Where do the conversions happen!?
Between hearing about your product and buying it - there were most likely a series of planned events a consumer experienced either knowingly or unknowingly.
Via a multi-channel effort to move them, the online consumers, toward purchasing.
But to make that final push, one must know the phases that could urge that buy, and the right action needed at those stages.
What is a Conversion Funnel?
In sales, the “funnel” is basically a concept that represents the various stages of the consumer's journey.
And the ecommerce funnel can be split into stages, the stages that lead to an actual conversion.
Thinking in terms of a funnel is helpful to identify drop-off points and thereby optimise effectively for the future.
HOW TO TAKE IT A STEP FURTHER?
- Facilitate AI-powered chatbots on Whatsapp, Instagram, Facebook to help brands resolve customer queries and enable purchases
- It’s also presently the most important means of personalised shopping.
- Chatbots automate customer communication and greatly help in building a strong relationship converting every customer to a ‘Loyal Customer’
Stages of a Conversion funnel
Every brand has a different approach in terms of marketing and other strategies for various stages. And that number of stages varies from brand to brand. But on the basic level, we can classify those stages into the following:
1. Education & Awareness stage
Online consumers in this stage— who we refer to as the ‘upper funnel’ or ‘top of the funnel’ (or ‘ToFu’ if you’d like a cool term)— those who have recently noticed or heard of your brand, but have not taken the next step.
This is usually the one where marketers understand— the data they gather and analyse to know where the awareness-based content is, where the consumers click (or at least get close to doing so).
Education & awareness-driven marketing include things like…
- Social media ads to people who have not heard of you, but are more likely to want you (e.g haven’t followed you on social media but follow similar brands or influencers).
- Search engine marketing ads for broad product terms (e.g. searches for ‘safe home cleaning’ if you sell eco-friendly cleaning products like BornGood), affiliate content strategy like social media campaigns built to go viral.
A good education & awareness marketing succeeds at two things:
- Reaching online consumers who would actually be interested in purchasing.
Made possible through hyper-targeted marketing through an Omnichannel approach, where you target based on individual data— different age groups, demographics, locations, purchase history and preference (compiled information from across platforms and 250+ brands) - Providing them with a ‘hook’— a compelling reason to take peak. With 50% of the reason to take a peak being the choice platform used, and with a personalised message (because of personal info).
2. Interest and Consideration stage
This would be the ‘mid of funnel’. Where the potential customer asks to themselves:
- Do I need this product/service?
- Is this brand right for me?
- Would this set of features benefit me?
All these questions need to be answered at this stage, to show the customer that you understand their pain points and have the ideal solution to solve them.
The idea and goal at this point is to get those potential customers to research your product more in-depth.
This stage would be more than just advertising because you’re not here to create intrigue but you’re here to fight off the competitors and make a stand saying you’re what the consumer needs.
But what are the major consideration/interest-focused marketing campaigns?
- Updating your product page with detailed photos or features
- Asking customers for reviews to build social proof
- Content marketing through comparison articles (e.g. ‘How our Checkout Service stands from other traditional checkout processes’)
- Campaign-based marketing
- Social media ads that retarget website visitors
- Newsletters to existing subscribers
- Sending free products for influencers to review
3. Action stage - Transition or conversion
The transition or conversion stage is obviously the ‘bottom of funnel’— because here’s where the potential customers are so close to becoming customers.
Meaning, they are close to buying. But there are just a few internal objections.
Picture a consumer with their credit card in hand, but some aspect of what they see seems to be stopping them. At this point, the goal is no longer to make them research because the item is already in the cart. To put it bluntly, the goal here is to get them to stop thinking about it and just buy it already!
The questions they shouldn't be thinking about
- Do I really need this service/product now? (insert FOMO banner)
- The product may be too expensive (insert discount pop up)
- Shipping is too slow or expensive (insert free/1 day shipping)
- What if the quality isn’t the way it appears to be? (insert UGC content)
4. Post-purchase
No. the funnel does not end once the online consumer makes a purchase.
