A well-optimized ecommerce marketing funnel is the difference between a thriving ecommerce business, and a struggling one. Getting your funnel right can allow you to profit from the brand and differentiated products you’ve worked so hard to produce.
After growing a whopping 27% in 2020, the ecommerce industry is back to a still-impressive annual growth rate of around 16%.
Shoppers are looking for unique brands that match their style and their values.
Getting your funnel right is imperative, but when you read content about marketing funnels online, there are always plenty of B2B examples. Hubspot easily comes to mind. But this is ecommerce we’re talking about. The vast majority of ecommerce companies don’t need to create case studies or ebooks to sell their products.
In this article, we dive into ecommerce-only examples, metrics, and funnel templates.
An ecommerce marketing funnel will look different for every company based on their products, price points, target audience, and key marketing channels.
In any ecommerce funnel, there are four key stages:
At the top of the ecommerce funnel, marketers work on driving traffic and brand awareness.
In the middle of the ecommerce funnel, we want to capture email addresses and nurture leads. Customers are either already aware of the brand, or they’re aware that they have a need and are actively looking for a solution.
At the bottom of the ecommerce funnel, marketers work on boosting conversions via optimized checkout flows and save-the-cart emails and ads.
To conduct ecommerce funnel analysis, you’ll need to collect a variety of metrics, across multiple funnel stages, channels, and campaigns.
Here are some of the top metrics you can use to analyze and optimize your funnel:
You can track the total number of website sessions during a given time period in order to understand how much traffic entered the top of your website funnel.
When you divide your total traffic by the total sales in that time period, you’ll be able to calculate your total conversion rate for all products and pages across your website. The website conversion rate for the ecommerce industry hovers a little below 3%.
Which of your products gets the most traffic? When you track website sessions by individual product pages, you can find out which ones are the most popular and use this for campaign and product development inspiration.
It’s smart to understand how each of your products converts, so you can detect your highest and lowest converting products. You can use these insights to know which products to run ads to, which to use as inspiration for new products, and which to discontinue. Calculate this by dividing the product page traffic by sales for a certain time period. As for a benchmark, product pages convert at around 8%.
It’s crucial to know your average order value so that you know how much you can spend on marketing in order to break even or be profitable on a single order. A solid ecommerce marketing funnel should seek profitability on the first or second order, depending on the nature of the business and how likely repeat purchases are. The average order value can vary wildly depending on the type of products a company sells, so start by benchmarking your current AOV and work on improving it from there.
The customer lifetime value is usually measured by averaging how much customers spend over a period of 5 years. If your company is focused more on growth than profitability right now, you can use this data to increase your marketing spend. If your cost to acquire a customer is higher than your AOV but less than half your CLV, then you’ll still have a profitable business. You can prioritize growth and later work on lowering your marketing expenses. As with AOV, industry benchmarks aren’t nearly as useful as your own data. So benchmark your current CLV (using a period of 2 – 5 years) and continue to monitor it weekly.
After adding an item to their cart, how many of your customers will abandon the cart and not complete the checkout process? This metric is what’s considered a lever. By improving this metric, you can improve your overall conversion rate and the success of your entire marketing funnel. The ecommerce industry has a cart abandonment rate benchmark of 75%.
How well do your cart recovery emails and retargeting ads work? Your cart recovery rate measures how frequently abandoned checkouts are later completed (typically within a set period of time, such as 14 days). Just like the lever above, by recovering more carts, you can improve your conversion rates. Aim for an conversion rate of 18% from your cart recovery emails.
In order to increase the number of leads in the middle of your funnel, you need to get more email addresses. You should measure the conversion rate of your email opt-in pop-up and work on improving it so you can grow your email list. Expect an email opt-in conversion rate of 1.95% or higher.
You’ll also want to benchmark your typical conversion rates from your email blasts, and then measure each individual email against this benchmark. This rate is calculated by dividing your total number of email recipients by how many purchased because they opened and clicked on a link in that email. The conversion rate for the apparel and accessories subset of the ecommerce industry is 0.09%, with the winter holiday months boosting that to 0.12%.
It’s also important to measure the conversion rates of your educational content, such as your SEO blog posts. You can measure how well your content converts into email subscribers and how well it converts into paying customers. Blog posts can convert into email subscribers at a rate of 1.5% on average.
While there are other ways to catch your audience’s attention besides ecommerce discounts, coupon codes remain popular. When launching a new code, you should measure its redemption rate. You can reiterate and repurpose the discount structures of your best-performing codes for new campaigns. (And ditch the low performers.) Around 2.7% of coupons delivered via email (as opposed to print) are redeemed.
Use these marketing funnel templates to help you visualize your results and how much of your funnel is converting to each step.
You can make a similar graphic with a simple tool like Canva and add a visual element to your marketing reports. Just make the steps of the funnel wider or narrower based on your data to make sure they’re an accurate depiction of your results.
You might even use these funnel templates to create your own benchmarks and share them with your marketing team. Everyone can then gauge the success of various campaigns against these visual benchmarks.
Here’s a sample graphic for an entire marketing funnel (all channels and website pages):
And here’s a sample funnel graphic for an influencer campaign:
To improve the profitability of your business, you need to make tweaks at every stage of your funnel.
Here are 5 key strategies to boost your funnel’s success:
Convert as much of your website visitors into email subscribers as possible. You can test different email opt-in offers.
For example, you might try testing a flat-rate discount like this…
Versus a percentage of the sale like this …
You should also regularly test the copy and creative you use for this opt-in as well.
It’s important to A/B test your entire website’s user experience.
For ecommerce companies, this can include:
If you’re adding untargeted traffic to the top of your funnel, all of your metrics will be worse off for it.
The right type of traffic can mean demographics like gender or income level, or it can be styles or interests like gothic clothing or soccer.
To target the right traffic, you’ll need to be pickier about the influencers you partner with and update your ad targeting. Interestingly, platforms like Facebook have gotten so good with their ad algorithms, that you can often have better success with a broad audience than a clearly defined one. So be sure to test different audiences and also try letting the ad platforms have their way.
As marketers, we’re big thinkers. We get about a million ideas a day, and we’re bombarded by other ideas from the marketers we know and follow. Shut all of that out when making decisions. Take a look at your best-performing influencer campaigns, coupon codes, ad creative, social posts, opt-ins, etc. and take action accordingly.
Act on your brand values by giving back.
You can use a platform like Givz to make aligned giving easy.
Givz is a Shopify donation app that lets you set up donation incentives in a matter of minutes. For example, you might offer customers the ability to donate $10 to charity if they spend over $75.
You can then use this donation incentive in your marketing materials: your emails, your social media posts, and the top banner on your website.
It’s a smart way to give to charity from your Shopify store because it puts your customers in the driver’s seat and lets you collect valuable data on their favorite causes.
Your ecommerce marketing funnel consists of all of your marketing activities and store optimizations. There’s no such thing as a perfect funnel. Perfection lies in the continuous tests and updates.
Looking for a unique way to stand out as a purpose-driven brand?