What is a conversion funnel and how can you optimize it?
Ever used a funnel while baking?
That cone-shaped thingamajig may seem excessive when you’re just pouring some liquids from one container to another, but it plays an important role.
A funnel directs things where you want them to go, and not somewhere else (like all over the counter, or the floor, or your sweater). Funnels guide flow.
A conversion funnel is the same idea but applied to your marketing strategy. Conversion funnels help you lead consumers through the buying journey, to make sure they land exactly where you want them to. Of course, the end goal is to convert them. (Or, you know, it should be.)
TABLE OF CONTENTS
- What is a conversion funnel?
- What’s the difference between a conversion funnel and a customer journey?
- What are the 3 levels of a conversion funnel?
- What are the 5 stages of a conversion funnel?
- Why is a conversion funnel important for marketing?
- How to analyze your conversion funnel’s performance
- How to optimize results for your conversion funnel
- The best tools for conversion funnel optimization
- How to overcome challenges with conversion funnel optimization
Paul Park
Paul is a writer on Unbounce’s content team who lives and breathes storytelling. (It’s like oxygen but with better plotlines!) Ask him what he’s up to at any given moment and you’ll get answers ranging from folding paper dragons (y’know, origami) to catching up on the latest cool tech, and finding other ways to channel his inner geek.
» More blog posts by Paul Park
Melanie Deziel
Melanie is the Director of Content at Foundation Marketing, where she oversees content ideation and creation for B2B brands and Foundation itself. She’s an author, a speaker, and a big-time coffee drinker. All posts are proofread by a very fluffy feline named Luna.
» More blog posts by Melanie Deziel
The conversion funnel isn’t only for purchases or physical products, though. The “transaction” at the end of the funnel could be someone subscribing to your newsletter, making a purchase, or signing up for a free trial.
When you implement and optimize your conversion funnel, you’ll experience a boost in lead generation, conversion rates, and profits. So, how do you build a well-defined, optimized funnel to capture leads, nurture them, and get ’em to convert?
Let’s dive in.
What is a conversion funnel?
A conversion funnel (which is sometimes called a “sales funnel” or “marketing funnel”) is a step-by-step process that helps you visualize your prospects’ buying journey, so you can lead them towards making a purchase.
A well-optimized conversion funnel isn’t a one-off attempt to guide a user from one place to another. It’s a holistic approach that strategically ties your marketing and sales activities into one streamlined system for the audience to move through.
At each stage of the funnel, there’s content serving as guideposts for how the audience can move forward: blog posts, landing pages, videos, emails, infographics, social ads, PPC campaigns, and more.
With a well-constructed conversion funnel, all of your marketing and sales activities combine to attract prospects, nurture qualified leads, and then convert them into paying customers.
Ideally, some of those customers who convert at the bottom of the funnel become brand evangelists. And since a whopping 90% of prospects trust suggestions from family and friends, those brand evangelists can have a huge impact on filling the top of the funnel.
Once those new prospects land at the top of the funnel, you repeat the “attract, nurture, and convert” process. It’s the circle of life. (*starts singing Lion King intro*)
What’s the difference between a conversion funnel and a customer journey?
If you’re not already familiar with conversion funnels, you might be wondering how it’s different from a concept called “customer journey”. After all, they both map out how customers interact with you and your product or service, but there’s a distinct difference in the scope of what they focus on.
Think of it this way: one’s a grand, sprawling epic while the other is a gripping short story. (Read on to find out which one is which!) Both are essential reads in the library of understanding customer engagement.
Customer journey: the big picture
The customer journey is your epic saga. This journey is a panoramic view of a customer’s experience, tracing their path from initial curiosity sparked by an ad or word-of-mouth, through the twists and turns of research and comparison, leading up to the climactic decision to purchase or engage, and beyond, into the realm of loyalty and advocacy.
The customer journey encompasses it all, providing a holistic view that captures the essence of the customer-brand relationship in its entirety.
Conversion funnel: the path to conversion
Then, there’s the conversion funnel—a tightly plotted short story that focuses on the narrative’s path towards a singular goal: conversion. This funnel is a marketer’s storyboard, plotting out the critical scenes that guide a potential customer from the opening scene (awareness) through rising action (interest and desire), and finally, to the big, climactic ending (action).
