The Sales Funnel
I have succeeded in finding a suitable location for my bakery, where there is a high footfall of lunchtime traffic. To understand my sales funnel, I would be interested in three things.
1. How many people walk past my store
2. How many people come into my store
3. How many eventually make a purchase
Let’s say that 100 people walk past my store on a given day, and 50 of them come in to have a look around, and 25 of those make a purchase. I then know the conversion rate from those that see the store to visiting the store, from those that visit the store to make a purchase, and most importantly, the conversion rate from those that see the store to those that make a purchase.
Your online marketing should work in a very similar way. You can think of people that see a link to your website, as comparable to those that walk past ‘Dave’s Doughnuts’. Those that click on a link to visit your site compare to those that visit the store, and those that contact you after visiting your site as those that purchase a doughnut.
If I want to improve sales for my bakery, I can therefore think of strategies that allow more people to pass through that funnel. How can I get more people to visit my store, and what can I do to encourage those that visit to make a purchase?
Conversion Rate Optimisation
At every stage of the sales funnel, a potential customer will be lost, hence the term, ‘leaky funnel’. The sales funnel on your website will be more sophisticated than the bakery example, and should be defined using your website’s goals as a guide. More on this in the next chapter. If your website’s primary purpose is to drive engagements, then every aspect of your website should be encouraging potential customers through the sales funnel. Understanding which part of your sales funnel is ‘leaky’ would be an excellent start to increasing engagements. Improving the passage through the sales funnel is known as Conversion Rate Optimisation, or CRO. This term describes the methods to help optimise your site to improve the conversion rate through the sales funnel. The next chapter in the ‘why your online marketing strategy is failing’ series will focus on the tools used to analyse your sales funnel.