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Building Conversion Funnels posted on April 2, 2009

In today’s changing technological world, anything from buying a car to making a dentist appointment can be easily executed with the click of a button.

By Andreas Roell

Consumers are spending a significant portion of their day online. They hop from site to site during their paths to purchase, and if companies are tracking this browsing behavior, the end result is an overabundance of data that does not add up to anything meaningful. However, this information is integral in evaluating the effectiveness (or lack thereof) of a website. To avoid the collection of meaningless data, companies can institute a conversion funnel on their website to track and understand how user behavior translates into sales.

Overall a conversion funnel is made up of a series of microconversions where at each step in the funnel, site visitors make a decision to continue to the next step, leave the page, visit other content or exit the site entirely. Every page that a customer visits acts as an entry point where companies can guide users to answer a call to action. Incorporating this structure into a sites’ design ensures that each page has a purpose and action for users to take. Essentially each page can lead users to a conversion because each step has an impact on customer behavior which affects purchase decisions.

No matter how a conversion is defined—whether it is a newsletter opt in, purchase, request for more information or a phone call—marketers are in a better position to optimize their efforts if they know how and where users interact with a website. For example, if users continually abandon their “shopping cart,” companies can evaluate their site to make sure checkout information is prominently displayed and shipping information is straight forward. Presenting the customer with easy-to-use online processes bolsters any offline initiatives and bolsters the efficiency of an entire, multichannel campaign. Furthermore, by creating a positive website experience, companies increase the likelihood of making each unique visitor a loyal customer.

Building a conversion funnel may seem like a sizeable investment, but in actuality constructing a strategic, user-friendly site will increase marketers’ return on investment. Each percent lift in the funnel increases the return without the added cost of having to re-design the site. The best return comes from a site with the highest percentage of users at the last stage before conversion. For example, if it costs $2,000 to bring 100 people to the final purchasing page and out of those, 5 people make reservations, the cost per reservation is $400. However, if the online purchase process is made more effective, and 7 people make purchases instead of 5, the cost per reservation is reduced to $285. This reduces the cost per conversion by simply making necessary and effective changes to webpages without dramatically redesigning the entire site.

Digital marketing affords companies the ability to track minute user behaviors. This information then empowers marketers to optimize their initiatives to make sure that every dollar spent is eliciting desired behaviors. Every component of a website has the ability to drive conversions and support corporate business objectives, and with the use of an effective conversion funnel, marketers can firmly establish the purpose of each page and drive sales.

Andreas Roell is Chairman and CEO of Geary Interactive. Founded in 2000 by Roell, Geary Interactive is the leading REAL RESULTS digital marketing agency that provides nationally recognized, full service capabilities in a performance driven model. Outside of his roles at Geary, Roell is the regional governor of the American Advertising Federation and former San Diego Ad Club president.