Skip to content
All posts

Ecommerce Conversion Funnel: How To Create And Optimize To Increase Your Revenue

When it comes to eCommerce, one of the most important things is ensuring you have a conversion funnel that works. You can spend all the time creating a fantastic product or service. Still, if you don't have any way of converting those visitors into customers, it's all for nothing.

An eCommerce conversion funnel is simply a way to measure and track the progress of your website's visitors through the sales process. It allows you to see where people drop off, so you can find ways to improve conversion rates. So it's essential to understand how your sales funnel works and how to optimize it for maximum profits.

In this article, we will go over everything you need to know about eCommerce conversion funnels, including:

Let’s get started.

What is an Ecommerce Conversion Funnel?

What is an Ecommerce Conversion Funnel?

A conversion funnel is a sales process between visitors to your website and the sale. It shows how many people enter the funnel, how many drop off at each step, and what percentage of customers make it to the end.

The eCommerce conversion funnel is slightly different from other funnels because it consists of several steps instead of just two (as seen in sales funnels). But it still has the same basic concept. You have visitors to your website, some of those visitors become leads (people who are interested in buying), and the best leads turn into sales.

The goal of a conversion funnel is to convert as many visitors into customers as possible. This is accomplished with analytics software, such as Google Analytics, to track how people interact with your site's pages.

Why Is It Important To Create an Ecommerce Conversion Funnel?

The answer is simple: It's the key to making more money. The more customers you can convert, your business will generate revenue. But it's not just about increasing sales—it's also about ensuring every sale is as profitable as possible.

Businesses often focus on chasing new sales while ignoring their existing customers. This means they lose out on repeat purchases, a key source of recurring revenue. 

But a conversion funnel can help you fix this problem by ensuring that you’re always focused on improving the experience for your existing customers rather than chasing new ones.

The eCommerce conversion funnel allows you to track every stage of the customer journey, from when they land on your site to when they make a purchase. This means you can see where customers drop off in their journey—and work out how to eliminate these bottlenecks.

5 Benefits of setting up a conversion funnel for your e-commerce business

Benefits of setting up a conversion funnel for your e-commerce business

Setting up a conversion funnel for your online store has many benefits. However, Here are five top ones:

1. Optimize Customers' Journey

You can track every stage of the customer journey, from when they land on your site to when they make a purchase. This means you can see where customers drop off in their journey—and work out how to eliminate these bottlenecks.

2. Stay Over The Competition

The eCommerce conversion funnel allows you to measure your ROI and benchmark against industry averages. This will help you identify what channels drive the most sales and where there's room for improvement.

3. Improve Your Customer Experience

The funnel will show you where customers are dropping off in their journey, so you can improve the site and increase conversions. For example, suppose a large percentage of visitors leave before checking out. In that case, there's probably something wrong with your product pages or checkout process.

Discover 10 Tips To Boost Your E-commerce Customer Experience

4. Find Out What Motivates Your Customers

The eCommerce conversion funnel allows you to see which actions on your site lead to sales. You can then use this insight to tailor the content and design of your website so it's easier for customers to find what they want.

5. Reduce Cart Abandonment

It helps to reduce cart abandonment rate by tracking how far a customer is through their buying journey, you can identify where they drop off when shopping online—and make changes accordingly.

The Four Stages of the Ecommerce Conversion Funnel

The Four Stages of the Ecommerce Conversion Funnel

To define and design an optimized eCommerce conversion funnel, you need to understand what goes into one and how to put it together. There are four main parts of the e-commerce conversion funnel:

Stage 1: Customer Acquisition (Attract)

The e-commerce conversion funnel's first part is attracting new customers. This is where you spend most of your marketing dollars and time. You need to find ways to get potential customers to visit your website, sign up for an account, and make a purchase. 

Getting people from their search engine results page or social media feed into your site is one giant step toward making money from them. There are many ways to do this, like paid ads on social media sites like Facebook and Instagram, pay-per-click (PPC) ads on Google and Bing, and organic search engine optimization (SEO). 

