What is a Sales Funnel?
Let’s talk about sales funnels and what we mean when we talk about sales funnels.
This is an actual sales funnel that I used on one of my e-commerce sites. I keep it on a spreadsheet so I can populate the number etc I want you think of this as the top of the funnel where we fill in visitors from in the case Facebook. I use Facebook advertising to drive traffic to the top of the funnel and they’ come out at the bottom end here.
This is the funnel and I want you think of these No action visitors as leakage. So look at the funnel as if it’s a bucket and it’s leaking. On the right hand side, retargeted visitors, we see this as a refill.
So we’ve driven traffic here from Facebook for a product that’s sold for around £15.00 or $$$ in America, but let’s just say its £15. Some people will see this advert for the first time and on impulse buy it there and then.
Event though they’re cold traffic, some people have purchased straight away and this in fact runs at just over 6%. So 6% of people have seen the product, landed on the website and made the purchase.
In this case, we have had over 3,000 visitors ie people who have seen the advert and arrived onto the product page for the first time.
But we’ve also had retargeted visitors. When people have leaked out. So in total we have 3204 visitors from Facebook ads and a further 195 who have been retargeted.
So when they’ve leaked from the funnel, we’ve actually brought them back using retargeting banners, bringing them back to the website by showing a different product, a carousel of products, it could be a special offer.
There are loads of different ways that you can do the retargeting.
So you can see 3204 new visitors and 195 retargeted visitors resulting int a total of 3399 visitors of which 16% actually went through the funnel whilst another 83% were lost. But again we retargeted these lost visitors to try to get them back.
So they’ve landed on the website and now they take an action. If you were a service industry they could be filling in a form but this is a product site, we can see that 15% (485 of them) actually added products to the cart.
And we can see that from that 485, a total of 431 actually abandoned the cart and didn’t go ahead and repeat the purchase. This is also leakage and again we retarget them to bring them back into the funnel again but at the mid point as they have already seen the product page.
They’ve already seen the product so what we say is, hang on you’ve left us without completing your purchase, come on back.
So we actually had a total of 547 people who added to the cart. This is called warm traffic. Then you come down here to see how many people actually completed the check out and it was 306.
The leakage here is 18 people who had a payment error and 77 people couldn’t’ go ahead with payment for one reason or another. That’s because of the banking system in the states as when they realise I am a UK company, they won’t process the payment and I know that’s where those errors are coming from.
I now call this hot traffic because they have completed the check out. The fact that there card was declined is not their fault or my fault. And I’ve tried to capture them in different ways. In total I ended up with 206 new visitor sales, 13 retargeted sales (new visitors who were at the top of the funnel who had leaked out and were brought back in by retargeting) and they’ve gone all the way through the funnel until they eventually purchased. I had 13 of these.
I then had a further 10 people who had leaked out after adding to the cart. I’ve retargeted them, they’ve come back into the funnel at this level and completed. So I ended up with 229 sales.
And you can see here where I’m showing the losses, as cold traffic becomes warm traffic, and then hot traffic, the losses become less and less. With cold traffic the losses were around 83%, with warm traffic the loss is only 12% and with hot traffic only 2% is leaked out.
So all the way through, depending where they are on your funnel, you’ll find the visitors get warmer and warmer, hotter and hotter until they become your customer.
This applies whether you are selling a service or a product, you get these cold leads but running a Google Ad campaign, someone’s clicking onto your website for the first time from a search engine or someone’s recommended you through a Facebook link. It can be anything.
They don’t know you, they don’t know you or your company personally. They are cold traffic. With cold traffic you retarget them so that people who don’t; come down your funnel to make those enquiries to find out more about you.
You remarket (ie retarget) them to bring them back to your website so they can learn more about you. Now they’re seeing you for a second time or a third time, and you keep doing that so you’re feeding them down your funnel.
As these people don’t know you, when you retarget them you can send them to a landing page where they get something like a free e-book, a coupon, a white paper, or anything. They’ve now engaged with you and they’re a bit warmer and they know more about your brand.
Some of those will still go away but if you have their email address as they’ve filled something in on your landing page, you can email them as well as retarget them. There’s lots you can do to get them warmer and warmer until they’re hot enough that they want to make that call as they want your service or they’re going to put your product in their cart and actually buy off you.
This is what we mean when we talk about a sales funnel and every business, no matter how big you are, whether you’re selling a service or a product, everyone needs a sales funnel, going from cold traffic until they are eventually ready to buy from you.