Conversion funnels are a fundamental concept in sales. Personally, I like to think of the funnel as the big, scary slide that you wanted to try out as a kid. You saw your friends hurtling down, which got you interested. You saw how much fun you had researching. And then the benefits of the fun outweighed your fear, so you went up and down.
Customers take a similar journey down your company’s conversion funnel when considering whether or not to buy from you. You need to pique their interest, build trust, and encourage them to act.
While the customer journey is more complex than my slide analogy, understanding how conversion funnels work can improve that process. It can help you streamline your funnel, attract more leads, convert them into customers, and increase your bottom line. However, all of this requires the least possible friction. (Think: slipping with slippery clothes instead of bare skin).
In this post, I’ll explain what conversion funnels are and how they affect your customer journey. Then, we’ll see how to tweak your funnel to increase the number of people who make it to your conversion point below.
What is a Conversion Funnel?
A conversion funnel is a path that potential customers walk before taking any desired action (i.e. converting). As a seller, you guide people through the business to convert them from potential buyers to customers.
All lines start at the top of the funnel. As they learn more about your business, they move down and approach buying your product or service. This conversion process is known as a funnel because companies often have more leads than customers, making the top of the funnel more crowded than the bottom.
To be an effective marketer or seller, understanding how people flow down your conversion funnel is important as this will help you generate leads, answer questions about your business, and allay concerns. You can also organize leads into categories and create customer touchpoints that can entice any group to convert.
That’s why every funnel should be designed around how your customers buy, not how you sell. The focus is on delivering such a great experience on the customer journey that you will convince them to convert.
Before we dive into the details of analyzing and optimizing your funnel, we need to talk about an important aspect of this process: the customer journey.
The customer journey complements the conversion funnel, but is not the same. In contrast to the generalized linear conversion funnel, customer journey maps show the individual and cumbersome paths that people take from discovering your brand to the time of purchase.
For example, let’s say you’re a food blogger selling cookbooks. This is how your customers’ trips can differ.
- Customer A sees and clicks your banner ad, visits your blog, reads an article, signs up for your newsletter, receives a discount email, and buys a cookbook.
- Customer B sees your cookbook in a bookstore, buys it, makes the recipes, visits your blog, and subscribes to your newsletter.
The results for Client A and B are essentially the same, but the journeys and touchpoints are different. So knowing the different ways people get into your funnel can help you tweak these entry points. That way, you can meet potential buyers where they are and entice them to convert.
Most funnels, however, have similar points that ultimately lead to conversion. So let’s look at an example to get a picture of this process.
Conversion funnel visualization
The top-middle-bottom funnel is a classic model used by sales teams. It focuses on generating interest, educating potential customers, persuading them to buy, and building loyalty so that they will become repeat buyers.
HubSpot decided to view the customer journey less as a funnel than as a flywheel – and thus gain more momentum when customers move. Here is a comparison of a traditional hopper alongside an updated flywheel approach to the retrofit:
Do you need a more detailed explanation? Check out this video introduction to the flywheel below:
But let’s talk about traditional conversion funnels again:
- Top of the funnel (TOFU): This is the awareness phase. A prospect will enter the TOFU when they interact with your brand, often through your website, an ad, email, or social media.
- Middle of the funnel (MOFU): This is the viewing phase. The prospect knows your brand and is committed to finding out more. You can sign up for your email newsletter, follow you on social media, or download guides and templates.
- Bottom of the funnel (BOFU): This is the conversion phase. A prospect is here right before they buy, which means you’ve given them good information and relevant points of contact. Help them convert by making it easy to buy, offer a trial, outline prices, or send a discount on their abandoned cart.
While some conversion funnels are simple, others can be incredibly complex. The detail of your funnel depends on your sales process – the longer your sales cycle, the more complex your funnel is. When you have a short sales cycle, your funnel is usually easier.
Think how long it takes to sell $ 2,000 worth of B2B software versus a $ 20 T-shirt. Buying software typically requires months of sales pitches, marketing materials, frequently asked questions (FAQs), and demos. Each of these is a specific point in your conversion funnel. However, potential buyers may only need five minutes to find out if the t-shirt is the right color and fit before they buy it. The touch points required here take it off the rack and try it on.
To find out how complex your funnel is, you can look at the data and do some analysis. This allows you to rinse out every part of your customer journey to create a unique visual representation of your funnel.