Once someone lands on your website for the first time, they need to be interested in what you have to offer.

Stage 2: Customer Activation (Capture)

Once you have someone’s attention, they need to take action. This is called customer activation, and it is the second stage of the buyer journey. This is where you teach your customers how to use your product or service so that they can see results for themselves. 

At this stage, you're trying to convince people to take a specific action, like signing up for your email list or purchasing your product. You can use strategies like lead magnets, content upgrades, and free trials to get people on board with your offer. 

Once they've opted in (or committed) by giving their name and email address or signing up for a free trial, they show interest in what you have. It takes time for new customers to become loyal, so this step is crucial if you want them to return again and again.

Stage 3: Customer Retention (Nurture)

Customer retention is the third stage of the customer lifecycle. This is where you focus on keeping your existing customers happy, so they stay with you and continue to purchase from you over time. 

Once you’ve got people on board, it’s time to keep them as customers. You can do this by providing them with value, whether that means educating them or solving a problem they have. This way, they won’t feel like they were tricked into signing up and will continue to use your product or service. You can also use tactics like email automation (like welcome series emails) and lifecycle emails to keep in touch with customers over time.

In addition, customer retention strategies can upsell or cross-sell your products. This means you'll offer customers an additional product or service at the same time as their initial purchase. 

For example, if someone buys a book from you, you might suggest that they download an audio version of it, too (this is called upselling). You could also cross-sell by offering related products to existing ones.

Stage 4: Customer Advocacy (Convert)

The final stage is customer advocacy. Your customers start spreading the word about your brand through word of mouth or online reviews. Customers are willing to recommend your brand or products to their friends, family, and colleagues.

You can foster this by using loyalty programs and gamification strategies. For example, you could reward loyal customers with points or badges they can use towards future purchases (this is called gamification).

You can also encourage customer advocacy by offering special promotions for people who share their opinions about your products and services.

How To Create and Optimize Ecommerce Conversion Funnel?

eCommerce conversion

Step 1: Establish a Buyer Persona

The first step to creating an optimized eCommerce conversion funnel is establishing a buyer persona. A buyer persona is a fictional representation of your ideal customer.

You can create one by writing down the demographics and psychographics of your ideal customer, including where they live, their age range, and gender. Then, write down some specific details about them, such as their job title, what they like to do in their spare time and what challenges they face in their lives.

Answer the following question to create your buyers persona:

  • What is your target audience’s age?
  • What is their gender?
  • Where do they live?
  • Which social platforms do they use most often?
  • How much money do they make per year?

Step 2: Define The Conversion Funnel

Once you know your buyer persona, it's time to define the funnel. Your conversion funnel is a series of steps your customers take from when they first become aware of your brand to when they make a purchase decision. In other words, it's how people move through the sales process with you.

You can define your conversion funnel by creating a list of different steps in your sales process. For example, if you are selling a swimsuit, then this could be broken down into the following steps: 

  • Email subscribers click on an ad or landing page that leads them to a sales page.
  • Customers enter their email addresses, name, and phone number to receive a free swimsuit pattern.
  • Customers receive their free pattern in the mail and decide if they want to purchase any other designs.
  • Customers purchase their first pattern and receive it in the mail.
  • Customers purchase different swimsuit patterns.
  • Customers recommend your brand to their friends and family.

Step 3: Optimize your website's landing pages.

Landing page

Your website's landing pages need to be optimized for conversions. This means they should be clear and concise and direct the visitor towards a specific action (like signing up for your email newsletter).

For example, if you have a web page where customers can purchase items from your store, then make sure that page has no unnecessary distractions and is easy to navigate. This will help drive more sales and increase your conversion rate as well.

Here are other ways to optimize your eCommerce landing page:

  • Ensure your landing page has an easily readable call-to-action button using words like “Download Now” or “Sign Up Here”.
  • Include social proof like testimonials and reviews on your sales pages.
  • A call-to-action (CTA) button (e.g., "Buy Now") that is easily visible and clickable on every page of your website.
  • An honest description of what customers can expect if they purchase from you (e.g., a detailed product description).

