A conversion funnel describes the stages in a customer’s journey leading to purchasing products and services. The different stages in the conversion funnel are divided into the upper, middle, and lower funnel. Also known as a sales funnel, the conversion funnel helps you visualize and understand your customer’s journey, from the time they land on your site to taking the desired action.
This process is called a funnel because it involves a marketer guiding a customer towards the conversion point. Visitors flow through sites every day, creating traffic that translates into conversions, sales, and sign-ups. Conversion funnel analysis can help you identify why users are leaving your website to help you measure and increase conversions.
Entrances
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Conversion funnel entrances signify where leads come from. The truth is, some online channels can be more productive for your customers and brand than others. Modern leads come from everywhere. They come from search engines, affiliate links, recommendations from friends, or social media. Therefore, it’s essential to consider every entry point for a full-funnel experience.
Conversion funnels are divided into; the upper funnel, which represents a point at which a user starts researching a product, middle funnel when users get clued to a popular brand and may have signed up for email campaigns. The lower funnel signifies the point where users make decisions and go through reviews and other information from earlier customers before they purchase.
The most common way to work on your funnel experience is by mapping entry points from the top where your target audience decides to visit your website, begin shopping, and eventually make a purchase. Mapping your entry point can help you create an online experience that will encourage customers to the final purchasing phase.
Conversion Rate
Conversions rate represents the number of entrances that convert into customers. Conversion happens when shoppers take your desired action and often happens at the lower funnel. While the desired action could also include signing up for your newsletter, at this phase, the focus is on guiding shoppers to become customers.
There are four conversion funnel levels: awareness which focuses on pulling customers; interest level, which focuses on building interest in your products and services; the desire that helps prospects learn more about what you offer; and lastly, the action level. The conversion rate happens at the action level.
Until then, leads flowing through the funnel such as signing up newsletters or downloading eBooks can only be considered as micro conversions. However, conversion rates can happen at every stage of the conversion funnel. To improve the number of users towards taking your desired action, you need the best branding strategies and practices.
Total Sales
At the end of the day, what determines the success of any strategy are the total sales. Total sales are the total revenue from orders placed within a certain period. Total sales represent how much money your funnel is bringing in.
Tracking your total sales can be a great way to evaluate and determine how much money your sales funnel is making. To tabulate your total sales, you’ll need to add up all the revenue generated from the set sales period or multiply your total sales by the price per unit of the items sold.
Total sales are essential metrics to help you measure the overall effectiveness of your conversion funnel and track your overall business growth over time. You are in a great place if your total sales are high and when you are converting more customers. If your sales aren’t acting up, then you may need to reconsider measures like ramping up customer acquisition or adjusting prices on your products.
Average Order Value
Average order value is another essential metric representing the average revenue generated by an order or the average amount spent on a sale per customer. To find the average order value, you’ll need to take the average revenue generated within a certain period divided by the number of orders you have received.
The average order value helps you determine the value of every customer who gets to the last level of your conversion funnel. If your average order value is lower than expected, consider expanding your target audience and look for customers who will spend more. While at it, you need to consider your customer’s spending habits to understand their impact on your business.
Key Takeaways
Conversion funnels apply to any business as long as you sell a product or service. The conversion funnel is a buying process, and your goal is to guide the customer through each stage of the funnel till they convert. Identifying gaps within the funnel can help you identify what you need to improve on to drive high conversion rates.
