Unlock Ecommerce Sales Funnel Secrets
Psst…looking to:
✔️ Acquire new customers *profitably*
✔️ Boost average order value and checkout rates *the easy way*
✔️ Skyrocket Shopify growth *and sustain it*
…but you have no idea where to even begin?
Well, you’re in the right place. This article will give you a leg up on the competition. It’s a must-read whether you’re a gung-ho solopreneur eager to dive into your first Shopify store, or an established ecomm whiz looking for new growth hacks.
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Contents
- Getting Started with Ecommerce Conversion Funnels
- How the Big Dogs Optimize their Ecommerce Funnels
- Best Shopify Apps to Boost Checkout Conversion
- 4 Common Ecommerce Sales Funnel Mistakes & How to Avoid Them
- The ESSENTIAL Conversion KPIs You NEED to Track
- Conclusion
Getting Started with Ecommerce Conversion Funnels
Funnel this…funnel that…If you’re new to the world of ecommerce (welcome!), you’ll probably run into countless resources, videos and gurus deep-diving into the importance of funnels.
This article will unlock several ecommerce sales funnel secrets. But before we get into the nitty gritty of it all, we need to start on the same page.
What the heck is an ecommerce sales (or conversion) funnel anyway?
A sales funnel is what turns total strangers into raving fans of your business.
In ecommerce, it’s an online process that takes visitors on a digital buyer’s journey. Hopefully, the journey ends with them buying something, buying something again, and eventually telling all their friends about your business.
Why the funnel analogy? Because at each step, there are drop-offs. Few people will ever make it all the way from the top to the bottom of the funnel. Not every visitor will be a buyer. And that’s okay!
Each consumer interacts with the funnel in a different way. For some, it’s an easy sale. They’ll breeze through your funnel going 150mph. Others may have more purchase objections and bounce…or slog through your funnel at a turtle’s pace.
You can’t always predict consumer behavior — but you can build a state-of-the-art funnel that makes the customer experience as easy and seamless as possible.
What are the stages of an ecommerce sales funnel?
Awareness Stage
First things first — the world needs to know you exist. At the top of the funnel, in the awareness stage, people discover your brand for the first time. It may happen organically, through SEO, content marketing and/or paid traffic. Either way, it’s important you make a great first impression and reel ’em in.
The first stage may drive traffic to your store…which is all well and good…
But if what they see there doesn’t hold their interest, say buh-bye to all the time, effort and ad dollars you just spent ushering them through the door.
PRO TIP: Make sure every touchpoint tells a cohesive story about your brand — from your Facebook ads to your shop’s homepage.
Consideration Stage
If you manage to pique their interest and create desire for your solution, congrats! You’ve brought the lead into the middle of your sales funnel. During the consideration stage, potential buyers might subscribe to your newsletter, read the product description pages and browse customer testimonials.
During this stage, use conversion-driven messaging, social proof and other irresistible content and offers to keep them on the hook. Ease their mind with money-back guarantees, show them trust signals and raving reviews.
Buying Stage
Once the customer is at the bottom of the funnel, you’ve almost closed the deal. But sometimes they need a little extra push before they’re 100% ready to whip out their Visas. At this stage, you may need to offer a little extra incentive (i.e. coupons, free shipping etc.). It’s important to have a simple, frictionless checkout process to encourage customers to seal the deal.
Retention Stage
They did it once, but will they do it again? It’s not enough to ring in endless new customers. For any Shopify store to succeed, you need to get repeat customers. Even better — raving fans who spread the word to their friends and families. It’s much easier and cheaper to retain an existing customer than acquire a new one. At this final stage, loyalty programs, retention email marketing and great CRM come into play.
How the Big Dogs Optimize their Ecommerce Funnels
Sales funnels aren’t a one-and-done kind of deal. Ever wonder why the top 1% of Shopify stores are raking in multi-millions while the majority of stores struggle to stay profitable?
The best Shopify businesses optimize their funnels constantly. They are *always* testing.
The good news is, you don’t need a large, world-class team of CRO specialists and growth hackers to be successful. You don’t need to run thousands of experiments a month to see results. You just need to learn some best practices and start experimenting!
