Conversion Funnels are the Key to Survival in a Tight Economy

Right now, businesses are without a doubt operating in one of the most challenging economic environments in more than a generation. Everywhere you look, unemployment is high and consumer confidence is plummeting. Worst of all, there appears to be no end in sight.

Conversion funnels are key - 99jj44
Image created by Market Business News.

On top of all of that, the sudden shift of commerce to an almost all-digital model has introduced a flood of new competition to the digital landscape. That translates into a situation where businesses are increasingly called upon to fight for a slice of an ever-shrinking eCommerce pie, with their very survival on the line.

In response to the situation, businesses have two choices. They can either devote their efforts to go all-in on attracting new customers into their orbit, or they can take action to make the most of the customer base they already have. Whichever option they choose, this means one thing: they’re going to need a high-performance conversion funnel if they want to succeed.

Before that can happen, though, business decision-makers have to understand the logic that drives a conversion funnel, so they can make sure they’re aiming to create one that suits their specific needs and business goals. To help, here’s a primer on different types of conversion funnels, and an overview of the stages that make the process work.

Decide on a Strategy

At their core, all conversion funnels seek to move an individual along the path to some action a business would like them to take. For that reason, every conversion funnel will have some things in common. It is the desired outcome, however, that must be decided in advance. So, for any business approaching the process of creating a conversion funnel, the first thing to determine is what the end goal of the funnel will be. For example, is the business trying to:

  • Capture website visitors and convert them into qualified leads?
  • Take existing leads and convert them into paying customers?
  • Reengage existing customers to drive repeat business?

The type of funnel deployed will depend on the precise goal decided at the earliest stages of planning, so getting this right is critical. Also, as you may have deduced, a business might opt to employ multiple funnels at once to maintain a steady flow of business at all times. In that situation, each funnel would feed its output into the next, creating an end-to-end marketing and sales process.

Study the Target Customer

Have you identified your target audience - image for article image adapted by Market Business News.

After figuring out the goal of the funnel that’s going to be built, the next vital step is to build a profile of what the business’s ideal customer looks like. That means undertaking a process to comb through existing sales data to identify the common traits of your most valuable customers. Once those traits are identified, they can be used to develop an ideal customer persona, which is essentially a biography of a hypothetical ‘perfect’ customer and a write-up that explains how they think.

That ideal customer persona should be used as guidance to develop the marketing strategy that will feed the top of the new conversion funnel. The idea is to maximize the flow of people who fit the profile into the conversion funnel and to keep that flow going at all times. Maintaining a high quality of input is a prerequisite to building a high-performance conversion funnel that will last, so this is a crucial step in itself.

Understand the Four Basic Funnel Stages

Before moving on to building the conversion funnel the business needs, it’s important for all stakeholders (marketers, salespeople, managers) to understand the various stages that make for a viable conversion funnel. They are:

Stage 1 – Awareness

The top of any conversion funnel is always the stage when people make their first meaningful in-context contact with the business. Depending on the purpose of the funnel, they may arrive as a result of marketing campaigns designed to increase brand awareness, or as people who have come looking for a specific product or service, or in response to a re-engagement email campaign.

At this point, the overarching role of the conversion funnel is to engage with the visitor and provide them with enough information to hold their attention and lead them toward the next step in the process.

Stage 2 – Interest

Once the visitor decides they want to move forward, they then enter the second stage of the conversion funnel – the interest stage. As the name implies, the people who remain at this stage already have the motivation to learn more about the business and its products. Those without that motivation have been removed from the funnel. It is at this point that it’s imperative to make it as easy as possible for the people who remain to learn as much about the business and what it does as possible.

It is common for businesses to use an array of content to accomplish this task, including in-depth blogs, datasheets, and informative video content. In some cases, it makes sense to use an all-of-the-above strategy. There’s no exact right way to do this, but using the previously created customer persona as a guide is a good starting point.

For example, if your ideal customer frequents sites like YouTube, video content is the order of the day. If they’re more apt to read long-form articles, give that to them. No matter what the content, though, it must always include a call to action that keeps people moving to the next stage.

Stage 3 – Desire

After getting the visitor interested in the business and its products, the next stage of the funnel involves beginning the process of motivating them to convert. The conversion activity that’s encouraged will vary based on the purpose of the funnel. For example, the desired behaviour in a qualified lead funnel might be getting the visitor to provide their contact information for inclusion on a marketing list. If a sale is what the funnel is driving toward, the conversion behaviour is getting the visitor to buy something.

In every case, though, what’s needed is to provide the visitor with the last small push they need to take the next step. This might be accomplished by showing the visitor some testimonials from existing happy customers, or by giving them access to a free webinar or a product demonstration. In short, the goal is to demonstrate to the visitor that they’ll derive plenty of value from their association with the business – and to follow that up with a clear path they can follow to whatever the desired conversion activity is.

Stage 4 – Conversion

Any visitor that reaches this stage of the funnel should be primed and ready to take whatever action the funnel has led them toward. More than anything, the primary goal of this part of the process is to make it as simple as possible for the visitor to do whatever it is, you’re asking them to do. Then, just get out of the way and let them do it. It’s a deceptively simple goal that isn’t nearly as easy as it sounds.

That’s because even the slightest things can derail even the most motivated visitor. It’s why companies like have data-driven iterative processes designed to find the optimal way to get people in the conversion stage of a funnel to commit and seal the deal. This is also the part of the funnel that involves the greatest risk – because abandonment at this stage means that all of the previous efforts to get them to convert is wasted.

The Bottom Line

Right now, no business can afford to let any potential customer walk away. Building a conversion funnel is a great way to minimize those losses and make sure that every marketing dollar spent has a high likelihood of resulting in a sale or other tangible benefit to the business.

If nothing else, it breaks the stages of a potential customer’s journey to conversion into manageable steps that can be adjusted as needed to yield the best possible results. So, as competition continues to rise, and consumer spending continues to tighten, smart businesses should be getting to work building and optimizing their conversion funnels right away. Those that don’t may not be around long enough to regret their inaction.

Interesting related article: “What is Conversion Rate?”