The conversion funnel distills the vast epic of the customer journey into a focused narrative, aiming to maximize efficiency and effectiveness in guiding the customer to the treasure trove of conversion.
This focused framework helps you, the marketer, pinpoint exactly where your audience is within the story and how to keep them engaged until they reach the end. It’s about crafting each part of the tale so it not only captivates but also gently guides the reader—er, customer—towards taking action. That could be a purchase, a subscription, or any form of engagement.
So, while the conversion funnel offers a laser-focused guide on navigating through to conversion, the customer journey provides the rich, detailed backdrop that gives every interaction depth and meaning.
Understanding the nuances between the two allows you to craft not just effective strategies, but meaningful narratives that resonate with your audience on a deeper level. After all, in the grand library of customer engagement, it’s the stories that stay with us, guiding us back to the brands we love time and again.
What are the 3 levels of a conversion funnel?
Apart from driving traffic and boosting conversions, the sales funnel creates “aha” moments for your prospects: a point in your prospect’s buying journey when they exclaim, “OMG! This is what I’ve been looking for!”
But getting prospects to notice your brand or engage long enough to experience an “aha” moment is no easy task. The average prospect checks out multiple content pieces across various websites before moving to the next stage of their journey. So your mission—should you choose to accept it—is to create content for each of the three stages of the conversion funnel.
You want to guide your audience from awareness, interest, and consideration all the way to intent and purchase. In other words, you want to appeal to your customers no matter which stage of the funnel they’re moving through.
1. Top of funnel (TOFU)
This is the spot where every buyer starts. Here, buyers just became aware of their problem, and they’re actively seeking a solution. They use informational queries like, “What do I wear to ski?” or “How do you stay warm while skiing?”
If you approach these individuals with a hard sell at this stage, you’ll get an outright rejection. They just aren’t ready to purchase yet.
To get their attention, you need to offer them value by listening to and answering their questions.
Use irresistible copy in your content pieces to answer the questions a potential buyer has at this stage. These pieces can include:
- blog posts
- articles
- ads
- landing pages
- social media posts
- checklists
Your goal for this stage is to build trust and position your brand as an authority. Educate, entertain, and inspire your audience as you answer questions related to the problem your product is designed to solve. That way, when they’re ready to buy, your brand pops up in their minds first before your competitors.
2. Middle of funnel (MOFU)
If you’re lucky, some of that top-of-funnel content will win you ongoing interest. Those who have their interest piqued may decide to exchange their contact info for a downloadable resource. This is where you turn visitors into leads.
The goal of this phase is to reinforce trust, nurture leads, and monitor purchase intent.
At this stage, your leads are considering whether or not to become paying customers. They’re gathering more information about your solutions. (And you’re trying to gather information about them as well.)
The best way to nurture leads here is to speak directly to them. Focus your efforts on creating personalized content, offers, and email campaigns, based on the leads’ specific needs, challenges, and personalities. This may involve creating multiple variants to speak to different demographic or psychographic segments.
Content types in this phase often include:
- email campaigns,
- webinars,
- in-person events,
- case studies, and
- social proof like testimonials and reviews.
Since you know your leads are considering options at this stage, you can give them a little push using product reviews and product comparisons. The goal is to provide detailed information to help guide the audience through their consideration process.
3. Bottom of funnel (BOFU)
Assuming you made a compelling case for your product with your MOFU content, this final stage is where the lead (hopefully) decides to purchase.
To help this process along, you’ll want to apply some sense of urgency to your:
- reminder email,
- promotional offers, and
- retargeting ads.
As in the middle of the funnel, any tactic you decide to adopt at this stage should be tailored to your prospect’s unique needs and buying behavior.
This stage can be pretty emotional for your prospect. (Committing to purchase can be a big and stressful decision!) Ensure your sales copy speaks directly to their key pain points. Make a passionate case for your product.
Understanding the nuances of each stage within the conversion funnel allows you to tailor your strategies effectively, ensuring that each course of the customer’s journey is as delightful and fulfilling as the next. By catering to the specific needs and preferences at each level, you can guide your audience from casual awareness to committed decisions, making every step of the journey a memorable part of the overall experience.
What are the 5 stages of a conversion funnel?
Now let’s shift our focus to the different stages that each customer will journey through as they explore your product or service.
