The ecommerce marketing funnel and how to use it

03 Sep 2019 11:58am, by YorkshireSquare


The sales funnel is the way that the average consumer of a product or service goes from drawing his or her attention to the offer to the purchase via ecommerce marketing platform. In Wikipedia, ecommerce marketing funnel is defined as a marketing model, which in theory illustrates a journey at all stages of a purchase: from familiarity with the offer (first touch) to the completion of the transaction (final touch). Entrepreneurs and businessmen know that a sales funnel helps multiplying their profits. It doesn’t matter if it is built up in the Internet trade or in the process of “offline” sales of goods in the store – the model works in all cases of work with a client. In the current situation, when the supply of goods often exceeds demand, it is becoming increasingly difficult to attract customers directly, which is called head-on, the use and competent analysis of the sales funnel will make it possible to act on potential consumers in a subtler and unobtrusive way, imperceptibly adjusting to their needs.

The concept of an acquisition funnel, which describes the client’s psychology, was announced for the first time in 1898. Since then, the concept of sales funnels in marketing has become one of the basic ones. This means that the sale itself is preceded by 4 stages of customer readiness:
  • first, their attention is captured (for example, by advertising tools)
  • then, interest is generated (the content of the advertising appeal)
  • then the potential buyer has a desire to take advantage of the offer
  • finally, our client acts (calls the company, comes into the store or to the site)
The purpose of the seller (or advertiser) is to make the initial attention transformed into real interest supplemented with money. How to build a working sales funnel – that is, one in which the client “falls” and is guaranteed to reach the bottom, in other words, does the acquisition? This is the art of marketing. The number of potential consumers of services and products is influenced by many factors:

  • ways to promote the goods (advertising, the accuracy of the information, visual demonstration)
  • the ability to find the right audience
  • pricing and marketing policy (discounts, promotions, additional benefits)
In short, the consumer must understand why buying from you is more profitable and better. This model reveals the main stages of sales and shows how they consistently complement each other. Despite this, some managers take the sales funnel too narrowly – only as a reporting term, forgetting or not knowing that first of all the purchase funnel is a functional tool with great potential. The sales funnel is an ideal method of analyzing the productivity of individual employees as well as the entire commerce department or site. Maybe you opened an online store and now your task is to attract as many customers as possible and sell them the maximum amount of goods. With this model, you can find out at what stages of sales the largest number of potential buyers is eliminated and take measures to eliminate the existing problems. Sales Funnel is a visual, detailed tool. It is easy to present the sales funnel in Excel by adding an infographic element to the most boring digital reports. The developers of CRM systems may implement sales funnels sometimes in a very unusual way.

Now let’s talk about such an important element as conversion. The conversion of the sales funnel is an indicator of the effectiveness of a particular level (or stage) of this tool, measured in percent (%). In other words, the conversion is the ratio of potential actions to actual ones. Example:

  • 1,000 people on the street saw the banner of the company (I stage of the funnel)
  • among those who saw, 100 people called the company (funnel stage II)
  • among the callers, 10 people came to the store (funnel stage III)
  • 1 person made a purchase in the store (IV stage of the funnel)
So, the conversion at the first stage will be equal to: 100 people (actually calling) / 1000 people (potentially calling) * 100% = 10%. Similarly, you can calculate the conversion at each of the 4 stages. The effectiveness of the entire process in this case is 0.1%.