What is Conversion Rate Optimization (CRO)?
CRO. Maybe you’ve heard this buzzword floating around, but never gave it much thought? Well, CRO is the secret to scaling growth. Massive. Repeatable. Growth.
Conversion rate optimization involves tweaks that improve your store’s conversion rate over time. It’s all about making tiny changes that stack up until they’ve resulted in huge wins for your business. Obviously, a discussion about CRO could be an article in itself. This section will only teach you a high-level overview of how to use CRO to optimize your sales funnel.
➡️ Step 1: Define conversion event you want to improve(i.e. downloading a lead magnet, buying a product, subscribing to your newsletter). Answer the question, “What action do I want more customers to take?”
➡️ Step 2: Map the customer journey. Review each stage of your conversion funnel and document them in detail.
➡️ Step 3: Identify friction and drop off points. It’s time to do some research. Collect some quantitative and qualitative data and make some hypotheses about why leads are not progressing further down in the funnel.
➡️ Step 4: Test your hypotheses and you’ll end up with a lot of losers and some winners. For example, tests could range from light UX tweaks to trying new Shopify apps to improve AOV and upsells. Keep testing to stack these small wins over time to improve your overall conversion rate.
CRO PRO TIPS
- You can’t optimize what you don’t know. Before you make assumptions about your target audience, conduct a thorough audit. Really get inside their brains and study their behaviors to learn what makes them tick.
- Keep it simple. Remove distractions so it’s easy for customers to take the desired action.
- Base your hypotheses on data and test regularly and methodically over time.
- Never. Stop. Testing!
Best Shopify Apps to Boost Checkout Conversion
DID YOU KNOW? According to Statista, in March 2020, 88% of online shopping orders were abandoned.
After all that work making ads, running campaigns and driving traffic, it can be disheartening to discover so many visitors never take that last step. Growing competition and increasing amounts of distraction make it harder for visitors to seal the deal. For pricier products, there are even more purchase objections.
Luckily, Shopify merchants have an arsenal of apps at their disposal to boost conversion rates. In 2019, Shopify announced that more than 80% of their merchants used third-party apps. Chances are, your store is already running one or more apps.
As of 2020, there are 4200 apps in the App Store. With so many choices, it’s no wonder merchants feel overwhelmed.
While there are a plethora of apps that serve a variety of purposes, this article will focus on the best apps to boost conversion rates at the bottom of the funnel. We’ll quickly go over what to look for in a great Shopify app, then give you a few expert recommendations.
Expert Recommendations
Without further ado, here are three recommendations for conversion-boosting apps.
Remember, once shoppers have already demonstrated high purchase intent, installing a few choice pop-ups may reduce your cart abandonment rate.
Best app for stackable discounts and upsells…
5/5 stars (54 Reviews)
Imagine this: it’s Q4 and you’re running several large BFCM campaigns. You need to clear old inventory and you want to offer free shipping, 20% off your cozy PJs and 40% off sandals. Oops, your customers can’t enjoy all these offers.
Shopify does not offer multiple discounts: customers can only use one coupon code per order.
This means if they want discounted PJs they can’t also get discounted shoes. If they want free shipping, they can’t have discounts.
Previously, merchants had no solution for this frustrating issue.
Enter Stackable.
Stackable allows customers to apply multiple discounts to their order. A widget shows customers all the discounts available to them and automatically applies them when customers add relevant items to cart.
Why this app is awesome
- AI discount engine automatically finds and applies best deals to customer’s cart
- Real-time discount notifications incentivize upsells and increases AOV
- Mix and match multiple discount types (fixed, percentage, BOGO, manual codes etc.)
- Plug-and-play installation, compatible with Shopify POS
Best app for special offers (bundles, free gifts, volume discounts etc.)…
Ultimate Special Offers by Pixel Union
4.4/5 stars (489 reviews)
One of the best ways to increase AOV and checkout conversions is by using many types of special offers.
Amazon does a great job of this. Every time customers are looking at a certain product, they have several rows of recommendations lined up underneath the main product description. They have subscribe and save options. Cross-sells. Bulk discounts.
