How to Create an e-Commerce Sales Funnel

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Sales Management : 9 min read

How to Create an e-Commerce Sales Funnel

Imagine a world where every online shopper who visited your e-commerce website put a bunch of items in their cart, and then they—wait for it—completed checkout.

What a world that would be, eh?

The reality is, however, that just over 3% of e-commerce website visits actually convert into purchases.

e-commerce website conversion statistics

The image above from Smart Insights shows that out of the total number of visitors to your site, less than half get to a product page, only about 15% will add a product to their cart, and just over 3% of them will complete the purchase.

Bummer.

This small percentage of completed transactions goes to show you how important having a well-crafted e-commerce sales funnel is to convert as many of those website visitors as possible into paying customers.

Keep reading to learn how to create an effective e-commerce sales funnel for your business (or strengthen an existing one).

What is an e-commerce sales funnel?

An e-commerce sales funnel is a multi-step process that consumers go through, from first coming into contact with your brand to eventually becoming a paying (and hopefully a repeat) customer.

Like any standard sales funnel, it’s made up of four stages: Awareness, Interest, Desire, and Action (also known as “AIDA”).

standard sales funnel
Your mission: to get as many of the leads that come in to the Awareness stage make it down to the Action stage (in other words, get people to buy things).

Then, continue to nurture your relationships with them in order to retain them, so they stick around as long-term customers (who make repeat purchases).

Optimizing your e-commerce sales funnel empowers you to better control the outcome of your sales efforts, including your conversion rates.

A critical part of sales funnel management in general is having appropriate content set up at each point where a lead may interact with your company.

We’ll get into all the stages of an e-commerce sales funnel in more detail next.

Here’s how to create a solid e-commerce sales funnel.

Stage 1: Awareness

In the Awareness stage, leads have just discovered you exist.

Your goal here is to keep reminding them you exist until you get them to the next stage: Interest.

Remember, less than half of the people who visit your website are going to make it to a product page, so it’s important that you’re generating as much traffic to your site as possible.

In this stage, leads have just recognized a need or desire they have and are shopping around for options to satisfy it. Your brand is just one of many at this point.

So, not only do you need to generate traffic, but get them to stay on your site once they get there. Show them that you’re the solution they’ve been looking for.

Content and tactics that tend to drive leads effectively in the Awareness stage are:

  • Ad campaigns: Pay-per-click ads, Google-responsive ads, and paid ads on appropriate social media platforms such as Facebook, Instagram, or Pinterest are all ways to build brand awareness and drive traffic to your website.
rove concepts ad
An example of a paid responsive ad by Rove Concepts.
  • Social media: It’s important for e-commerce brands to establish a social media presence as it’s a great place to have two-way interactions with both your potential and existing customers.

  • Events: If you’re just starting out, holding a grand opening sale can be a great opportunity to attract new customers. You can let people know about your event on your company’s social media accounts and invest in some paid ads as well since your follower count likely won’t be very high yet.

  • SEO content: Boost your website’s organic search result ranking by producing high-quality web content relevant to your product offering. Starting a blog or creating how-to tutorials are two great ideas for your SEO efforts.
home depot how-to content ads
Home Depot produces helpful how-to content featuring products they carry which helps organically boost their SEO. 

Use Google Analytics to figure out which of your content drives the most traffic to your website and what visitors do once they get there.

One thing to look at in particular at this stage is your bounce rate: do they stay on your website or leave immediately?

If the latter, your traffic source might not have given them an accurate depiction of what to expect on your site, or your site didn’t live up to their expectations. You may want to tweak one (or both) of them and see if it helps reduce your bounce rate.

Stage 2: Interest

At this stage, your brand’s caught the attention of a lead and they’re considering buying from you.

Your goal now is to get them to shop your website and hopefully add some items to their cart.

The touchpoints you should focus on in this stage are:

  • Capture-lead form: Put a newsletter sign-up box on your home page (here are other ways to get signups) or even have it pop up for new website visitors encouraging them to enter their email address to receive deals straight to their inbox. You could incentivize this by offering a discount off their first purchase or entering them into a draw to win a gift card.

Pro-tip: Don’t ask for too much information in your lead-capture form or people will be less likely to fill it out. Usually, just an email address should be enough.

steve madden popup
Steve Madden greets you with an offer to save 20% off your next purchase within seconds of visiting their website. All you have to do is provide your email address.
  • Nurture emails and newsletters: You should have an email automation system in place that sends your website visitors a cadence of emails to begin building a relationship with them (as well as establish familiarity with your brand).
lush product e-newsletter
An example of an e-newsletter from LUSH that builds product awareness.