Conversion funnel analysis
Funnels are full of barriers and friction. By analyzing your funnel, you can visualize the flow of potential customers across each point.
You can view key traffic sources and high exit pages to get a feel for how people are ending up at each stage of the funnel.
This also helps you spot barriers that are causing users to exit a page before converting. For example, if you see a high drop-off rate on a page, you need to prioritize it as you work on optimizing your funnel.
To understand your funnel and conduct an in-depth analysis, do the following:
1. Look for high-traffic sites with high drop-off and conversion rates.
High traffic pages contain a lot of useful information. Not only are these the sites that people see the most, but they are also the places where people choose to stay or leave. Take a look at the pages that people are relegating (aka “leaving”) and converting (taking your intended actions). Some metrics to collect are:
- Cost per Acquisition (CPA)
- Customer Lifetime Value (CLV)
- Drop-off rate
- Exchange rate
- Number of Marketing Qualified Leads (MMS)
- Conversion rate from MMS to customers
- Conversion rate per channel (i.e. social, email, and paid search)
2. Discover where your best customers come from.
Not all leads are created equal. Some people drop near the top of the funnel while others make it all the way to the bottom. That’s why it’s so important to pursue leads. Once you know where your high-quality leads are coming from, you can analyze that touchpoint or channel to see what you’re doing right. Ask yourself:
- How does this point of contact differ from other points of contact?
- What information resonates with people?
- What are the barriers or friction (if any)?
- How many steps do users have to take before they can convert?
Realizing what you’re doing right in your funnel is just as important as figuring out what you’re doing wrong. If you need help digging through the data, check out these sales funnel tools or check out the heat map and session recording tools for information on how users navigate your pages.
3. Create an optimization plan.
Now that you’ve figured out where people are dropping off and converting, it’s time to come up with an optimization plan. This should include the goals you want to focus on (i.e., more leads, newsletter signups, demos, or software purchases).
The goals let you determine what you want from each touch point in your funnel so you can measure whether it works or not.
After your funnel analysis, you will have a list of priority touchpoints that need tweaking. Make sure to focus on the areas with the highest dropout rates first.
Conversion funnel optimization
Every part of your conversion funnel can be tweaked to increase the number of people who turn into customers. Imagine optimizing the conversation funnel to find out what motivates, blocks, and convinces people so you can give them the best possible experience on their unique journey.
To optimize effectively, you need to think about how to give each customer what they want at every stage of the funnel. In the phases described above, here are some things to keep in mind at every step of the customer journey.
1. TOFU: awareness
Problems up in your funnel? See how you can get new leads. Compare each channel that attracts customers (i.e. social media, search engines, your blog, and paid ads) to see which one attracts the most people.
If you’re not sure how customers found you, send out a survey to ask. Look for trends in how people find new brands and put more effort into your best channels. Just make sure you attract the people in your target audience.
2. MOFU: Consideration
Potential customers made it to the center of your funnel, but it’s your job to move them down.
If you are having trouble with this stage, check out how people learn about your business and engage with your website. Is your website easy for people to navigate? Or are you signing up for your email list? Do you have relevant, rich content? Do you offer pricing and product information? Is it easy to answer questions?
Depending on your obstacles, consider the following suggestions for improvement:
- Product videos and photos
- FAQ page
- White papers, case studies or blog posts
- Filters and search options
- Newsletter acquisition
- Check the pages for loading speed and defective items
3. BOFU: conversion
This is the final stop for potential buyers to turn them into customers. You should remove as much friction as possible and encourage people to take the final steps to convert.
Some ways to optimize this last part of your funnel are to make sure the product or service pages are fully stocked with interesting descriptions, videos, and photos. Look at your checkout process to see if people are having issues with payments or abandoned carts. Make it easy for people to compare prices and clearly outline all product features. You can also send specific BOFU emails or create ads to remind users of their desire to convert.
Do you think once a customer converts, your job is done? Not correct. You might have pulled a customer through your conversion funnel, but there are numerous ways you can get them re-engaged. Not only is customer retention critical to growing your business, but it is five to 25 times more expensive to acquire a new customer than to retain a current customer.
Once they hit the funnel, invite your customers to sign up for a new series of webinars, download additional templates, send promotions, join a loyalty club, or follow you on social media.
Find out what makes sense for your particular sales cycle and use your existing content and channels to keep in touch. Make sure they appreciate your business and want to come back as you never know who they will be introducing up this funnel.