The standard AIDA (Action, Interest, Desire, Action) model for the stages of a conversion funnel identifies four stages, but there’s a fifth stage that’s also extremely important if you want your customers to come back regularly (which of course you do). Here’s how it all works:
Awareness
The first stage in the customer’s journey is all about awakening the senses. The awareness stage is where potential customers catch the first whiff of your brand’s aroma, piquing their curiosity and drawing them closer to the feast that awaits.
- Identify traffic sources: Understand where your guests are coming from—be it social media, search engines, or word-of-mouth—to tailor your approach effectively.
- Spread the word: Use ads, customer stories, and visually appealing content across platforms like Instagram and Facebook to generate buzz around your brand.
- Measure success: Keep an eye on growth in traffic and engagement rates to see how well the seeds are taking root.
Interest
Next we move to the interest stage, where the flavors of your brand start to unfold, enticing leads to linger and explore what’s on offer. Here, the goal is to deepen their curiosity, transforming casual browsers into captivated audience members.
- Engage with compelling content: Offer valuable insights, how-to guides, and engaging stories that resonate with your audience’s needs and desires.
- Keep it appealing: Design your website and content to be visually attractive and easy to navigate, ensuring a pleasant browsing experience.
- Track metrics: Gauge interest by examining metrics like time on site and page views.
Desire
The desire stage is where tastes are refined and preferences are formed. It’s here that potential customers start to truly envision themselves enjoying what you have to offer, driven by the perceived value and satisfaction your brand promises.
- Highlight the benefits: Emphasize how your products or services can improve lives, spotlighting the unique value proposition only you offer. Focus on the emotional and practical benefits of your product or service.
- Nurture with precision: Use targeted campaigns and personalized content to make your leads feel special, showing them exactly how your brand fits into their lives. This way you’ll keep them engaged and moving towards conversion.
Action
The action stage is where decisions are made and commitments are sealed. Here, your potential customers are ready to take the plunge, motivated by the irresistible proposition your brand presents.
- Make it irresistible: Offer clear, compelling calls to action (CTAs) that guide leads toward making a purchase or signing up.
- Upsell and cross-sell: Present additional value through related products or services that complement their initial interest, enhancing the overall experience.
- Optimize performance: Analyze conversion rates and basket sizes so you’ll know where to make adjustments and how to find ways to improve.
Re-engage
The re-engagement (or loyalty) stage acts as an encore, encouraging satisfied customers to return for more. This loyalty stage is crucial for sustaining your brand’s appeal, turning one-time patrons into lifelong fans.
- Cultivate loyalty: Implement loyalty programs and regular engagement strategies to keep your brand top-of-mind and increase customer lifetime value (CLV).
- Personalize the journey: Tailor experiences and offers based on past interactions, ensuring each touchpoint feels uniquely designed for them.
- Rekindle interest: Some customers may bypass initial funnel stages, requiring tailored strategies to reignite their interest and desire swiftly.
Each stage of the conversion funnel serves a pivotal role in guiding potential customers from initial awareness to loyal advocacy, crafting a journey that’s as fulfilling as it is profitable. By understanding and catering to the nuances of each stage, brands can craft experiences that not only convert but also delight and inspire enduring loyalty.
Why is a conversion funnel important for marketing?
Just like the baking funnel we mentioned at the beginning of this post, a conversion funnel is an essential tool to help you reach your goals. It’s like a GPS for your marketing, a navigational tool that’ll help guide you through the often-complicated landscape of customer behavior and eventually reach the destination of increased effectiveness and efficiency.
Here are the main ways a conversion funnel can improve your marketing efforts:
Enhance marketing effectiveness
The conversion funnel isn’t just a model—it’s a blueprint for success. It helps marketing teams understand where to focus their efforts, ensuring that every dollar spent, every ad placed, and every content piece published is tailored to guide potential customers closer to making a purchase.
Illustrate the customer journey
Like a map in the hands of a seasoned explorer, the conversion funnel reveals the path your customers take through your digital landscape. This visualization is critical, shedding light on how visitors navigate your site or store, and highlighting the moments that matter most on their journey from awareness to action.
