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Insights, observations, and stories from the front lines of ecommerce and online marketing

How to Create a Marketing Funnel for Your Ecommerce Business [Template Included]

Are you struggling to convert people who land on your website?

You’re not the only one. Some 98% of visitors arriving on your site won’t convert—but that doesn’t mean they need to be lost forever.

A marketing funnel could be your saving grace.

In this guide, we’ll share exactly what a marketing funnel is, the several stages included, and a step-by-step guide to how you can create your own.

Ready? Let’s dive in.  

What is a marketing funnel?

A marketing funnel is the process your audience flows through to get from “stranger” to “loyal customer.” It’s broken down into three key stages:

  • Top of Funnel (TOFU): These people aren’t necessarily interested in buying your product, but they’re looking for information around a problem they’re struggling with.
  • Middle of Funnel (MOFU): Once people have found a solution to their problem, they’ll be looking for brands to help solve it. They’ll research your brand and your competitors at this stage.
  • Bottom of Funnel (BOFU): Your audience has decided they want to purchase from you, but they might still need a small nudge to convert.

Why is an ecommerce funnel important?

marketing funnel

Sure, there’s a chance your audience will make their own way through the sequence from stranger to customer.

...But if certain stages of your funnel aren’t optimized to move visitors to the next, there’s a risk your leads will fall through the cracks—and you’ll lose their business, as a result.

Understanding the key stages of a marketing funnel means you’ll have more control over your marketing campaigns, too. You can create content that is specific to people lingering within each stage, and deliver it to your leads as and when they’re looking for it.

(You can even use this information to personalize the timing of recommended products—something 36% of consumers expressed an interest in.)

Now that you’re fully in-the-know about why ecommerce funnels are important, let’s dive deeper into each stage.

Top of funnel or “awareness” stage

When people first start learning about you, they’re starting at the very top of your marketing funnel. It’s also known as the “awareness” stage because, as the name suggests, people are just starting to learn more about you.

People lingering within the top of the funnel aren’t necessarily interested in purchasing your product straightaway. They’re simply scanning for information—likely in their free time—related to a problem they’re suffering.

Therefore, the content you create at this stage needs to be non-promotional and generalized. That might be:

  • “How to”-style blog posts
  • Informational videos
  • Infographics

Take Jamie Oliver's guide to making pancakes, for example:

top of funnel ecommerce marketing

Despite Jamie Oliver selling a range of cooking equipment through his website, this blog post doesn’t feel like a direct sell. In fact, there’s no mention of his products throughout the content—although there’s a perfect opportunity.

Why? Because the people reading TOFU content aren’t ready to buy; a hard-sell to this group of people might feel too forced or off-putting.

Instead, Jamie Oliver is sharing his two cents on a wildly popular topic, and driving people to his website who have a vague interest in cooking. Those people are now in his marketing funnel without even realizing.

Middle of funnel or “consideration” stage

Once your audience has engaged with several pieces of TOFU content, they’ll progress to the “consideration” stage. They know they’re struggling with a problem, and will start to shop around for the best company, product, or service to solve it.

The content you’re creating for these people needs to be more in-depth than the content they’ve already consumed. Why? Because they want you to prove you’re the best solution for their problem—and not one of your competitors.

The following types of content can do that:

  • Interactive quizzes
  • Comparison blog posts (e.g. Drift vs. Intercom, published by Drift)
  • Gated premium content like ebooks or guides
  • Educational videos

Taking a skincare company for example, you might want to create an interactive quiz that tells people the best product based on their skin type and problem areas (like this one from Urban Skin Rx).

For example: If they have sensitive skin and are looking to reduce acne you might recommend one product, or if they're looking to reduce under eye puffiness or darkness you would recommend another. 

Tools like Interact and Typeform can do this automatically for you.

The best part? It helps to nudge people towards the next stage of the marketing funnel—especially when 77% of customers want personalized content.

