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One of the main forces behind e-commerce is conversion rates, a force with extremely limited variation that can have a profound impact. Because the typical e-commerce conversion rate is only 2.5–3%, a few decimal places can make all the difference in the world to an organization.

Using an e-commerce conversion funnel is one method to more effectively identify areas where improvements may be made. In e-commerce, a conversion funnel can follow every step of the customer experience to show where purchases are being made, what drives them, and how your company can improve conversion rates.

Don’t let the term “conversion funnel” scare you. You merely need to optimize your conversion funnel to get the best possible outcomes if you’re selling goods or services online. It will take practice to become proficient at converting clients and creating an efficient conversion funnel. It’s something you’ll spend the duration of your internet business analyzing and improving.

What is a Conversion Funnel?

A conversion funnel is essentially a condensed version of the buyer’s journey. The trip starts when a visitor learns about your brand or a particular product, and it concludes when the visitor gives up or “converts” into a buyer or paying customer.

Conversion funnels are a common tool for organizing conversion strategies and providing team members with examples of marketing principles. These objectives lead to the division of many conversion funnels into discrete stages:

  • The “top-of-funnel” (or “TOFU”) is the broadest part of the funnel because it represents the greatest number of people. For example, every brand can expect to get more website visitors than it gets actual, paying customers from its website conversion funnel.
  • The “middle-of-funnel” (or “MOFU”) includes most of the stages of the consumer’s journey.
  • The “bottom-of-funnel” (or “BOFU”) describes the endpoint of the funnel when a visitor converts into a paying customer. It’s the narrowest part of the funnel because it’s the section that the fewest visitors reach (for a variety of reasons).

At the top of the funnel, users begin to research products or brands. They might be unsure about what they need, or whether a company is right for their purposes. In the middle of the funnel, a visitor or user considers whether to make a purchase. At the bottom of the funnel, a visitor either makes a purchase or abandons the funnel for one reason or another.

The ultimate goal of every company is to maximize how many people proceed down the conversion funnel from start to finish. Certain factors, such as brand awareness, company reputation, or a brand’s relationship with a consumer, may shorten the funnel journey.

Why Are Conversion Funnels Important?

Conversion funnels are important because:

  • They can help your marketing team be more effective
  • They help to illustrate the customer journey, which can be important for understanding how your visitors navigate your site/store
  • They can break down which stage of the buyer’s journey has the most failure

All of these elements are important for boosting your brand’s conversion rate. Conversion rate is the proportion of visitors or users you have compared to buyers or subscribers. A 20% conversion rate means that 20% of all visitors to your store buy something or subscribe.

When you use a marketing conversion funnel, you can determine, for instance, what stage of the buyer’s journey is most problematic. Are most of your visitors abandoning the conversion funnel at the top? That may indicate a problem with your website landing page or brand reputation.

Alternatively, maybe most of your users abandon the conversion funnel near the bottom. That could mean there’s a problem with the checkout conversion process or that your product copy isn’t converting users into customers effectively.

Phases of the Conversion Funnel

Traditional marketing funnel components are largely the same for all types of firms. It tracks every phase of the customer journey and the most effective ways for marketers to connect with them along the way.


The awareness stage of the funnel is where you’re working on attracting potential shoppers to your site.

The first step is to look at how you attract these shoppers, whether through social media, search results, PPC, blog, etc. Lead gen can include inbound marketing strategies, outbound efforts or referrals — every possible way someone can become aware of your brand, product and offerings. Review your click-through rates and other awareness metrics to understand what words, thoughts and messages resonate with your target audience.

Read Also: How to Build a Sales Pipeline in Excel

The second step is to make sure you’re targeting the right audience. If you’re attracting the wrong type of shoppers, you’re wasting time, and e-commerce marketing dollars and impacting your store’s overall conversion rate.


During this phase of the conversion funnel, you’re working to pique shoppers’ interest in your product or service.

Here you want to form a closer relationship with customers, and an excellent way to do this is through your e-commerce website and content, as well as email marketing campaigns. Opt-in forms, email lists, and newsletters are great ways to go about this.

To increase your opt-in rate, focus on polishing attention-grabbing aspects like headlines, carousel images and banners. Write compelling copy and have a well-executed layout for entry points, including blog posts, your site homepage and product pages.


In this phase, you want to make the potential customers want what you’re offering by building on the interest phase now that you have a shopper’s attention.

Use higher-level, more attention-grabbing elements that focus on the details. A logical place to start is by providing outstanding product photos, tantalizing product descriptions, great product options and vivid product videos.

As you make sales, work on gaining some great product reviews. This is the consideration phase for a customer, and you want to provide all the necessary information to help them make informed decisions and solve their pain points.


This phase is when shoppers take their desired action. Focus on your product pages here to ensure you’re removing friction and doing all you can to encourage shoppers to place items in their carts. From there, examine your checkout flow by including relevant information and answering common questions.

Improving your checkout to reduce cart abandonment rates is a no-brainer here, where simple checkout adjustments can make all the difference.


