Whats A Sales Funnel And How Do I Use It For Ecommerce?

19 Jun 2023

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If you've heard the term "sales funnel" but you're not sure what it is, here's a quick summary: A sales funnel is a term marketers use to describe the journey a customer goes through when interacting with a brand. It starts with a customer discovering your brand, taking an interest in what you offer, learning more, ultimately making a purchase, and becoming a repeat customer. The insightful part: By measuring your sales funnel and seeing where people are dropping off, you can tweak your strategy to guide potential customers along the journey. That way, you can convert people who have noticed your brand into paying customers who spread good word about your business. With so much data available to ecommerce businesses, the tools you need are at your fingertips.

Are they taking notice?

The discovery phase is the first, widest part of the sales funnel. If you don't have much of a marketing budget, chances are you're relying a lot on social media – and that's a good thing, because it provides you with good performance metrics. At a glance, you can see how many people liked and shared your post. If you switch your account to a business account, you can get even more insights, like how many people the post reached and the click-through rate. If you do have some budget, you can consider creating targeted, sponsored campaigns, where you can choose who will see the content.

Were they intrigued?

There are various ways to gauge if people are moving down the sales funnel and taking an interest in your brand. They may ask questions or click through to learn more. Look for trends in what people are asking and clicking on and use that information to guide them towards a purchase. For example, if you're noticing a lot of people asking about delivery times, put your next-day-delivery promise front and center. You can also analyse how much time people spend on different pages of your ecommerce site to see what interests them.

Are they willing to pay?

The sales funnel starts getting narrower when you head towards price negotiation and the decision to buy. Looking at where people chose to "add to cart" or "book now" can give you insight into what the final nudge was for them. Experimenting with sales and discounts can give you insight into whether you need to re-evaluate your pricing.

Did they follow through?

The transaction part of the sales funnel doesn't just bring income – it can provide a wealth of information as well. For starters, you want it to be as seamless as possible, so if customers are starting the transaction process, but not going through with it, you can analyse at what point they're dropping off and address the problem – are there too many steps? Does your ecommerce platform not appear trustworthy? Does it load too slowly?

Are they coming back?

The final – and narrowest – part of the sales funnel is to turn once-off customers into repeat customers and there are various ways to use data to achieve that. One option: You can ask them to opt in to receive future offers and newsletters, which you can use to offer related or similar items to what they initially bought.

There's no shortage of data available in ecommerce – the trick is to use it effectively at every point in the customer's journey to make doing business with you an easy and enjoyable experience. To find out more about how to use data to improve your customer journey, read about Measuring small business performance or the Top digital metrics for your business.