who know about you but haven’t bought anything from you.
Testimonials, case studies, social media marketing, and ad campaigns can help customers move closer to knowing your products, and therefore, buying from you.
Unlike the top of the funnel, your message here should be promotional telling customers clearly why they should choose you over others.
Bottom of the funnel is where users come close to becoming a customer. Discounts, free shipping, freebies, loyalty programs, referral marketing, etc. can give the user a final nudge to make the purchase.
5) Find where shoppers (generally) drop off
When a customer enters the marketing funnel, you want them to make it to the end.
But in reality, only a few do.
So, where do other users go? Why are they not making it to the end?
That’s because each step in your conversion funnel has holes.
Think of it this way: Each level of funnel filters out users who aren’t interested and qualify the other ones to the next level. There are many users who leave by the side.
These holes are called exits or leaks in your marketing funnel.
While some of the users may have left your funnel because your product/service doesn’t serve their purpose, the other fraction may need a nudge to move further in the conversion funnel.
Sometimes, your website doesn’t do the best job moving them to the next step in the funnel.
So, how to identify these leaks?
Open the sweet GA again. If you have added funnels to your goals in GA previously, you can go to the Funnel Visualization Report to check this.
Select “conversions” from the Analytics menu and then click on “funnel visualization”.
Once you come here, you’ll see a detailed visual representation of how users move through your website.
The above screenshot is a breakdown of the journey a customer has taken on an online ecommerce store. Users have gone from adding items to the cart to billing and shipping, and then finally making the payment before they leave a review to complete the transaction.
You can see here at what stage you are losing the visitors. You can see what steps they’re exactly taking rather than staying on your website.
The right column in the picture tells you where the visitors are going when they don’t move further on your site.
From here, you’ll have to weed out what leaks are causing a significant dropout and which ones don’t make any difference. For example, some visitors are coming to your destination page in the above screenshot and then moving to the sign-up page. This means they have an account on your site and are likely to return to the checkout page from their account.
But in other cases, people are getting distracted by other pages on the site or they’re dropping off, and this is where you need to do the work.
If you can see certain pages in your funnel bringing in higher conversions, you should focus on finding out what is working here that is not working for other channels.
But before that, you may need to consider another parameter. What if your conversion funnel doesn’t accurately represent how users move through the site?
Well, the only way to find out is by looking at the Reverse Goal Path report.
This report shows you how a visitor arrived at the conversion rather than how they move through the funnel.
You can also refer to the Goal Flow Report for similar insights.
This report provides an analysis of the common paths taken by users from the beginning. Rather than telling you about their last actions, it helps you monitor them from the very start.
This can help you learn more about visitors’ behavior and if their actions are in line with your conversion funnel, so you know if you should make any changes to your conversion funnel or not.
6) Heatmaps and A/B tests: always a good idea
At this stage, you’ve identified the problems in your conversion funnel, and now it’s time to fix them.
In many cases, the leaks or drop-offs will be on key conversion pages.
For instance, the average shopping cart abandonment rate is 69.23%. That means from every 10 people who add items to the cart, three of them purchase from you.
So, if you notice a lot of customers adding items to the cart but not completing the purchase, that should be your key focus area to improve.
So, what can you do that will push people to the checkout page from the shopping cart?
There might be many reasons that generally come into play why users don’t check out on your page.
But how can you tell which one is causing low conversions from this?
For that, we use Heatmaps.
But before you conduct a heatmap analysis, you need to do some homework.
You need to learn more about the people who took the action on your site and those who didn’t. Were there any roadblocks? Did you show discounts to some and not to others? Does the non-converting audience have any objections?
Once you have done your homework, look into heatmaps. These maps are a visual representation of where your users focus their attention on site and where they don’t.
Check out this example:
The glowing areas are where the customers are focused. This means a majority of people are clicking on these areas.
Since the purpose of this page is to drive more people to a CTA, it looks like they’ve done a good job in capturing customers’ attention & getting them to take action.
But what if that wasn’t the goal? What if they were supposed to go to another page? Then you know where customers are getting distracted and you can work on eliminating those distractions, so they can convert on the right page.
Now, say, this is how your heat map looks like:
How are you going to figure out where your customers are most focused? You can’t.
That means you have some serious work to do. You may have to remove a lot of distractions from here or make your CTA really stand out, so the customer converts where you want them to.
Running heatmaps is the easiest way to gain insights into why your customers aren’t converting.
The other way is a rather obvious one.
You should ask the customers yourself. Of course, we’re not suggesting dialing each of them individually, but you can look into creating surveys that will tell you why they are not taking the ultimate action on your website.
The more effectively you’re able to address the audience’s concern, the faster you’ll be able to grow and see the conversions rolling in.
Once you fix the issue after looking at the insights on heatmaps, you need to take one more step.
If you don’t know how A/B tests work, we will tell you.
You create two variations (Variation A and Variation B) and test them out against each other. After running the test, you see which variation generated more conversion against another.
Here’s an example:
If you want to test which CTA will generate more conversions between orange and green, your test will look something like this:
To run an A/B test, you need to divide your traffic between two variations, so you can collect data for both simultaneously.
Every time you learn about the possible changes for your site, you can A/B test them to know which one has the scope to bring more conversions.
While getting actual conversions is great, don’t lose sight of the micro-conversions you are getting on the website, as that is a victory in itself.
Also, when you focus only on getting conversions, you are only looking at the bottom of the funnel. But when you consider the users who made it past the awareness stage and have the latest desire towards your product, you can move those users faster to the next step.
When more people move further in the funnel, your likelihood of conversion also increases.
7) Measure the right metrics
In order to keep the cycle going in the right direction, you need to measure ALL the right metrics and accordingly find & fix gaps.
Here are a 8 metrics that'll help you measure the effectiveness of you funnel at each stage:
1) Conversion rate: Measures what percentage of your total visitors actually convert into paying customers. You can calculate this metric by using this formula :- Number of customers/ Total or average website visitors.
2) Click Conversion Rate: Similar to the previous metric, this measures the click through rate to conversion ratio. For instance, if you ran a Ad campaign and it had 1000 clicks and 100 customers, it means that you have a 10% click conversion rate. You can calculate this metric by using this formula :- Number of conversion clicks / Total clicks.
3) Cart abandonment rate: The rate at which your visitors leave your site without buying anything. In specific, how many visitors actually add something to the cart and then leave without completing the checkout. You can calculate this metric by using this formula :- 1 - Number of completed checkouts / checkouts initiated x 100%
4) Add to Cart Rate: Measures what percentage of your visitors add an item to your cart. You can calculate this metric by using this formula :- Number of add to carts / Total visitors.
5) Customer Lifetime Value: Measures the value of each customers or the amount each customer has spent on your store to date. You can calculate this metric by using this formula :- Average customers lifetime x average monthly spend x % gross margins.
6) Average order value: Measures the amount of money a customers spends on your store each time. You can calculate this metric by using this formula :- Total revenue / Number of checkouts.
7) 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. You can calculate this metric by using this formula :- Number of customers who bought more than once in a time period / Total customers in that period.
8) Returns: Measures what percentage of your orders are returned for whatever reason. You can calculate this metric by using this formula :- Number of return requests / Total number of orders fulfilled.