This final stage is extremely important for e-commerce businesses. After someone has taken the desired action and converted on your e-commerce site, you’ll want to pull these highly targeted customers back in the funnel and encourage them to become repeat buyers, as retention is crucial to growing an online store.

To encourage repeat customers and purchases, invite them to sign up for your social media channels or email newsletter so you can market to them later. You can also send them a coupon or promotion via email.

By including retargeting or loyalty materials in their shipment — as well as expanding your product line or services — you can encourage them to return and ensure they understand how much you value their business.

Stages of an E-commerce Conversion Funnel

The stages of an e-commerce conversion funnel may look different than the traditional marketing funnel, but they share a primary goal. Both look to track and guide customers through their journey, from initial interest to checkout and beyond.

The main difference between the two is the specificity of the stages. For the e-commerce funnel, they proceed as follows:


The first stage — and the first place that your customers are likely to visit on your website — is the homepage. Make sure to optimize your homepage with copy and images that will capture attention, as well as items such as testimonials or customer reviews.

The homepage will be where your business’s first impression is often made and can dictate how successful the start of the customer journey will be.

Product Page.

From the home page, customers interested in a product will use various methods to find what they are looking for — it is your job to see that the process is as smooth as possible.

To make the journey successful, review your navigation, search bars and recommendation engine to ensure that they are easily visible, easy to navigate and point customers in the right direction.

Shopping cart.

Once they have successfully found a product they want to purchase, the next step is to place the item into the shopping cart. The cart must be visible and simple to review for customers — if they get lost, you could lose a valuable prospect.

From here, the customer can either return to search for additional products — an additional upselling and cross-selling opportunity for businesses — or proceed to the next step.

Checkout page.

The checkout process will be the last step before conversion, where customers enter information to actually pay for the product. However, just because they’ve made it to the checkout page does not mean the sale will be completed. With poor UX or limited payment options, you could lose the customer right before the finish line.

Make sure that your checkout page is as capable and easy to use as possible.

Order processing and delivery.

After the customer checks out, orders must be processed and shipped. Although the sales process is completed, the journey is still ongoing for your business or the customer. Whether it’s your products running out of stock or a customer canceling the order, events can still occur that can end the sales experience.

It is in your best interest to make sure that this process goes smoothly and that your stock reserves are full and ready to go. An issue with processing and shipping can not only end a single sale but alienate a customer enough so that they never return.


The final stage of conversion funnel optimization entails what occurs after the purchase and once a product is delivered. There are generally two modes of thought on how to proceed: further acquisition and customer loyalty.

With an acquisition mindset, businesses should focus on generating referrals and customer recommendations to expand sales by word of mouth and positive customer feedback. The better the sales process, the more likely a customer will tell his friends about it.

Secondly, businesses should look to retain the customers that have already purchased from them. By focusing on these customers, you can use the familiarity built to send items such as product discounts and loyalty program offers.

How to Optimize Your Conversion Funnel

There are many ways you can optimize your company’s conversion funnel. However, different strategies are best utilized for different stages of your funnel.

For example:

  • Lower funnel stages are primarily about building trust and improving customer experiences and satisfaction with products. Your optimization strategies should lean heavily into demonstrating the benefits of your brand or products and building trust with leads to convince them to buy.
  • Middle funnel strategies should be about driving traffic to your site and specific products, creating personalized or targeted experiences, and convincing customers to buy from you rather than a competitor.
  • Top-of-the-funnel stages are about bringing people to your brand in the first place. Optimization efforts heavily rely on marketing improvements and utilizing keywords smartly.

Examine your conversion funnel and determine which stage(s) needs the most work. Then you can implement optimization efforts like:

  • Making your website easier to navigate through improved UI
  • Improving product copy or product images
  • Analyzing heatmaps, scroll maps, or other engagement maps to understand what’s working and what’s not
  • Making it easier to check out from your store
  • Offering free or discounted shipping
  • Improving your social media or online ads


Whether big or small, there are a lot of things that firms can do to aid with conversion optimization. Even small adjustments can have a big impact, and optimizing for mobile devices and other procedures is crucial for the success of e-commerce.

Always keep your target audience in mind when you create content. How can you alleviate their issues and pique their interest in your products? What does the buyer’s journey look like for them?

Enhancing the navigability of every level in the conversion funnel will position you for even greater success.

About Author


MegaIncomeStream is a global resource for Business Owners, Marketers, Bloggers, Investors, Personal Finance Experts, Entrepreneurs, Financial and Tax Pundits, available online. egaIncomeStream has attracted millions of visits since 2012 when it started publishing its resources online through their seasoned editorial team. The Megaincomestream is arguably a potential Pulitzer Prize-winning source of breaking news, videos, features, and information, as well as a highly engaged global community for updates and niche conversation. The platform has diverse visitors, ranging from, bloggers, webmasters, students and internet marketers to web designers, entrepreneur and search engine experts.