Conversion funnel: how to build, analyze & optimize
May 21, 2019
What is a conversion funnel?
A conversion funnel, also referred to as a site funnel, is the path to purchase in an eCommerce store or site. In some ways, it can be compared to the traditional marketing funnel, but different than a traditional funnel, most of the steps are occurring on your site.
Generally, there are five steps in a site funnel for any given website. You can add additional steps depending on your particular website and what makes it unique.
Five steps in a site purchase funnel
- Site visit - A customer arrives at your site
- Product view - Customer views a specific product page for more detail
- Add to cart - Customer shows a strong preference for a product by adding it to their cart
- Enter checkout - Customer shows strong intent that they will purchase your product
- Purchase - Customer goes through the entire checkout process and completes the transaction.
Many web traffic measurement tools will offer a breakdown of these five steps. For example, in Google Analytics, you can find the site funnel in the Shopping Behavior area of the eCommerce section.
Although five steps may seem simple, a myriad of factors influence the customer journey from the initial site visit to a completed purchase. The reality is, the vast majority of visitors will not complete the transaction. However, there are ways to improve on these odds to result in more purchases.
If eCommerce transactions are not your first priority, a similar framework can be applied to whatever your website goals are. Perhaps gaining more sales leads is of higher importance, for which a typical funnel for a goal of increased sales leads would be:
- Site cisit
- View content
- Request to learn more
- Enter contact info
You can create a goal of ‘acquiring leads’ in Google Analytics or another web traffic tool. Adding steps to the goal will allow you to see the goal flow similar to how a conversion funnel flows.
The importance of a conversion funnel analysis
A conversion funnel analysis is a powerful tool any company can use to improve their business. By evaluating each of the stages mentioned above, you can begin to understand how many of your site visitors are progressing through each of the stages in the funnel. To make your analysis more valuable, you may also want to evaluate the funnel flow based on consumer groups, the device used to visit, or other segments that make sense for your business.
Once you’ve completed your first conversion funnel analysis, you will have a baseline measurement to benchmark against and use to improve and optimize your site experience.
Considering more than just conversions
If looked at in a vacuum, optimizing within the funnel based on a single metric can seem relatively easy. However, increasing one metric could have long term negative impacts on the other KPIs of your business. While conversions, transactions, and leads are the ultimate goal, there are other factors that are important to understand when driving towards success. Metrics such as revenue per visitor, average order value, gross margin; for leads, and quality measurement of a lead are useful and important metrics to understand since they all can affect the outcomes of funnel-related actions.
A great example of this is a hyper-focus on lead gen. Although you may find a system that works for consistently improving your lead generation volume, if the new leads never become customers, the significance of this optimization loses its value against the overall goal of trying to generate more customers for the organization.
How do you optimize a conversion funnel?
Depending on your business and website, there are countless changes that could result in improved performance in your conversion funnel. That being said, you should keep in mind that conversion funnel optimization is an ongoing effort and something that is never truly ‘completed’.
To conduct a conversion funnel analysis, you need to have:
- a specific area you’d like to focus on improving
- a hypothesis that could improve the performance of this part of the funnel, and
- an ability to A/B test the hypothesis
Since not all hypotheses will generate positive results, the A/B testing component is critically important to guide the decisions and strategies that lead to fully-implemented changes.
Two areas on your site that could improve conversions or increase lead generation are product/service pages and the checkout experience.
- Product pages
Having pages specifically for your products allow you to test hypotheses based on questions about the page that affect site conversions and leads, which can include questions like:
- Is the Request Info or Add to Cart button prominent on all devices?
- Are there product reviews or testimonials that could be added to the product page?
- Is there certain information (i.e., product size, trial details) that could be made available on the page?
- Are there videos that could be embedded on the page that showcase the product in use?
- Checkout experience
A seamless checkout experience, especially on mobile, is absolutely necessary for improved site conversions. Consider tactics to remove friction and improve conversions, such as:
- Implementing mobile wallets like Apple Pay
- Adding alternative payment methods such as PayPal or Affirm financing
- Assessing whether all the data collected during the checkout process is required or if there are parts that could be eliminated
- Reducing the number of pages in the checkout flow by removing data collection or redesigning the page
Continuing to build, analyze & optimize your conversion funnel
To recap how to start converting more site visitors:
- Identify the goal (transactions, sales leads, etc.)
- Measure your baseline for each of the five conversion funnel steps
- Brainstorm hypotheses and ways to improve the customer experience
- A/B test your hypothesis
- Roll out positive test results to all users
Improving your overall site experience and conversion funnel is an ongoing process that has many solutions. But at the end of the day, it’s important to remember that the leads you’re looking at in the funnel are human beings in real life, so each part of the conversion funnel you can improve means improving the experience of a consumer. By keeping up with consumer preferences and expectations, the changes you make — no matter how big or small — can add up to long-term improvements for your entire organization.