The typical conversion rate for ecommerce websites is just 2.63%.

Let that number really sink in.

A whopping 97.37% of visitors to your website are simply browsing. Considering the current expenses associated with attracting traffic, this average is quite disappointing.

However, you don’t have to settle for mediocrity.

By grasping the customer journey, you can enhance your digital marketing tactics and boost that conversion rate. In our experience, businesses often struggle to conceptualize the ecommerce sales funnel in a way that benefits both their customers and their bottom line. They view it as a straightforward process—a simple A to B—but dissecting it stage by stage proves far more effective. This post will demonstrate how understanding the typical customer journey can help you increase both your ecommerce sales funnel’s conversion rates and customer retention rates.

We have a lot to unpack, so let’s dive right in.

What Does an Ecommerce Sales Funnel Entail?

An ecommerce sales funnel visually represents the steps a person takes to transition from a potential customer to an actual customer, and further, to becoming a loyal, retained customer.

A customer might navigate the funnel in a flash (spotting a desirable item and buying it instantly), or it could take months or even years to finalize their decision to purchase.

Below is a basic illustration of an ecommerce sales funnel.

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It’s worth noting that funnel design can differ significantly across various marketers and industries. You might come across terms like conversion funnel, marketing funnel, or demand-generation funnel.

Despite their slight variations, the core principle remains consistent: visually representing the customer journey towards taking a specific, desired action.

The 5 Stages of an Ecommerce Sales Funnel

Breaking down a funnel into distinct stages is another helpful way to understand it. While some businesses opt for three or four stages, and others use six, we favor the five-stage ecommerce funnel. This model begins with cultivating brand awareness and culminates in customer retention.

1. The Awareness Stage: Customers at this stage are just becoming acquainted with your brand. They discover you through organic search results, paid advertisements, referrals, and other marketing strategies implemented at the top of the funnel.
2. The Consideration Stage: Mid-funnel customers have expressed interest in your offerings. However, what resonated with top-of-funnel customers won’t necessarily work here. You’ve captured their attention; now, you need to sustain it through elements like customer testimonials, compelling product descriptions, and more.
3. The Decision Stage: Customers at this juncture are evaluating their final options. It’s an opportune moment to showcase your exceptional customer service and leverage limited-time discounts to gently nudge them towards choosing your brand.
4. The Purchase Stage: This stage involves bottom-of-the-funnel customers who’ve either decided to make a purchase (in which case, your focus should be on providing a seamless checkout experience and encouraging account signup) or have chosen not to buy (in which case, you can concentrate on retargeting ads to draw them back into your sales funnel).
5. The Retention Stage: This stage involves customers who have moved beyond the funnel. You’ll employ tactics such as email sequences, customer accounts, and loyalty programs to entice these customers back for add-on purchases, upsells, and cross-sells. While stages one through four aim to guide the customer deeper into the funnel towards becoming a customer, the objective of stage five is to foster repeat business.

Now that we’ve established what an ecommerce sales funnel is and outlined its five stages, let’s delve into how to enhance each stage for optimal performance.

Optimizing the Awareness Stage of Your Ecommerce Sales Funnel

Crafting a strategy for the top of your ecommerce sales funnel can sometimes be overlooked (the direct correlation between ad expenditure and revenue is harder to discern this high up in the funnel, after all). However, the strategies you implement for top-of-funnel customers are paramount in cultivating your desired target audience.

The objective during the awareness stage is to attract the largest possible audience without losing sight of your ideal customer.

Here are three effective methods to achieve this:

1. Utilize Existing Customer Data to Construct Lookalike Audiences for Facebook Ad Campaigns

Facebook lookalike audiences help you identify potential customers who share striking similarities with your current customer base. It’s almost like taking your existing clientele and hitting the copy-and-paste button. While not exactly identical, it comes remarkably close.

A lookalike audience strategy allows you to expand your reach without compromising your focus.