Bottom of funnel or “purchase” stage

By this point, you should have a large chunk of people who’ve passed through the start of your marketing funnel. Arguably the most important part is the bottom of your funnel—also known as the “purchase” stage.

People hitting this point have decided they want to purchase from you. The content you provide needs to nudge them towards hitting “confirm”, such as:

  • Abandoned cart emails
  • Case studies
  • Discount codes

Here’s an example of how HubSpot convert their BOFU audience with a case study:

bottom of funnel ecommerce marketing

The aim of this content is to convince customers to purchase. Why wouldn’t they hit “buy now” if they’re reading a success story of how HubSpot’s software have previously helped a company increase their audience size by 81%?

Take a look through your customer list, and reach out to those who fit your “ideal customer” mold. How has your product or service helped them?

Find the most impressive answers and write them up.

Bottom of funnel or “repeat purchase” stage

Great job! You’ve built a marketing funnel, and the people passing through are turning into customers.

...Your job isn’t over yet.

The next stage in your marketing funnel is called “repeat purchase.” As the name suggests, the goal here is to convince the people who’ve just bought a product from you to do so again (multiple times, if possible.)

Throughout this stage, you could:

  • Send product recommendations via email
  • Run Facebook retargeting ads based on the items they’ve purchased
  • Deliver loyalty program invitations

It’s tempting to skip this stage entirely. You’ve already got your lead on your customer list, right?

Not necessarily.

Adding this section into your marketing funnel helps to generate lifelong customers. Not only is it easier to sell to an existing customer because they already trust you, but it’s also five times cheaper to retain an existing customer than attract a new one.

Bonus: Free marketing funnel template

Feeling overwhelmed at the thought of creating so much new content, and understanding how your potential customers make their way through each stage?

You’re not the only one.

That’s why we’ve created a free marketing funnel template to help you visualize your entire funnel from start to finish.

Click here to grab your copy.

free marketing funnel template

How to measure the success of your marketing funnel

You’ve got your marketing funnel set-up, and you’re ready to start converting leads on autopilot.

But just like any type of marketing task, you’ll need to periodically check in and see whether the funnel you’ve built is working—and fix what isn’t.

Here are some metrics you can use to determine that:

Traffic

Chances are, overall website traffic is a metric you’re already tracking. It’s especially important when you’re building your marketing funnel because it allows you to see the volume of people passing through, depending on the content being viewed.

Let’s say you’ve created a batch of new content, grouped into the four key stages. You find the website traffic figures for each group:

  • Awareness: 100 visitors
  • Consideration: 80 visitors
  • Purchase: 5 visitors
  • Repeat purchase: 3 visitors

You can quickly see a huge drop-off in pageviews from your “consideration” to your “purchase” content. So, dig through the content and determine whether it’s been optimized for the right people—and more importantly, identify (then fix) the problem that’s causing people to exit your funnel.

Conversion Rate or Sales

Check whether your marketing funnel is working correctly by taking a look at your website’s conversion rate formula using the following calculation:

(Total website visitors / sales) x 100

Are just 0.5% of the visitors arriving on your website converting? Your sales funnel might need tweaking. There’s probably a glitch that prevents people from progressing to the next stage.

It’s worth noting the average ecommerce website has a conversion rate of 1-2%. A figure that beats that is considered above average—but of course, you’ll want to continually work towards increasing your conversion rate.

The more sales you generate, the more ROI you’ll get from your funnel.

Cart Abandonment

Do you have several people adding products to their online cart, only to exit the website and never complete their purchase? These people are still classed as being in the purchase stage. Chances are, they just need another nudge to convert.

However, calculating your cart abandonment rate can give you a brief overview of how well your marketing funnel performs.

A cart abandonment rate above the 69% average might indicate that your BOFU content isn’t performing as well as it should. Try to re-optimize your content, retarget your audience with abandoned cart emails, or add more social proof and trust signals to your checkout page to plug the leak.

The goal is to decrease your cart abandonment rate as much as possible. If people reading the content are converting, this means your sales funnel is effective at taking people from “consideration” to “purchase.”

