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      Customer Data Platform (CDP)

      Conversion Funnels: Analysis and Optimization for E-Commerce in 2022

      By Samuel Kellett

      Dec 01, 2021

      14 min read

      Customer Data Platform (CDP)

      Conversion Funnels: Analysis and Optimization for E-Commerce in 2022

      ​The best way to improve your conversion funnels doesn't start with making changes: it starts with figuring out where those changes should be made. You're in an industry where  over 70% of customers will abandon their cart  instead of purchasing.

      As a marketer, you need to know where and why issues like these happen on your site. This article will teach you how to analyze your conversion funnels to find where you will get the most value from your optimizations. One step at a time, starting with the basics.

      This article is not about setting up your conversion funnels. This article is about improving the conversion rate in the visitor-to-customer conversion funnel you already have. If you're using Bloomreach Engagement, you can  set up funnel reporting  That is directly connected to A / B testing, email management, and more.

      If you're not using Bloomreach Engagement, you can still set up your funnel reporting by  setting up goals in Google analytics. Once your conversion funnels are ready, this article will show you how to make them even better:

      What is a Conversion Funnel?

      What is Ecommerce Conversion FunnelHow can you make sure you're getting the most of your traffic? There's no sense paying a fortune to attract potential customers if they're leaving your site before making a purchase. To keep a healthy conversion rate,  your site needs easy-to-follow pathways to carry these new users to the end goals you want.

      A conversion funnel (also known as a sales funnel , e-commerce funnel, website funnel, etc.) is a way of describing the path you design for a visitor to move through your site. It's called a funnel because each layer gets closer to the conversion, with a smaller and smaller group. This conversion could be defined as any action you are trying to get your users to take.

      Do you need to gather emails? Use a conversion funnel leading to an email address form. Do you sell products on the site? Use a conversion funnel that carries users all the way from their first point of entry to the “thanks for purchasing!” page (simple version pictured above).

      Your conversion funnels can be as advanced as you'd like; your final version will likely be a lot more complex than the one pictured above.

      It doesn't matter what you call each step in the conversion funnel. That's not what this article is about: if you're interested in the specific stages a B2C customer goes through, take a look at our article on customer lifecycle management .

      If you're interested in taking your conversion funnels to the next level, then this is the article for you.

      Why Are Conversion Funnels Important?

      Without clear paths to follow, your site can be a confusing mess for users to navigate. Having defined funnels allows you the opportunity to effectively test and optimize your conversion paths, leading to higher overall conversion rates.

      Once you’ve decided which steps will be mapped into your conversion funnel, you can determine which of these steps are most in need of improvement. This method of breaking your customers’ paths into pieces makes it much simpler to find the problem areas.

      How to Analyze Your Conversion Funnel with a Funnel Analysis

      A conversion funnel analysis shows you which area of the funnel needs work: it displays what percentage of users make it from one step to the next, so you can find and improve the non-converting spots through conversion funnel optimization.

      Take a Top-Level Approach

      You need to find the main problem areas before you zero in on the specific problems. Run a top-level analysis on the primary stages in your process:

      • Landing Page
      • Product Page
      • Shopping Cart
      • Purchase

      Now, determine which of those primary stages most needs some conversion rate work: are you seeing an unexpected drop before they even view an item? After they view one? After they’ve added it to their cart?

      Here’s an example of a top-level conversion funnel in Bloomreach Engagement:

      Ecommerce Funnel Analysis

      Based on this example:

      If 1000 visitors enter the site-

      -> 443 of those visitors will view an item

      -> 17.9% of those 443 people (79) will then add an item to their cart.

      -> Of the 79 who added to their cart, 59.2% will make a purchase (46)

      For every 1,000 people landing on the homepage, roughly 46 of them will make a purchase, making it a 4.6% website conversion rate.

      Now we look for problem areas. Which of these conversion rates should we fix in order to achieve the largest possible uplift in conversions? In this case, we’ll take a deeper look at the steps between adding an item to the cart, and actually making the purchase. If only 59.2% make that final conversion, that means over 40% of our potential customers are slipping away. As was mentioned in the beginning, 40% cart abandonment isn’t bad, but how can we make it even better?