Not only do merchants make more profit, but customers are happier, too. Customers enjoy a better shopping experience by buying additional products that match their needs, often at a discounted price. They save time by making your store their one-stop shop. This improves customer retention as well.
Why this app is awesome
- Affordable pricing starting at $9/mo
- NINE types of offers — great variety available (bundles, BOGO, bulk, upsell, free gifts, post-purchase upsells and more)
- Efficiently run and manage multiple sales
- In-depth offer analytics
Best app for recommendations…
Skafos Product Recommendations by Skafos.ai
5/5 stars (3 reviews)
Product recommendation apps drive as much as 65% of total revenue at top Shopify stores. But the problem with traditional recommenders is they only allow you one opportunity to predict (or guess!) what the customer is really looking for. Get it wrong, and you’ve lost your customer.
However, if you allow shoppers to give feedback on product recommendations by saying “yes” or “no”… you more than triple your chances of converting that customer.
Skafos call this “interactive guided shopping.” They enable your customers to interact with product recommendations with “likes” or “dislikes” similar to a social feed, so their AI-powered algorithm can recommend more relevant products in real-time.
Why this app is awesome
- Customers love the interactive, visual experience! It’s a much nicer user experience than sifting through a catalog or endlessly scrolling a collections page
- Quick and easy set up — less than 10 minutes for most stores
- Extremely low ongoing maintenance
4 Common Ecommerce Sales Funnel Mistakes & How to Avoid Them
Hundreds of things could go wrong with your sales funnel. No article could possibly cover them all. Besides, there’s no such thing as a 100% perfect funnel. However, we can cover some common mistakes we see over and over.
MISTAKE #1: Poor copywriting
Weak copywriting affects all stages of your funnel. Cookie-cutter CTAs, yawn-worthy headlines and weak value propositions drive customers straight into your competitors’ arms.
Make sure your visitors’ first time isn’t their last time. Learning a few copywriting basics (or hiring a good copywriter) can make a huge difference to your bottom line.
3 Quick n’ Dirty Copy Tips
✔️ Write like you speak (try to avoid jargon and adverbs), and keep it at about a Gr. 6–7 level
✔️ Stick with simple product benefits; avoid focusing on complicated features
✔️ Use curiosity-inducing headlines and include strong call-to-actions
MISTAKE #2: Not tracking the right data (or getting enough of it)
Sometimes you have too much data. Sometimes, not enough. Make sure you’re taking advantage of your analytics and measuring the right KPIs (see below). While it’s nice to have so many martech solutions available, make sure you don’t end up getting analysis paralysis.
Funnel optimization is an ongoing process. You will need to invest in ads to drive traffic to your store, which will give you the data you need. Before making huge business decisions, make sure your data is statistically significant.
You’ll never reach a point in your business when you say, “Yep, I’ve optimized enough.” Get comfortable with testing and making constant improvements to your business. This means accepting failure as part of that process and adopting a growth mindset.
Keep track of your mistakes. Learn from them. Do teardowns to figure out which areas of your funnel are really moving the needle and which ones aren’t.
Which Tests Do I Run First?
Rank your tests based on:
- Impact — what kind of impact will this make on your biz?
- Complexity — how complicated is it to run this test?
- Confidence — how confident are you that this will work?
Aim for low-hanging fruit first. Prioritize tests that you believe will be impactful, simple and likely to succeed.
MISTAKE #3: Overcomplicating your funnel
If you’re dizzy just looking at your funnel, it might be time to trim it down. Bloated funnels with way too many steps will distract and confuse your potential customers. And when you confuse, you lose.
Try this instead: conduct a few user tests to figure out potential sources of friction in your funnel. Remove that friction and more customers will glide into checkout.
Potential Sources of Funnel Friction
- Poor product-market fit
- Not enough lead nurture/personalized experience
- Poor UX design
- Too many choices/CTAs
- Slow loading speed
- Overcomplicated forms
MISTAKE #4: Not following up (at all, or enough)
Many visitors won’t convert right away, especially if they’ve never heard of your brand. Don’t let them slip through the cracks. By following up on those leads, nurturing them and building that rapport, you’ll warm them up to your offer.