Stage 3: Desire

At this stage, your lead knows what they want. They put it in their cart and everything.

Your goal now is to get them to pull the trigger and say yes to the dress (or whatever it is that you’re selling).

Here’s how to do it:

  • Targeted emails: Sometimes a lead will add something to their cart then leave (aka. “cart abandonment”). They clearly wanted that product, so shoot them an email to remind them to bring it home!
structube targeted emails
Structube will send you a series of product-specific emails reminding you to complete your purchase.
  • Targeted ads: Your online ad audience should include people who previously visited your website. This will help ensure they don’t forget about you.
amazon targeted ad
Amazon does an excellent job with their targeted ads, reminding you about the exact products you were viewing.
  • Discounts: Offering an exclusive promo code may incite your lead to complete their purchase as well as instill a sense of urgency to do it soon.

Stage 4: Action

Alright, they’re about to enter in their payment details. You’re almost there!

Your goal at this stage is to make the checkout process as smooth as possible.

Remember, only about 3% of the people who enter your sales funnel make it through checkout. It’s crunch time.

You want to make sure your checkout process is fast and simple. The more steps involved, the more chances there are of cart abandonment.

Here are some tips for creating a good checkout page:

  • Make sure to clearly communicate shipping costs before checkout
  • Support multiple payment options (credit card and PayPal are the most popular payment methods)
  • Add a progress bar so users know how far along they are in the checkout process
  • Add trust badges to reassure them that their information is safe (Norton and McAfee have scored pretty well among consumers in the trust department)

Going back to our good friend Google Analytics, use it to analyze drop-off rates on your checkout page and to help you recognize pain points in the experience, then address them accordingly.

Continue to track and improve your e-commerce sales funnel’s performance.

google analytics shows your ecommerce sales funnel's performance
Google Analytics is your e-commerce sales funnel’s BFF.

To recap, we went over all the stages that make up your e-commerce sales funnel and the types of actions and content to take in each one to continue driving leads down it.

You’ll want to keep track of what’s working and what isn’t, so tracking performance is crucial. In particular, keep an eye on the following four metrics:

1. Users by source

You want to know who’s finding your site, and where they’re finding it. This will help you determine which traffic sources to focus your marketing spend on.

For example, if the majority of your traffic is coming from your Google-responsive ads, concentrate your ad budget there to maximize your ROI.

2. Bounce rate

Like we touched on previously, your bounce rate is the rate at which users visit your website then exit the page right away. A high bounce rate is concerning because it means your landing page isn’t interesting or user-friendly enough for the visitor to stay online and browse.

You can reduce your bounce rate by upping your website’s “stickiness.” A few ways to do this:

  • Have a clean, simple website UI
  • Have a clear navigation and/or links and CTAs to lead to other pages on your website
  • Provide immediately visible value by building your landing pages around what they care about (e.g. elaborate on the messaging on the ad that brought them there in the first place instead of showing more random ads or an “about us” blurb)

3. Conversion rate

Of course, you want to track your conversion rate to see what percentage of visitors who enter your sales funnel eventually turn into paying customers.

Apply the tips we went over in this article to up your conversion rate. You can also try A/B testing multiple tactics in order to see which content or marketing initiatives make the biggest impact on your conversion rate.

4. Cart abandonment

A high cart abandonment rate means there’s a problem somewhere in your checkout process. Even if your checkout process is seamless, you should still keep on eye on this metric regularly to make sure no technical issues are affecting checkout either.

If people are leaving your cart page, find out where it is they’re dropping off. For example...

  • If they’re dropping off when shipping information is revealed, you might not have made shipping fees clear enough from the get-go or your shipping costs are too high.
  • If they’re leaving on the payment page, maybe their preferred payment method isn’t supported or they don’t feel your website is safe enough to enter their credit card information into.

Regardless, don’t give up on your leads at cart abandonment. Send them a follow-up email reminding them to complete checkout—maybe even offer them an exclusive coupon code for doing so.

May no shopping cart be left behind.

Okay, there’ll definitely still be some abandoned carts, but these tips will help you convert over 3% of them—which is more than your average e-commerce company can say!

Remember: make every stage of your sales funnel about the consumer.

  • Your ads in the Awareness stage should emphasize why clicking on them will benefit the consumer.
  • The content you create and share in the Interest stage should be of value to them.
  • In the Desire stage, remind them of all the ways your product will improve their life.
  • In the Action stage, reinforce the fact that they made a good decision—and continue working at building your relationship with them so stick around as repeat, long-term customers.

In other words, truly put the customer first. Get this down and you’re well on your way to e-commerce sales funnel greatness.