To build a lookalike audience, you can utilize:

1. Customer Email Lists: Leverage the email addresses of customers who’ve subscribed to your communications or participated in your giveaways to create a custom audience.
2. Recently Converted Customers: It’s a no-brainer to use data from customers who’ve recently made a purchase. This way, you can extract the characteristics of those who converted and create a lookalike audience based on their attributes.
3. Users Who’ve Engaged with Your Content: This category could include potential customers who’ve liked your pages or watched your videos, indicating an interest in your brand.

These three methods are highly effective for setting up your lookalike audience for success, but there are other approaches as well (as detailed below).

Employing custom lookalike audiences is akin to kickstarting the process, ensuring that the top-of-the-funnel customers you curate are more likely to progress to stage two.

2. Fine-tune Your Google Shopping Feed with Product Groups and Negative Keywords

The key to optimizing your Google Shopping Feed lies in aligning your products with customer search queries.

This is how you achieve prominent results when you search “travel backpack” on Google:

Shopping campaigns are not driven by keywords. Instead, the effectiveness of your Shopping campaign hinges on the product groups you’ve established in your product data feed.

When you initiate a Google Shopping campaign, all the products within your product data feed are initially grouped together. Leaving it this way won’t yield a substantial return on ad spend (ROAS) because you’re essentially assigning the same bid to all your products.

However, not all your products are equal in value. Some boast higher profit margins or come with better conversion rates.

We recommend categorizing your products into distinct groups based on these three crucial metrics:

1. Price
2. Profit Margin
3. Conversion Rate

Strive for a “like with like” approach. The more closely you can group products with similar values across these three metrics, the better your results.

Integrating negative keywords into your Google Shopping campaigns should be a standard practice within your digital marketing strategy.

While product groups and product attributes are an excellent starting point for optimizing your Google Shopping campaigns, you mustn’t underestimate the power of negative keywords.

Negative keywords instruct Google on which keywords you don’t want to trigger your product’s appearance in search results.

Consider the function of Google Shopping Feed—it acts as a matchmaker between your backend product catalog and what the customer is actively searching for. You can leverage negative keywords to enhance the accuracy of this matching process, preventing your product from appearing for irrelevant searches.

To help you get started, we’ve developed a handy negative keyword tool.

3. Design a Referral Program That Aligns with Your Brand

There’s a common thread that runs through the tips shared so far:

1. Amplify your brand’s visibility.
2. Zero in on the right audience.

These two factors make referral programs an exceptional tool for optimizing the first stage of your ecommerce sales funnel. People typically don’t recommend products they don’t genuinely believe in. When you refer a friend to a product, it’s because you believe it will resonate with them.

In a well-known case study, Dropbox incentivized their existing user base to refer friends (offering additional storage as a reward) and witnessed a staggering 60% surge in signups within just 15 months.

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This approach proved incredibly successful due to its simplicity and unwavering focus on the brand. Dropbox cleverly incentivized referrals by offering something their existing users valued—more storage.

We’d argue that if Dropbox had attempted the same program but offered Amazon gift cards as an incentive instead of additional storage, it wouldn’t have achieved nearly the same level of success. By tapping into what their current users desired and providing a clear path to obtain it, they hit the nail on the head.

Ready to dive deeper into optimizing stage one of your ecommerce sales funnel? Explore our comprehensive article on ingenious methods to build brand awareness.

Enhancing the Consideration Stage of Your Ecommerce Sales Funnel

At this stage, the customer is carefully evaluating what you bring to the table.

We recommend concentrating on two key areas: cultivating user-generated reviews or content, and crafting product descriptions that highlight benefits.