If you’re not an amateur marketer, you’d know that ‘Loyalty’ and ‘Advocacy’ are part of the funnel too.
Why?
- A Loyal customer brings potential customers through WOM (word of mouth) alone
- Acquiring a new customer can cost five times more than retaining an existing customer.
- The success rate of selling to a customer you already have is 60-70% (while the success rate of selling to a new customer is 5-20%)
- They are also more likely to leave a review
Hence making them highly valuable!
Planning strategies to influence the Loyal customers can be one of your highest-ROI activities.
Examples of few sure-fire methods:
- Repurchase - Add headless commerce through social media and other display retargeting, cross-selling, upselling, loyalty programs etc.
- Review. Automated customer outreach services collecting NPS (Net Promoter Score), while also inserting product and other promotions.
- Refer. Attach automated referral tools to engage with the social-media-keen generation, urging customers to share and take it further.
Ways to track progress down the Conversion Funnel
As we spoke earlier, the number of stages in one brands’ funnel will differ from the other out there - meaning, the customer journey differs, and is not easy to pinpoint.
Some consumers may take 1 single advert to convince whereas others might take 5 different adverts over the span of 2 weeks.
There are a million possible journeys, but we should be glad that there are numerous methods to collect data on most of those messy journeys.
From single source data like Google analytics, to aggregates such as WhatsApp, Instagram, and Facebook in a spreadsheet or dashboard.
Given this, there are 3 common measurement approaches for a conversion funnel:
1. KPI-based
In this model, you assign KPIs (key performance indicator) for each individual stage of the funnel. Judging the collective efforts of the elements in the stage by how well they move these key metrics.
Example:
- Awareness: Reach, New site visits, New Subscriptions, Landing Page Views
- Consideration: Repeat Users, Customer Reviews, Visits to Landing Pages comparison to Visits to site (to gauge visits with promotions and without)
- Conversion: Adds to Carts, Average Rate of Conversion from Checkout to Purchase, Average wishlist additions, Recovery rate of Abandoned carts
- Post-Purchase: Revenue from Loyal customers, revenue from their referrals
Here, the total revenue is used as the ‘overall KPI’ for marketing.
Making this the ideal method, but not simplest considering it’s harder to track individual initiatives.
2. Campaign-based
In this model, each campaign is assigned a funnel stage, and you get to analyse them on their campaign-specific metrics.
Example:
- A certain number of campaigns would be labelled ‘awareness’
- For those campaigns, you define the metrics such as
- Reach
- Adds to carts, and
- Revenue
- Then label another set of campaigns as ‘consideration’
- And so on
Here it’s much easier to track as well as compare individual initiatives to each other.
However, since each can have its own set of metrics like - Clicks on ads vs Clicks on an email.
It might be difficult to establish a so-called ‘guiding star’ performance metric for each stage.
3. Attribution-based
In this model, just like the previous two, they still line up campaigns by stage, but instead of measuring a set of different KPIs, they measure just one: i.e. Contribution to revenue.
Where they break down customers by history with individual channels, and attribute different measures of value to each touchpoint.
Example:
Brenda’s purchase was influenced by both the Facebook ad and Pragma's abandoned cart recovery message.
In the journey-based model, Brenda’s X rupee purchase would be attributed partially to Facebook and partially to Pragma. And a simple model would split them 50/50: equally distributed between Facebook and Pragma.
This model requires integration of data from across multiple platforms; in this case, Shopify, Facebook, and Pragma.
When integrated with all channels - WhatsApp, Facebook, Instagram, Email, SMS, and VoIP, they provide the full picture.
Once implemented based on individual brand needs, it can provide a comprehensive overview of performance in the funnel.
To Wrap it Up
If or when you’re planning your conversion/sales strategy, or even your website’s content, pay some heed to this conversion funnel - because its powerful framework establishes minimal loss of potential customers.
And as a D2C Business, there is nothing more important than getting to know your customer's actions. Which the funnel helps you understand - from what they’re thinking, to how you should respond to that thought.
Be Pragmatic. Be Pragma.
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