A marketing conversion funnel is simply the path users take to becoming your clients. Whether you have taken the time to identify this or not, the marketing conversion funnel exists for every business. Some businesses have ten funnels, others just one. Regardless of how many funnels you have, it is imperative you become aware of the path your clients are taking so you can optimize it. This gives you insight and ultimately control over what is driving sales for your business!
Check out this image of a standard conversion funnel, there are 4 phases:
As your contacts go further down the funnel, they become more interested in your business and are more likely to convert into a client. However, unlike the funnel you use in your kitchen, in a marketing conversion funnel, not every contact makes it to the other end. Each step of the marketing funnel has a drop off also referred to as a 'conversion rate'.
For example, when you email your list of contacts promoting an online seminar, you are starting a conversion funnel for them to take action and sign up for the seminar. The first step in the funnel is simply opening the email, next it's clicking on the email. You lose some of your contacts at each step, but those that continue down the path are closer to taking the action you want them to take.
Wouldn't it be nice to know where your next sale is coming from?
Optimizing your conversion funnel might include removing one of steps in the process, or updating your headlines or making the form shorter to sign up. In general, reducing friction makes it easier and more likely to gain conversions and ultimately sales. While sometimes improving conversion can reduce the quality of your contacts or leads, you are still more likely to increase sales if you can increase the number of contacts making it further in the funnel. It's a numbers game.
Here's a checklist that you can follow if you haven't setup accurate reporting and tracking for your conversion funnel.
Let's dive in with an example:
Susan runs a Massage Therapy business in Colorado. She currently has 2 locations in Denver and is looking to expand into Boulder. She recently started running pay-per-click ads on Google to promote her business and find new clients to book appointments. Her campaign is running at a profitable margin, but her sales are low.
Here's what her initial conversion funnel looked like:
Susan began working with Meghann in her coaching program and they optimized her marketing conversion funnel as follows.
As with any paid marketing channel, it's important to consider what will make your ad stand out from the competition and increase your conversion rates to bring more users further through the funnel. In this case, they decided to offer a coupon to run during a holiday for $25 off the first session.
So, we know Susan got more clients, but what about her ROI?
Because Susan was able to optimize her conversion funnel for this specific marketing channel, she was able to book 15 appointments where she only booked 3 before. However, she generated 250 clicks instead of just 100 initially, so it was more expensive for her to generate those appointments and she was earning less on each booking.
Despite decreasing her revenue per appointment, Susan realized a 275% increase in her revenue. Where she might have thought google ads were too costly to scale before, she can now ramp up her campaigns to drive more traffic in Denver. Now that she's proven this channel can work for her business, she can also run a test campaign in Boulder to gather data around how much business she might be able to generate in Boulder!
She can continue testing the $25 off coupon against a $10 off coupon to see how that impacts her initial conversion rates, but also the rate of follow-up bookings.
TIP: Take caution when offering discounts, don't offer steep discounts that take away your margin and only attracts those looking for a deal. Also, as part of the performance evaluation of this promotion, consider the rate of rebooking for clients generated via the promotion as compared to clients from your organic sources. If it's too low, the discount needs to be restructured or consider offering a freebie with a full price purchase instead.
You can always be testing and optimizing your conversion funnel to make improvements, and it's important to stay ahead of the curve on any downward trends or changes to your funnel. With accurate reporting and tracking, this is as simple as monitoring a report on a weekly or monthly basis.