The Anatomy of a Profitable eCommerce Sales Funnel for Small Businesses

Looking for ways to grow your eCommerce sales, but don’t know where to start? In this article, we are giving a helicopter view of what your sales strategy and eCommerce sales funnel should look like. Here, you will learn how you can benefit from building an effective funnel, how eCommerce funnels are different, and what you should do to make it generate more profit for your eCommerce store. Let’s start!

What is an eCommerce sales funnel?

You should understand an eCommerce sales funnel as a certain representation of your customer journey, a route customers take from learning about your product to finishing a purchase on your website.

Every eCommerce business is unique and so are their sales funnels. Companies selling cheaper products can expect much lower friction when it comes to sales. Customers spend less time making up their minds about a $20-dollar purchase compared to a $2000-dolar one. That is why if you are selling cheaper products, your sales funnel is rather very short.

However, it doesn’t matter if you represent a business selling cheap souvenirs online or a premium brand selling designer bags – the logic of a sales funnel stays the same. 

Why do you need a sales funnel for your store?

By learning what makes each stage of a sales funnel and creating a strategy for yours,  can help acquire more new customers and retain current ones better. By understanding your customers, their problems, and their objections better, you can think of what you need to do to get more customers to land on your website and go through your checkout process successfully.

Here are the main reasons why you have to consider learning more about your sales funnel and working on improving it:

• understand your customer behaviour better and tailor a better sales strategy
• drive more high quality traffic to the website
• break your customers’ objections about your company and products
• build more trust with website visitors
• retain customers better with upsell and cross-sell strategy

While you already have some sales funnel in place, by understanding its weak points, you can work on improving your conversion. The eCommerce funnel is similar to the stage of a sales pipeline – there are many more customers who enter the funnel or a pipeline and a much smaller number of them end up at its bottom. In most cases, eCommerce funnels don’t require the engagement of a sales team, with small exceptions for B2B eCommerce where a consultation with a sales agent is crucial for making the right buying decision. In those cases, the transactions are much higher compared to a typical B2C eCommerce store. 

For now, let’s focus on B2C eCommerce funnels where sales usually happen without your or your team’s engagement. Here is a simplified representation of how customers move down the sales funnel. Those are the steps you have to track and measure to understand how your funnel performs – total session, sessions with product page views, sessions with add-to-cart, sessions with transactions.

You can find straightforward applications from the analysis of your sales funnel;. For example, if you find out that you don’t drive enough traffic to your website, but have a relatively good website conversion, you can think of exploring new channels, so you can drive more potential customers to your store.

It can also be the case for your business that the traffic you drive to the website is low-quality and doesn’t convert at a good rate. In such a case, reconsider your acquisition channels.

The stages of an eCommerce funnel

There are four main stages of a sales funnel – awareness, consideration, purchase, and retention. If you want to refer to the graph we mentioned above in this article, an awareness stage is all about driving traffic to your website – potential customers who learn about your products. 

Then, at the consideration stage people start checking your products in more detail by visiting product pages; at the purchase stage, customers go through your checkout process by adding products to their carts. And the last one – the retention stage, is what happens when customers have bought something from you and how you get them to buy again.

1. Awareness stage

The awareness stage of a sales funnel is all about educating your future customers and driving their interest. There are various tools that can bring more traffic (and new potential customers) to your website. For the businesses that are just starting selling online, nailing this element of the sales funnel is essential to landing first sales. 

Here are just a few tactics you can consider implementing at the awareness stage: 

• Target new audiences on Facebook (cold traffic) – target your ideal customers by selecting demographics and interests criteria when creating a Facebook ad. You can drive your audience to a website store and if they don’t end up buying from you, use retargeting.
• Use retargeting ads – retarget website visitors who haven’t purchased from you yet. It’s not only about showing your products and giving a call-to-action to buy. You should also educate your potential buyers with blog posts, videos demonstrating your products in action, or even tutorials. You can also retarget with ads that offer coupons or discounts like in the example below.