Step 4: Create a lead magnet and optimize for conversions

A lead magnet is a piece of content you offer to your visitors in exchange for their email addresses. This will help you build your email list, which can then be used to send out new product launches, sales promotions, and other offers. 

To create a lead magnet, simply write an article relevant to your business and optimize it for conversions using the tips mentioned above. 

The goal is to get your visitors interested enough in your product or service so that they want to learn more about it and eventually purchase it from you.

Step 5: Use different channels to drive traffic to your website

eCommerce Social Selling 

Once you’ve optimized your website and created a lead magnet, it’s time to get traffic flowing. You can use several different channels to promote your content and drive leads:

Social media: Use platforms like Facebook and Twitter to promote your new content. Offer a discount code or free shipping on orders over $50 for any customers who share your post. Also, consider running an ad campaign on Facebook using their audience targeting feature.

Email: Email Marketing is one of the best ways to get traffic to your website. You can use it as a lead generation tool by sending an email to your list of subscribers. Offering a discount code or free shipping on orders over $50 for any customers who share your post.

Influencer marketing: Influencers are people with a large following on social media and blogs. They have an audience that trusts them and actively seeks out their advice.

Paid advertising: Paid advertising is another great way to drive traffic to your site. Consider running ads on Google AdWords (formerly known as Google Adwords) or Facebook's advertising platform.

Blogging: Write a blog post about your product and include a link to your sales page. You can also write an article about the benefits of using your product, which will help increase traffic to your site.

A strategy incorporating these different marketing channels can be overwhelming. Still, with automation like the one provided by ConvertedIn, it is possible to use them all with just one click. Convertedin will help you effortlessly and intelligently automate your marketing across multiple platforms—Facebook, Google, Instagram, Snapchat, and more. With just a few clicks of the mouse (or taps on a smartphone), you can advertise everywhere while also knowing what to target based on customer data. 

Step 6: Retarget leads who abandon the shopping cart

Retargeting is another powerful way to increase your sales. It's a strategy that involves serving ads to people who have visited your site but haven't made a purchase yet. A technique that can be especially effective if you use it in tandem with other marketing tactics mentioned above. 

Retargeting allows you to reach consumers who are already interested in what you offer but, for whatever reason, didn’t make a purchase on their first visit. Here are some e-commerce retargeting strategy s to consider:

  • Use a retargeting pixel on your site and social media pages.
  • Create an email marketing campaign that targets people who haven’t made a purchase yet.
  • Create remarketing lists so you can easily target users who have visited specific pages on your site and send them relevant ads at later dates.
  • Create a custom audience based on the people who visit your website but don’t make a purchase. This can help you target them with ads when they browse other websites that use Google Ads or similar services.
  • Use dynamic creative to display different products or offers to additional consumers who see your retargeting ads. For example, if someone sees an ad for one of your products but doesn't buy it, you could serve an ad that shows another option from the same category (like a similar shoe style).

Step 7: Measure the results of your eCommerce conversion funnel

With a goal in mind, it’s time to measure the results of your eCommerce conversion funnel. Google Analytics and other analytics tools can help you determine which actions people took after seeing your retargeting ads (such as signing into their account or making a purchase). 

You can also use tools like heatmaps and click maps to see how often visitors interact with specific parts of your website. This data can help you better understand what your visitors want and how they interact with your site. The more detailed your targeting, the more likely people will interact with your ads. 

If you’re seeing a lot of clicks but no conversions, try adjusting your campaigns or retargeting audiences.