Identify stages of drop-off
Recognizing where potential customers exit the funnel is like finding where the leaks are in a boat—you can’t fix what you don’t know. By pinpointing these critical junctures, businesses can address and rectify issues, whether they occur at the top of the funnel due to landing page inefficiencies or near the bottom due to checkout complexities.
Optimize conversion rates
Understanding the intricacies of the conversion funnel allows for strategic interventions that bolster your brand’s conversion rate. Whether it’s refining your website’s user experience or tweaking product descriptions to better capture the value proposition, the insights garnered from funnel analysis are invaluable.
Provide insights into customer behavior
Beyond its navigational prowess, the conversion funnel serves as a lens through which patterns in customer behavior come into focus. This data-driven insight informs marketing strategies, allowing you to craft messages and offers that resonate deeply with your audience, driving both immediate sales and long-term revenue growth.
Elevate customer experience
By dissecting the customer journey, you can create more engaging, seamless experiences that not only increase the likelihood of conversion but also foster loyalty and advocacy. A smooth, enjoyable journey through the funnel is a key component in building a base of satisfied, returning customers.
Enable marketing automation
The structured nature of the conversion funnel lends itself to automation, allowing you to efficiently guide customers through their buying journey with minimal manual intervention. This not only saves time and resources but also ensures consistent, personalized engagement with potential customers at every stage.
In the realm of digital marketing, the conversion funnel isn’t just important—it’s essential. In a landscape where attention is fleeting and competition is fierce, the conversion funnel provides the clarity and direction needed to navigate the path to conversion success.
How to analyze your conversion funnel’s performance
Now that we’ve convinced you about how important it is to keep improving your conversion funnel, let’s dive into how you can accomplish that.
Important metrics
First, let’s start with some metrics that will reveal the secrets of your funnel’s inner workings:
Cost per acquisition (CPA)
Think of CPA as the price tag on each shiny new customer you reel in. It’s the bounty you pay for the pleasure of their company. The goal? To make sure the revenue far outweighs the cost over time. Keep your CPA lower than your Customer Lifetime Value and you’re sitting pretty.
Customer lifetime value (LTV)
Customer Lifetime Value is a measure of the revenue a single customer can provide throughout the entire time they’re your customer. This isn’t about one-off purchases—it’s about the revenue a customer contributes over time. Nurture them from their first step into your funnel, and watch the LTV soar high above the CPA clouds.
Conversion rate
This is the percentage of visitors who actually do what you’d like them to do—convert. The higher the conversion rate at the bottom of the funnel, the more successful you are.
Side note: You might be wondering, “So how do I know what qualifies as a ‘good’ funnel conversion rate?” There’s no single answer to that question because each industry has its own standard, but our Conversion Benchmark Report can provide some super useful insights for your industry.
Click-through rate (CTR)
Here we measure the allure of your product’s or service’s appeal—the emails that beckon travelers further into your funnel. A high CTR signals compelling content that entices clicks and engagement, leading them closer to conversion.
Engagement rate
How captivated are your visitors by the wonders of your product or service? Do they explore with the eagerness of a child in a candy store, or do they glance and flee? Metrics like session duration, bounce rate, and social interactions paint a picture of how deeply visitors are drawn into your world.
Average order value (AOV)
Seize the opportunity to increase the value you gain from each transaction. AOV is your guide to understanding how much cash customers are willing to part with at each purchase, offering clues on upselling and cross-selling your offerings.
Gathering data and insights
With those metrics in mind, here are some techniques to help you get the info you need to figure out the best path forward.
- Define the customer journey, mapping every twist, turn, and challenge along the path.
- Track conversion events to capture moments of truth and decision.
- Employ heatmaps and session recordings to uncover hidden obstacles and opportunities for engagement.
- Segment your audience for tailored treasures that resonate with each unique visitor.
- Visualize data with funnel analysis tools, turning insights into actions that lead to untold wealth in conversions.
How to optimize results for your conversion funnel
A conversion funnel can help keep your audience where you want them to be, throughout each stage of their journey. These types of funnels work best if you implement them mindfully and look for opportunities to optimize them regularly for maximum CRO (conversion rate optimization)
Earlier in this post we explained the three main levels of a conversion funnel: TOFU, MOFU, and BOFU. With that model in mind let’s take a closer look at how you can improve your traffic flows at each level.