1. Encourage User-Generated Content

There are three primary reasons why we advocate for user-generated content:

1. It empowers your existing customers to communicate directly with potential customers. While your company’s marketing team possesses in-depth product knowledge, your existing customer base can connect with potential customers on a more relatable level.
2. UGC showcases your product in real-life scenarios. Whether you’re selling apparel, a camera, or a service, UGC helps potential customers visualize your product in action.
3. It provides you with invaluable content that you can leverage across your marketing endeavors. Content creation can be both expensive and time-consuming, whether you’re a small business or a large enterprise. And even if you can afford a content marketing agency, finding writers who deeply understand your product can be challenging. UGC can effectively bridge this gap.

Here’s an example of a site actively soliciting UGC to support content creation:

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CaringBridge, a non-profit organization operating with a limited marketing budget, strategically capitalized on its emotionally resonant and distinctive user-generated stories. This approach enabled them to generate content that only they could, adding a truly unique touch.

We appreciate this example because it demonstrates a brand proactively seeking user-generated content instead of merely focusing on boosting online reviews and testimonials. They went the extra mile to gather stories and transformed those stories into meaningful and valuable content.

2. Craft Product Descriptions That Emphasize Benefits

86% of consumers regard product content as crucial when making purchasing decisions. However, in our experience, some brands (both new and established) become so fixated on branding that they inadvertently overdo it in the wrong places.

Don’t get us wrong, branding is essential, but it’s all about timing and placement. Product descriptions often don’t fall under the “branding” umbrella. The primary purpose of product descriptions is to illuminate the value proposition of your product for the customer. You can’t achieve this by solely focusing on features because customers don’t instantly connect with technical specifications. Instead, shift your focus to the benefits derived from those features.

For instance:

• A feature might be AI-powered machine learning integrated with QuickBooks. A benefit would be the convenience of accessing all your financial data from a single dashboard.
• A feature could be SuperCool™ Memory Foam. A benefit would be a restful night’s sleep.

If you’re excelling at attracting traffic to your ecommerce store but struggling to convert those visitors into paying customers, delve into our article on designing high-converting landing pages.

Optimizing the Decision Stage of Your Ecommerce Sales Funnel

We like to view this stage as the point where an informed customer weighs their final two or three choices. They’ve identified the brands that meet their needs and are meticulously listing the pros and cons of each.

It’s crucial to remember that opting out of a purchase is always on the table.

When it comes to tipping the scales in your favor, we suggest prioritizing exceptional customer service and implementing exit-intent popups.

1. Prioritize Excellent Customer Service

By this stage, your customer is familiar with your brand, has absorbed your benefit-oriented copy, and has been exposed to your ads. They possess a substantial understanding of your offerings. However, they might simply need a gentle nudge or have a lingering question that hasn’t been addressed on any accessible pages.

This is where stellar customer service comes into play.

Is Your Brand Easily Reachable? Brands can demonstrate their commitment to customer service by providing the following tools:

1. Live chat
2. Email
3. Comprehensive FAQ and help desk pages

These tools serve as a bridge between the customer’s existing knowledge and the information they need to finalize their purchase. For example, if a customer on your site has a specific query about lead times, a brief live chat session can provide an immediate answer, potentially moving them closer to completing their purchase.

Irrespective of your industry, having a clear and accessible channel for potential customers to contact your company and receive prompt, value-driven responses is essential.

2. Implement an Exit-Intent Strategy

As mentioned at the outset, more than 97% of your website visitors will leave without making a purchase.

An effective exit-intent strategy is built upon this statistic. The reality is that people will inevitably leave your page. Our recommendation is to leverage marketing techniques to engage them before they go.

This can be achieved with an exit popup that appears when a customer is about to abandon your page. Here’s an example from Skullcandy, a headphone ecommerce company:

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The overarching goal is to entice the user to stay on your site or to encourage them to return later.

The average conversion rate for exit popups is around 3.93%. That translates to capturing nearly 4% of the 97% of customers who would have otherwise left your brand behind.

To explore effective popup advertising strategies further, click here.

Some marketers consider this stage the end of the sales funnel. They believe that once a customer has decided whether to buy or not, the funnel concludes.