Don’t forget to follow up with existing customers, too. Customer retention is just as important as customer acquisition. By growing your relationship with existing customers, you’re opening the door to repeat sales and referrals. Ongoing conversations with your customers also ensures you create the best product possible for them.
Most of all, remember: you want to build a long-term relationship, not have a one-and-done fling.
5 Ways to Convert More New and Existing Customers
- Deliver faster customer support (or even live chat!)
- Send out limited time coupons
- Send out abandoned cart emails
- Add more trust signals (security badges, SSL, payment option logos)
- Adopt a better return policy or guarantee to overcome potential objections
The ESSENTIAL Conversion KPIs You NEED to Track
Every business tracks key performance indicators (KPIs). KPIs are a quantifiable measure of performance. It helps stakeholders evaluate how effectively the company is achieving certain business goals.
Chances are, the bigger your business, the more KPIs you need to track. Your team might have annual, quarterly, monthly, weekly, even daily KPIs and targets.
But not all KPIs are created equal. It can be overwhelming for new (and sometimes even experienced) ecommerce marketers to zero in on which conversion KPIs they *really* need to track. We’ve made it simple for you and put together a short list of essential, needle-moving KPIs.
- Number of Orders
The first one is a no-brainer. Orders = revenue. Every online business in the world needs to track how much money they make and how many transactions it took to generate that revenue. Orders are the lifeblood of your ecommerce business.
- Conversion Rate (CR)
This is another biggie. A conversion is anytime someone takes a certain action, whether it’s clicking the buy button or signing up for your newsletter.
Most companies track several different conversion rates and evaluate how they change over time. The most common conversion rate to watch out for is your store conversion rate.
For example: Your store got 7500 visitors last month and 570 sales. The conversion rate would be 57/7500, a.k.a. 7.6% (which is really high!)
DID YOU KNOW? The average ecommerce store has a 1–2% conversion rate.
- Cost Per Acquisition (CPA)
CPA measures how much money you spent to acquire a new customer during a specific campaign or on a specific marketing channel.
Marketers will measure CPA on paid marketing channels such as:
- PPC
- Google Display Ads
- Social media ads (Facebook, Instagram, YouTube, Pinterest)
- Affiliate/Influencer marketing campaigns
You can track CPA by using a combination of custom links, CRM data, customer surveys and reviewing your ad management dashboards.
- Average Order Value (AOV)
As the name suggests, AOV tracks the average total of every order your store receives across a given timeframe.
AOV can help you determine shopping trends in your store. This can guide future marketing promotions. For example, you may notice a lot of customers buying multiple items in the same category. This could lead to the creation of a new bundle offer. Stackable increases AOV by incentivizing shoppers to buy more to reach discount offer thresholds.
- Customer Churn Rate
Churn rate measures how many customers leave your business over a specific time period. Reducing churn rates, especially for subscription-based businesses, is the key to long-term profitability. Industry standards suggest your churn rate should be less than 5%.
- ROAS and ROI
Another critical KPI all ecommerce stores track is ROI (and often, ROAS). This financial metric shows how much profit (or loss) was generated by a specific marketing action.
Similar to ROI, ROAS measures return on ad spend. This is typically measured per ad campaign and is calculated by dividing revenue generated by ad spend.
- Add-to-Cart & Cart Abandonment Rates
As the names suggest, add to cart and cart abandonment rates track visitor activity at the bottom of the sales funnel.
Most ecommerce stores will try to entice visitors to buy by offering upsells and discounts. Stackable is a Shopify app that allows visitors to simultaneously clip multiple coupons. This increases AOV and add-to-cart rates.
Conclusion
Building, testing and optimizing sales funnels is a never-ending journey. This article covered the stages of a typical ecommerce sales funnel and some common mistakes. We discussed the importance of CRO and recommended some apps to help you improve your store’s conversion rates. Lastly, we covered key metrics you should track and how to calculate those KPIs.
But all this information is just…information. Now it’s up to you to put your new knowledge to the test. We hope this article was informative and helpful!
Drop us a line via email or comment below — we’d love to hear about your ecommerce journey so far.
Cheers,
Stackable Team
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