Comment: Is your funnel a basket case?

Conversion funnels are important and getting them right in eCommerce can make a significant difference to revenue generation. By understanding why they fail, you can deliver significant improvement in performance: in one client we achieved £1 million per annum uplift from a single test.

Even the best funnels leak. The key questions are: what degree of leakage is unavoidable and where is the most leakage acceptable?

The latest figures suggest that the average UK retail eCommerce site in 2015 had a conversion rate of 3.95% (source: Smart Insights). In other words for every 100 ‘shoppers’ less than four of them buy.

There are no generally accepted ‘good performance’ standards but in our experience if your site as a whole is converting at 6.5-8% then you are likely to be a top quartile performer. Having said this, even these rates can be improved further with an in-depth understanding of customer behaviour on the site.

Any site average, however good, bad or indifferent, will hide a range of performance that will be determined by the sales funnel through which a shopper progresses during an eCommerce engagement. The larger the site, the wider the range of products or services on offer, the more complex the transaction, the greater the number of transaction options, the result will be a greater number of funnels.

Funnels and optimisation

Optimisation is the process of improving the commercial effectiveness of an eCommerce retail engagement. The most effective way of focusing on performance of the site is not to look at the overall conversion outcome, but to identify the main ‘customer journeys’ and map them out in funnels from the chosen point of entry to the website through to completing the transaction (sale or lead generation). When you look at the flow through the funnel, just as with human circulation analysis, what you are interested in are the ‘blocked arteries’: the points where traffic stops flowing through to the next stage and exit either the funnel or the site. Blocked arteries in eCommerce sites are often found in three places:

These three problems can be characterised as follows:

Right customer – wrong execution

Different shopping missions trigger different behaviour and are quite often associated with different points of entry into an eCommerce site. Browsers are more likely to land on home and category pages whilst active shoppers who know what they want are more likely to land on a product page. Losing an active shopper is the one thing you don’t want to do; yet many sites manage to achieve this.

One of the major factors that will serve to confuse the customer who is looking to buy is unclear product presentation. Detail is important in a product page: it does need to be clear and concise but it must provide the customer with the key information that will persuade them to add the product to basket. Typical errors include placing important product details below the page fold, opaque pricing, hidden costs that get revealed during product selection (e.g. costing more for a particular colour or finish) and a failure to highlight features and benefits.

Right customer – wants to buy but won’t buy

In our experience it is common to see funnels where many more products get selected and put into baskets than ever get bought. Effective eCommerce sites focus on closing the sale and work hard to discourage their customers from leaving the funnel without transacting.

These departures are normally associated with the ‘basket’ page. Typical errors here include presenting too many options for the customer to leave on this page. At this point the customer is here to do one thing only, buy – so why would you offer them the opportunity to divert from that mission? Some sites offer a choice when any item is placed in a basket of continuing shopping or checking out – actually for someone shopping for several items that can be irritating and a distraction. If the customer is buying, leave them to decide when to checkout.  If they leave something in the basket, send them an email chaser.

Many retailers also fall into the trap of offering last minute suggested products that can often dominate a checkout page in an attempt to get their customers to spend more. This rarely works well and it is far more important at this stage to get your customers to process their payment and close the sale. Establish the relationship, build trust and then engage them to try and encourage them to re-visit. Don’t however email them every day.

One final thought – there is proven value in informing a customer at this stage what other customers also bought – this helps us all remember the batteries or spot those shoes which match your chosen bag perfectly.

Right customer – wants to buy but can’t buy

The last major problem comes from customers who fail at the payment stage. 

In our experience three things can confound customers just as they get to the checkout. The first is how you handle voucher codes. If you are currently running a sales promotion tell people at the start of the journey and give them the code to use. By featuring a prominent voucher code box on the checkout page without the code, you are not only encouraging revenue depreciation but customers are more likely to open a new tab or page in search of any codes they can find, often leading to significant drop off in the funnel.

Mishandled delivery options often coupled with surprise costs can scupper the best of executions. Keep it clear and make sure that if there are multiple options, they are easily understood.  If you use a courier where there are parcel collection points or they offer variation options post purchase, then let the customer know – it helps them feel they can change arrangements if necessary. If it has to be signed for, tell the customer up front.

Finally, your own fraud protection arrangements can conspire against you. Be clear about your own banking arrangements and the degree to which your payment services provider is setting decision rules that frustrate customers and drive them to other sites where with the same card they can complete the purchase.

James Hammersley is the CEO of Good Growth. He is also the co-author of ‘Leading Digital Strategy’, a guide to e-commerce strategy.