Cart Recovery Rate

Have you managed to push the people who’ve abandoned their online cart back to complete their purchase? The percentage of people who do so form your cart recovery rate.

It goes without saying you’ll want this metric to be as high as possible.

A high cart recovery rate means the BOFU content you’re using to drive people back to your website is effective. They’re finding it interesting enough to read—and as a result, absorb your knowledge, trust you, and convert.

Redemption Rate

If part of your BOFU targeting includes discounts or coupons, you’ll need to calculate your redemption rate—the percentage of all the coupons that have been redeemed by your customers.

For example: If you send customers 100 coupon codes and only 30 are used, your redemption rate would be 30%.

It’s reported that a “healthy” redemption rate falls between 13% and 32%. A higher score indicates your offers are doing their job: convincing customers to purchase again. A lower score could signal the otherwise.

How to increase conversion rate for an ecommerce store

You’ve created your marketing funnel and kept an eye on the metrics we’ve discussed… But you’re still suffering with poor conversion rates. A small percentage of people visiting your website end up on your customer list.

What happens next?

You’ll need to do some work on improving your overall conversion rate using these three techniques.

Onsite Displays

Earlier, we mentioned how customers prefer personalized marketing messages. Take advantage of that from the early stages of your marketing funnel by making your website content personalized.

Privy’s audience targeting features gives you the opportunity to do this. You can choose to display specific content to the right person at the right time, depending on their onsite behavior and what you know about them. For example, are they a new customer or an existing one? A targeted offer that acknowledges 'welcome back' is more likely to result in conversion (like the example from Slidebelts below).

Slidebelts welcome back campaign

Also think about specific actions your customers are taking and trigger displays based on that behavior. Are they on a specific page? Are they viewing content? Are they about to exit your site? Using Privy's exit intent trigger, you can display a “wait, before you go” message before they leave your site, like the example below from Zutano. It could convince them to stick around.

Zutano Exit Intent Pop Up_Case Studies

A/B Testing

A/B testing, also referred to as split-testing, shows two groups of people a slightly different web page. Almost half of all marketers run A/B tests on their website—and for good reason. Testing various:

  • Copy
  • Buttons
  • Page layouts
  • Pop-up triggers
  • Colors

...can allow you to identify which features your customers enjoy.

Display slightly different page variations to audiences lingering within each stage of the funnel, then measure the difference in your target metric. You might find, for example, that your BOFU pages with a call-to-action button that says “I want my products!” have the highest conversion rate. However, buttons on those pages colored in blue have a 20% lower conversion rate than those in red.

It makes sense to tweak other pages targeted to BOFU audiences accordingly, right?

Cart Abandonment Emails

We found that 72% of merchants consider reducing the number of abandoned carts to be one of their top ecommerce challenges.

However, personalized and targeted abandoned cart emails could get the people who’ve visited your checkout page back into your marketing funnel—and convince them to make a purchase.

The process for this starts long before writing your emails. Onsite exit intent pop ups that ask your lead to join your email list is the starting point. After all, you can’t send re-engagement emails if you don’t have their contact details.

Once the lead is on your mailing list, take a look at the products they’ve abandoned. Can you find a pain point they might be struggling with? If so, draft a short cart abandonment email that relieves this problem—while also pushing them to convert now… Not later.

That’s bound to boost profitability and your overall conversion rate.

Final thoughts

As you can see, it’s important for every ecommerce business to have a marketing funnel. Not only can you create marketing campaigns targeted to a specific group of people, but you’ll also have a streamlined, proven system for leads to pass through once they’re on your site.

But creating a marketing funnel isn’t a one-off job. You’ll need to constantly assess what’s working (and fix what isn’t), and work towards improving your overall conversion rate.

Granted, it’s a lot of work—but it’s worth it when you’re converting a huge percentage of website visitors who would’ve otherwise clicked the exit button.

Posted by Elise Dopson

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