How To Measure The Performance Of Your Ecommerce Conversion Funnel


The best way to measure the performance of your eCommerce conversion funnel is by tracking the e-commerce conversion funnel metrics. There are three primary metrics:

1. Top of the Conversion Funnel Metrics - Customer Acquisition Metrics

Customer Acquisition metrics are the metrics that measure how many visitors you're getting to your site and how many of them actually become customers. The most famous customer acquisition metric is revenue per visitor (RPV) because it's a good indicator of whether or not your marketing efforts are successful. If you want to improve your RPV, focus on the top of the conversion funnel metrics like:

  • Number of visitors to your site
  • Impressions
  • Average time on page
  • Bounce rate
  • Average order value per visitor (AOV)
  • Revenue per visitor (RPV)
  • Conversion rate from visitors to customers
2. Middle of the Conversion Funnel Metrics - Customer Activation Metrics

The middle of the conversion funnel metrics focuses on customer activation. You can use them to see how well your website is converting visitors into leads and those leads into customers.

These metrics include:

  • Number of free trial signups or conversions from free trial
  • Number of paid accounts created via the free trial
  • The average revenue per customer (ARPC)
  • Subscribers to your email list (a lead magnet can help here)
  • The number of leads from organic search paid ads/social media/etc.
  • Lead quality (how many of them become customers?)

The middle of the funnel metrics is focused on how many people are becoming customers. The goal is to increase these metrics as much as possible because they indicate that your business has a strong customer acquisition strategy. 

3. Bottom of the Conversion Funnel Metrics - Customer Retention and Advocacy Metrics 

Customer Retention

The bottom-of-the-funnel metrics are focused on customer retention and advocacy. The goal is to increase these metrics as much as possible because they indicate that your business has a strong customer retention strategy. 

Here are the bottom-of-funnel metrics to track as e-commerce: 

  • Customer Retention Rate (CRR): The percentage of customers who stay with your product or service for at least one year or until their next renewal date. 
  • Customer Lifetime Value (CLV): The sum of all revenue from an individual customer throughout their relationship with your company. 
  • Customer Acquisition Cost (CAC): The sum of all expenses involved in getting a customer to purchase your product or service. 
  • Net Promoter Score (NPS): A measure of customer loyalty, calculated by asking customers, "How likely are you to recommend this product/service to a friend or colleague?" on a scale from 0-10, with 10 being very likely and 0 being not at all possible.

5 Tips To Improve Your E-Commerce Conversion Journey

customer Journey

Using these steps will help you create a better conversion for your online store:

1- Effective home page

Your home page is the first thing your customers see when visiting your website. It should grab their attention so they don't leave immediately. For an e-commerce site, try using a video or slideshow on your homepage to show off some of the best features and benefits of your products/services. You can also include testimonials from previous customers who were happy with what they received from you.

2- Clear Category Pages

Your category pages should be designed in such a way that they are easy to navigate through. You can use drop-down menus, filters, and search boxes to make it easier for customers to find the products they're looking for.

3- Detailed Product Pages

Your product pages should contain all the information a customer needs before making a purchase. This includes the price, size, color options, and other vital details like material composition and returns policies.

4- Effective Search Result Pages

Your search result pages should display relevant products most likely to satisfy the customer's search query. You can use filters, sorting options, and drop-down menus to make it easier for customers to find what they need.

5- Easy Checkout Process

Your checkout process should be as straightforward as possible so that customers don't encounter difficulties completing their purchases. Optimize your checkout process by using a single-page checkout, pre-filled forms during the checkout process, and providing customer support via live chat or telephone line.

Final Thought

Your conversion funnel should be a living, breathing strategy that continually evolves. Whether you're using a top-of-the-funnel approach or a bottom-of-the-funnel campaign, you must frequently test and iterate to understand better. However, you aren't doomed to failure if you fail to implement everything at once. Instead, start with one metric and one campaign on one landing page and then adjust from there.

There are a lot of steps that go into creating an eCommerce conversion funnel. However, take the time to develop and optimize your conversion funnel. You'll be on your way to maximizing revenue. Revenue isn't everything in an eCommerce business, but it ranks pretty high in importance, so take the time to run through this guide and see what you can come up with.

Remember to use the AI platforms, ConvertedIn for your eCommerce marketing automation. It saves time and improves your conversion funnel results. You can try a demo here.