TOFU optimization strategies
At the top of the funnel, it’s all about casting a wide net to capture as much fish—er, customer attention—as possible. The goal? To make them aware of the awesome brand voyage they could embark on with you.
Analyze traffic flows
First, look at how traffic flows through the funnel for opportunities hidden in your web traffic patterns. You can use Google’s Goal Flow tool to investigate questions like these:
- Do users enter my funnel at the first step, or are they jumping in somewhere in the middle?
- Are there a lot of unexpected exits from a step in the middle of the funnel?
- Is there a place where traffic loops back?
- Does one segment of traffic act differently than other segments? Is it converting more or less often?
Review your inbound campaigns
Next, take a look at the email campaigns that are a part of your audience’s buyer journey: onboarding sequences, promotions, thank you pages, and more. By looking at the open rates, click rates, and unsubscribe rates—and comparing them to email benchmarks—you may identify high-performing emails you can build upon or low-performing emails that could use some TLC.
You can do the same for other tools you use to drive traffic and attract customers:
- Look at any available social data to determine which posts and activities tend to generate high engagement, click-through, and conversion.
- Examine the performance of any PPC campaigns to optimize for more conversions.
- Review any lead magnets or gated content to see which are associated with the highest conversion rates.
Know your audience
Start broad but refine your focus by creating detailed personas. This ensures you’re not just shouting into the void but calling out to those who are truly interested.
Optimize your landing pages
You also want to carefully audit your landing pages, since they play a vital role in your conversion funnel’s effectiveness. Not only do your landing pages impact your quality score across any PPC campaigns, but they’re also often your audience’s final stop between consideration and purchase.
A problematic landing page may not get folks over the finish line to make a purchase, but it also might be an obstacle for someone who was otherwise ready to buy.
Look for opportunities to optimize the copy, calls to action, buttons, illustrations, photos, and other elements on your landing pages. (If you’re not sure what a good conversion rate is for a landing page, check out our Conversion Benchmark Report.)
MOFU optimization strategies
In the middle of the funnel, your potential customers are on board, navigating through your offerings. It’s your job to ensure smooth sailing and keep them engaged.
Illuminate the path
Make your pages inviting and easy to navigate. Follow good UI and UX practices to create clear signposts and use effective CTAs to prevent visitors from straying off the path to conversion.
Tell your story
Provide a rich tapestry of stories (y’know, content) that delve deeper into the lore of your offerings. Use videos, FAQs, and insightful articles to answer questions and build trust.
Capture interest
Employ newsletter sign-ups and discounts as lures to keep potential customers hooked and coming back for more.
BOFU optimization strategies
It’s at the bottom of the funnel where decisions are made, and leads transform into customers.
Reduce checkout friction
Simplify the payment process and address common issues that lead to abandoned carts. (Abandoned cart emails are a great tool for luring customers back in.)
Enhance product pages
Make sure your offerings are irresistible, with engaging descriptions, videos, and images.
Tailor your communication
Use BOFU-specific emails and ads to nudge your prospects toward that final, conversion-clinching step.
The best tools for conversion funnel optimization
Now that you know how to make your conversion funnel the best it can possibly be, let’s talk about the tools that’ll help you do the job.
Landing page optimization tool
- Unbounce: We might be a teeensy bit biased, but Unbounce is your one-stop shop for creating high-converting landing pages. Drag-and-drop your way to stunning designs, craft compelling copy, and use AI to automatically optimize for conversion. It’s like having a landing page conversion superpower at your fingertips.
Copywriting tool
- Smart Copy: Sometimes, even the most marketing-savvy wordsmiths get stuck. (Or so we hear, anyway. It never, ever happens to us.) Smart Copy is your AI writing sidekick, sparking inspiration and helping you craft clear, concise, and persuasive conversion-focused copy that compels visitors to take action.
A/B testing tools
- Unbounce (for landing pages, popups, and sticky bars): We mentioned Unbounce for creating landing pages, but we’ve got a pretty darned good testing solution too. You can A/B test different elements of your landing pages to see which versions convert the best.
- VWO (for website testing): With VWO you can optimize your entire website for maximum conversion potential.
- Other A/B testing tools: For even more testing options, consider tools like SiteSpect or Optimizely. (You can also check out our blog post that explores 16 A/B testing tools.) It’s all about finding the A/B testing platform that best suits your needs.
