A conversion funnel is a marketing tool that describes the customer's journey from becoming aware of a product or service to make a purchase. The conversion funnel allows visualizing the customer's behavior, which will ultimately lead to a purchase. The basic conversion funnel consists of four stages.
- Awareness — the person learns about the existence of the store or product.
- Interest — the person becomes interested in purchasing the product and studies its features.
- Desire — the customer wants to purchase the product and studies how to do so.
- Action — the buyer places an order and pays for the product.
Using the conversion funnel, a business can organize its work with customers by dividing the audience into clear groups. The company with a conversion funnel gets an idea of the customer's behavior. By being able to predict the customer's behavior, it will be easier for the business to plan its marketing activities. Without a conversion funnel, it is difficult to identify which customers and how you need to influence them. For example, who needs to be attracted to the product and who needs to be prompted to take action.
Depending on the business's activity, the funnel can be detailed and changed, new stages are added, special names are used, etc. The best option for creating a conversion funnel is CRM. Most accounting systems have suitable tools for creating funnels and provide additional opportunities for working with them. All company clients recorded in CRM will fall into the conversion funnel, and managers will be convenient to monitor customer movement through stages. Company employees will change the client's status depending on the conversion funnel stage they are in.
Additionally, a conversion funnel can be created using Google Analytics by setting up goal tracking. The analytical tool will collect data on specific customer actions and statistically describe their movement through the funnel. Thus, companies will find it more convenient to work with the audience, and it will be possible to personalize the approach to customers, taking into account their readiness to purchase.
Moreover, CRM allows analyzing the conversion funnel. Managers will see the successful and problematic areas of their conversion funnel. For example, it will be found that a significant portion of customers drops off at the penultimate stage, before starting to place an order. This information will help understand that there are some obstacles that prevent buyers from completing the deal. Perhaps the problem lies in the complex order form or the lack of integration with delivery services. That is precisely why the conversion funnel is so important — without it, the company will not understand the customer's path and actions.