• Use lookalike audiences – it’s a smart way to reach new potential customers who are very similar to your current customers. Facebook matches the profile of your customer and looks for users that are similar to the clients.
• Google display ads – get your display ads to appear on the websites where your ideal customer spends time.

Also, remember that you don’t have to rely exclusively on paid traffic. You can always diversify by using organic channels.

• Create blog posts – answer the most frequently asked questions your customers usually ask before buying, help them learn more about the topic, so they start comparing different options. Remember that writing a successful blog related to your product offering is also beneficial for SEO. By publishing optimized articles online, you can rank on more keywords and attract more organic traffic to your website. It’s just one of many SEO advantages your eCommerce brand can experience with blogging.

• Work with affiliates Cooperate with other websites in your niche that have blogs closely related to your business topics. As they drive a considerable amount of traffic to their articles and pages, their owners usually search for some cooperation with eCommerce stores to earn on affiliate fees. By placing tracking links in their articles, they encourage readers to buy their partners’ products. Consider making a list of good blogs in your niche and reach out with an offer.

2. Consideration stage

At this stage, it’s worth using an element of social proof – customer testimonials both text and video, awards your company has gained, and other trust signals. 

Here is a good example of how you can implement the mechanism of social proof. At the bottom of the page, this company is using a transaction popup mentioning some recent purchases from a customer.

Remember that at this stage, people are not looking to learn about a problem they face, but about a solution. As they are comparing different options, you have to use different techniques to convince them that your offer is the best. 

Product pages are the place where people spend the most time when considering different options. That’s why you have to leverage them to establish trust with your potential buyers, break their objections, and, finally, get them to go through the checkout process. 

Optimize your product pages, use high-quality images and photos, add unique product descriptions – this is the bare minimum you should implement. 

3. Purchase stage

The purchase stage in a sales funnel is all about your checkout experience. To get more customers to move to the order confirmation page, start with evaluating your checkout process. Focus on removing friction at each stage.

There are tactics that can help build more trust and reduce friction to buy – you could offer free shipping, mention about money-back guarantee, or offer a free return. 

Also, it’s important to eradicate all signals that could annoy customers – additional or hidden charges (such as packaging fee or transaction fees) or asking for too many details (such as date of birth) in the registration form. 

It’s worth reading more tech tips related to improving your website performance and running usability tests with your customers to identify any bugs in your store and keep working on improving the user experience.

At this stage, you should also work on reducing cart abandonment. There will always be people who end up dropping their cart and they do it for many reasons. To regain such customers, consider implementing an email flow with a coupon code or another incentive to convince buyers to buy again. 

4. Retention stage

Most businesses would focus on getting more customers, optimizing their product pages, and investing thousands of dollars in paid ads to drive more traffic. However, you shouldn’t forget about another side of the equation when it comes to growing your eCommerce business which is retaining existing customers. It’s much cheaper to retain a customer than to get a new one. 

That’s why your sales funnel should also account for various strategies that could get clients to buy from you again. Let’s see some of the most common ideas for bringing your customers back to your store. 

• Using cross sells and upsells – sell complementary products to what your customers have already purchased. Send targeted newsletters containing product suggestions that would go well with your customers’ previous purchases.
• Use smart product recommendations for returning customers – when your customers come back to your website again (e.g. to check their order status), show the products that are similar to those that your customers have purchased and fit well to their style.
• Apply loyalty programs – give an incentive to buy more. Get customers to join your loyalty program by offering some incentive such as a coupon for the next purchase. Then, introduce some gamification element into your loyalty program – offer higher discounts to those who shop more.
• Implement a referral program – get your customers to recommend your store to their friends. Reward for referring by offering a coupon to a customer and their friend for their next purchase.
• Create separate sales campaigns – for example, you can boost holiday sales among your existing clients by sending a targeted email campaign related to some holiday such as Christmas or Easter. Holidays are a good reason (and justification) to buy!

Wrap up

By visualizing your sales funnel, you can better understand your customers’ profile, their behavior, and expectations; you can also see the weak points of your checkout process and customer acquisition strategies. When working on your eCommerce funnel, don’t think only about getting more customers, but also about retaining the existing ones.