Heatmap tools
- Hotjar: Ever wished you could see exactly how visitors interact with your website? Hotjar makes it possible with heatmaps, recordings, and forms analysis. See where users click, scroll, and drop off, giving you valuable insights to improve your conversion funnel.
- Microsoft Clarity: Similar to Hotjar, Microsoft Clarity offers session recordings and heatmaps, but with the added bonus of AI-powered insights to help you understand user behavior on a deeper level.
Data analysis tools
- Google Analytics 4 (GA4): The king of website analytics, GA4 provides a comprehensive view of your website traffic and user behavior. Track conversions, analyze user journeys, and identify areas for improvement with this powerful data analytics tool.
- Userpilot, Fullstory, Mixpanel, Amplitude, Pendo, Heap: Each of these tools offers unique functionalities for analyzing user behavior and optimizing your funnel. Research and choose the one that best complements your needs and tech stack.
How to overcome challenges with conversion funnel optimization
The road to conversion success isn’t always smooth sailing—even the most meticulously crafted sales funnel can face some not-so-fun challenges. We’re here to equip you with the knowledge and tools to navigate these obstacles and optimize your funnel like a pro. Let’s look at how you can tackle some of the most common conversion challenges.
Misalignment
The problem: Imagine your sales and marketing teams are working on different islands. Inconsistent messaging, missed opportunities, and wasted resources become unwelcome guests at your conversion party.
The fix: Establish clear goals, roles, and expectations for both teams. Foster a feedback loop where insights, data, and best practices are shared regularly. This way, everyone’s rowing in the same direction towards your conversion destination.
Low conversions
The problem: Disappointingly low conversion rates at each stage of your funnel? This could indicate a misdefined target audience, an uninspiring value proposition, or dull, unengaging content.
The fix: Market research is your friend. Customer segmentation and persona development will help you understand your ideal customers’ pain points, needs, and desires. Craft a unique selling proposition that screams the benefits of your product or service, and create content that addresses your customers’ questions, concerns, and motivations.
High churn
The problem: High customer churn rates can leave you feeling like you’re constantly filling a leaky bucket. This might mean your retention strategies are weak, or your product/service isn’t delivering on its promises.
The fix: Measure and monitor your customer satisfaction, feedback, and loyalty metrics. Identify the reasons for churn and dissatisfaction. Implement retention and loyalty programs that offer value, support, and incentives to keep your customers happy and coming back for more.
Resource restrictions
The problem: Limited resources can feel like a constant battle. Your reach, impact, and scalability might be suffering, hindering your overall performance.
The fix: Prioritize and optimize your resource allocation. Focus on impactful and cost-effective activities and channels. Don’t be afraid to leverage automation, outsourcing, and partnerships to streamline processes, reduce workload, and expand your capabilities.
Rapid market changes
The problem: The market, customer behavior, and competition are always changing and evolving. This can leave your strategies outdated and ineffective, jeopardizing your competitive edge and growth.
The fix: Stay updated and informed on the latest trends, insights, and best practices in your industry. Be an agile marketer, constantly testing, measuring, and optimizing your sales and marketing tactics.
Skill gaps
The problem: Skill gaps in your sales and marketing team can stifle your quality, creativity, and innovation. This ultimately limits your potential and results.
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The fix: Assess and identify strengths, weaknesses, and needs within your team. Provide the necessary training, coaching, and mentoring. Attract and retain top talent, fostering a culture of learning, collaboration, and excellence. Don’t be afraid to embrace A/B testing as a way to explore creative new options (it’s easier than you might think).
Remember, conversion optimization is a continuous journey. By acknowledging these challenges and implementing the right strategies, you’ll be well on your way to building a thriving sales funnel that converts like a champ.
Better conversion funnel = more clicks = greater success
You’re now equipped with the knowledge and strategies to transform your funnel from a leaky pipe into a conversion powerhouse. But remember, the journey to conversion domination is an ongoing quest, and you don’t have to go it alone.
With easy-to-use and flexible landing page creation, tons of conversion-optimized templates, built-in A/B testing, and automatic AI-powered conversion optimization, Unbounce is here to guide you along the path to more clicks, higher conversions, and a thriving business.
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