Today, more and more businesses require an online presence to remain relevant. In fact, many companies now exist solely through online storefronts, foregoing the costs of maintaining physical locations. This blog post will provide a guide on how to set up a B2C (Business to Customer) sales funnel, which is an instrumental part of any successful company, both in the short- and the long-term.
There are three fundamental metrics that you must track when establishing (and maintaining) an efficient sales funnel. Consider these the pillars upon which your company will be built. They are as follows:
Each metric requires testing, measuring, and investing time and money to prime your company for profitability and stability.
Traffic, simply put, is the amount of people who visit your webstore. They will come from many different sources, and it is important that you understand how people are finding you. There are many ways of attracting visitors, such as:
It is vital that you start out by measuring which ones work best for your company. When running tests on the various traffic channels, ensure that they yield measurable results. Without concrete data you will be left in the dark as to how people are finding your website, which means you will not be able to use that data to improve it, and subsequently your profits. Avoid being in that situation. Run reliable, measurable tests.
A good way of tracking your traffic is through Google Analytics, as you can set it up to measure visitor conversions, track where people drop off the site, which buttons they click on. All of which inform you whether they are taking the right actions on your website or not.
If you find that Google Analytics is not sufficiently in-depth for your needs, other tools exist, although they can be quite expensive. As such, only resort to them if you truly need them.
One such alternative (and very useful) analytics tool is Hotjar. It provides a series of measuring tools including heat maps of where people click, or recording live sessions when people visit your site. These allow you to measure your Call to Actions and see if they are clear enough for people to reliably use them. These also let you recognize patterns, which can help you identify where people drop off the site.
The key takeaway here is that you need to take all this feedback and use it to make your website better. Improve and adapt, using the feedback you gather to move in the right direction.
Watchers to Buyers
The Conversion Rate represents how many people, out of your total traffic, are buying from you. You want to turn visitors into customers, because otherwise you will not be making any money. This is arguably the most difficult step in the process, as you need to convince people to buy things on your store.
Extensive testing will be required: change the layout, play around with the buttons and font, make tweaks and changes to the user flow. All while measuring if any of these changes have any positive impact on your conversion rate.
Additionally, do not forget to measure your traffics quality. For example, people who arrive at your website through Google after having searched for a specific keyword are more likely to buy something from you when compared to someone who randomly arrived at your website. How people come to your webstore matters to the Conversion Rate.
The bottom line is that you need to AB test the store, accurately measuring changes to the conversion rate so that you can understand what is driving it, as well as what has positive and negative effects on it.
At last, we have Lifetime Value, which is the total revenue you will make from a customer until they are no longer buying on your online shop. LTV is all about reactivation, that is, bringing people back to your webstore and motivating them to buy from you after the first purchase. Please note that at this stage you are only working with existing clients through the following:
Your goal here is to get people to use your website as their go-to shop, so that when they want to buy something that you sell, they will go directly to you rather than using other channels, such as search engines or competing online platforms.
As before, it is imperative that you test methods you can measure, so that you can understand what drives people to return to your shop and continue to buy from you. As always, you must weigh cost vs profit. Ad campaigns do not write themselves, after all. However, keep in mind that acquiring new clients is much more expensive than getting existing customers to make recurring purchases.
As your business develops and grows, it is important for your company’s focus to change over time. When starting out you should prioritize increasing Traffic to your webstore. Once you have a stable amount of traffic, you should move on to developing your Conversion Rate until you have a sustainable pool of customers. With a customer base established, and the means to acquire new ones in place, you will then be free to shift focus to the Lifetime Value of your customers and getting them to make recurring purchases rather than buying once and never returning.
Finally, I would like to point out that although this guide has been written from the perspective of a company running an online storefront, the advice and points here are just as relevant for businesses working from physical locations.
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