      Dive Deep into the Specifics

      Now that we’ve found the primary stage we want to work on, we can take a closer look, examining each specific step taken between adding to cart and purchasing to find which of those needs the most improvement.

      Conversion Funnel AnalysisNearly 90% of those that added an item to their cart visited the cart afterward, so that step seems okay. It also seems that once someone has entered their personal details, there’s a strong likelihood of them making it all the way to a purchase (represented on this graph as the Thank You page).

      But. There is a surprising drop-off between the steps of visiting the cart and entering personal details. Nearly 30% of the people that make it all the way to viewing their cart are then leaving!

      This points to the possibility that the personal details form is in need of improvement. Maybe there are errors in the form. Maybe it’s the color choice. Maybe it’s just too long. How do you find out?

      Make a hypothesis, then try to disprove it. If you try to prove it, you may run into the confirmation bias. Instead, disprove your hypothesis: if you can’t, then you’ve found the problem.

      EXAMPLE:

      • My hypothesis is that people leave the personal details form because of the form’s color.

      I can test that hypothesis by creating several versions of the personal details form, each with a different color. The Bloomreach Engagement app connects directly to A/B testing, so if you’re using that, you can simply create similar segments and send each segment a different color variant.

      If all colors perform roughly the same, then you’ve disproven your hypothesis, and it’s time to think of another one. If one color performs significantly better, test it again against different color variants. If it still performs better, then make it that color on your site, and start testing other possibilities for improvement beyond color.

      This next section will go through optimization steps and best practices.

      How to Optimize Your Conversion Funnel for 2022

      General Steps to Optimizing Your Conversion Funnel

      1. Run a funnel analysis
      2. Pick the main area most in need of improvement (homepage, view product, add to cart, etc)
      3. Run a deeper funnel analysis on that main area
      4. Pick the step of that main area most in need of improvement
      5. Make a hypothesis about that step
      6. Try to disprove your hypothesis with A/B tests
      7. Repeat

      Conversion Funnel Optimization Best Practices

      Make Your Site Easy to Navigate

      There should be a clear path for your customers to follow – start to finish. Make sure there’s an obvious way to get to the product page, regardless of how they enter your site. Make sure that every product page highlights the shopping cart. People will abandon your conversion funnel at every stage for various reasons, so get rid of any reasons for leaving that you can control or your conversion rates will suffer.

      Keep Your Pages Simple

      Each step of your conversion funnel should be designed to provoke an action, be it getting an email address or getting the customer to the purchase page. Define the action you want for each step, and make sure that the rest of the page doesn’t distract from that action: everything on the page should lead toward the action you want.

      Always Continue to Test

      Test every change you make. Push yourself to create hypotheses for other things you can test. With Bloomreach’s Experiments feature, you can add small changes to your site (colors, fonts, hiding elements) and A/B test them with a visual editor. 

      Google Analytics also has an Experiments feature, but you’ll have to dig into the code a bit to set the tests up.

      Remember to define a global control group for your A / B tests to give yourself a baseline to compare the variations to. And just because a variation worked best in January doesn't mean it will in March. Test again.

      E-Commerce Conversion Funnels - Key Takeaways

      • A conversion funnel is a path you've designed for customers to follow through your site  
      • Conversion funnels make your site easier to navigate. They also make it simpler to find problem areas to improve
      • When beginning your conversion funnel analysis, use a top-down approach: start with the primary sections of the funnel, then drill deeper into the section that needs the most work
      • Make a hypothesis about the results of your analysis, then try to disprove it
      • Your site should be easy to navigate, your pages designed to provoke specific actions, and your testing continuous to make sure your funnels are delivering as much value as they can.

      If you'd like to see how Bloomreach can help you test and optimize your conversion funnels, schedule a personalized demo today

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      Samuel Kellett

      Head of Content

      Sam leads the content team at Bloomreach, where he manages the production of e-commerce articles and case studies, as well as the content for webinars and events. With his background in screenwriting and theatre, Sam brings a unique perspective to his role as Bloomreach’s head of content. Sam’s passion is storytelling: he is constantly exploring new and creative ways to explain complex topics.

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