We disagree with this perspective as it doesn’t accurately reflect the customer experience—especially in the ecommerce realm. After a customer commits to buying, they still need to navigate the checkout process, which brings us to stage four: making the purchase.

Improving the Purchase Stage of Your Ecommerce Sales Funnel

In traditional brick-and-mortar selling, the prevailing wisdom once a customer decided to buy was to “stop selling and start ringing.” Inexperienced salespeople could inadvertently talk themselves out of a sale by overwhelming the prospect with unsolicited information.

While the dynamics of ecommerce marketing differ, there’s still merit in stepping aside once a customer is ready to make a purchase. To facilitate this, we advise creating a frictionless checkout experience.

1. Craft a Frictionless Checkout Experience

Friction can arise during the checkout process for a variety of reasons.

50% of customers abandon their carts because of unexpected costs (such as unanticipated shipping fees), while 21% leave due to an excessively long or complicated checkout process.

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Moreover, nearly a quarter of those who leave your site do so because of a cumbersome checkout experience. It’s like losing a game on a technicality.

Determining the optimal approach for your company to establish a truly frictionless checkout experience may require some effort, but here are some general guidelines to keep in mind:

1. Minimize Form Fields: Request only the information absolutely necessary for the current purchase. Asking for more than what’s needed can easily frustrate a customer or even cause them to run out of time while attempting to complete their purchase.
2. Eliminate Surprises After Checkout Begins: Any additional shipping costs, fees, or even lead times should be communicated to the customer before they start filling out form fields. Transparency is key.

Enhancing the Retention Stage of Your Ecommerce Sales Funnel

Based on our observations, undervaluing existing customers is a common oversight. Perhaps this stems from the marketing world’s intense focus on expanding brand awareness. Even marketers themselves are constantly bombarded with social media ads promoting new brands. Maybe we’re simply wired to prioritize “new” over “established.”

However, as your business expands, you’ll notice that a larger portion of your daily sales originates from existing or returning customers.

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To boost customer retention, we recommend the following strategies:

1. Encourage customers to create accounts.
2. Utilize email sequences to promote upsells, cross-sells, and add-ons.

1. Prompt Customers to Create Accounts

While it’s crucial to avoid unnecessarily slowing down the checkout process (which can increase cart abandonment rates), encouraging customers to create accounts on your site remains important.

Shopify suggests navigating this paradox by offering customers the option to create an account after they’ve placed their order.

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2. Integrate Upsells, Cross-sells, and Add-ons

The essence of effective email marketing lies in fostering ongoing dialogue between your company and your customer base. It’s a highly effective digital marketing strategy. In fact, close to 60% of marketers consider email marketing their most significant source of ROI.

We advocate using email marketing to present upsells, cross-sells, and add-ons.

Essentially, you’re reaching out to customers who have already demonstrated interest in your company and offering targeted recommendations based on their past purchase history.

You can email your customers for various reasons, but we believe it’s most effective when it’s relevant to their individual journey with your product. For example, sending a post-purchase email that suggests add-ons to the core product they bought is an excellent way to increase your average order value.

However, emails don’t need to be sent immediately after an order is placed to be impactful.

Here’s a compelling example from Asana:

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This email notification accomplishes the following:

1. It demonstrates that Asana understands your company and its specific needs.
2. It positions itself as having the solution to help you maintain peak operational efficiency.

Optimizing Your Entire Ecommerce Sales Funnel

Mapping your customer journey onto the ecommerce funnel provides a valuable framework for recalibrating your digital marketing strategies.

All too often, we encounter jarring transitions between efforts to build awareness and initiatives to increase consideration. This lack of cohesion within an ecommerce strategy can negatively impact your conversion rates. By designing marketing strategies with your sales funnel in mind, you can create a seamless customer journey that effectively guides potential customers not only into becoming paying customers, but also into loyal, returning customers.