What are funnel metrics? Why are they important?
A sales funnel is made of the different stages a customer goes through before making a purchase. By using sales funnel metrics, you can analyze which funnel stage is troublesome. A funnel demonstrates the path through which a prospect ends up becoming your customer. By determining the conversion funnel marketing stages, you can understand your prospect’s thought process. Additionally, you can strategize accordingly to improve your customer experience. However, you need to know the right funnel metrics to measure the success of your strategy.
Conversion metrics must be tracked in order to identify patterns, opportunities, and threats in the market. If you don’t have the right KPIs, you can’t evaluate your marketing performance. Funnel metrics can help you discover where you are losing your maximum leads or prospects. This way, you can optimize that stage of the funnel to reduce the loss of leads and improve your conversion rate. Comprehensive data analysis with accurate funnel metrics can help you to forecast as well. Marketers and product managers can use these metrics results to set their future objectives and goals.
Sales funnel metrics can help you know the success of your different marketing channels and communication tools. There are various software available that you can use to measure your funnel effectiveness.
Here, in this blog, we will discuss some of the major funnel metrics that you must know and measure.
1. Traffic Metrics
When the prospect gets to know about your business, that stage of the sales funnel is called awareness. Every day, so many people land on your site, but not even half of them end up converting. The main purpose of marketing strategies is to lead customers to make purchases.
Traffic metrics give you an insight into how many people are landing on your website and which brand marketing campaigns are working for you. Measuring website traffic and comparing it with previous data can help you understand how your customer acquisition plan is performing.
For instance, if you execute email marketing, then you can use funnel metrics to measure its outcome. You can evaluate the click and open rate of emails. If you are doing cold calls, you can measure its impact by using metrics like avg call duration, calls made per hour, and the number of appointments set or closures made.
Different sources of driving traffic to the website:
- Organic social media traffic
- Paid social media traffic
- Organic search engine traffic
- Traffic from backlinks on other websites
- Paid search engine traffic
- Traffic from partner websites
- Paid print media ads
- Paid TV or radio ads
You need to gather the metrics of each of these channels to assess which one is giving you the highest return on investment. You should know which channel is bringing you the maximum traffic and prospects. Then, you can segment the acquisition channels based on their outcomes. This way, you can make smart and wise investments that provide you desired results.
These funnel metrics conversion rates can help you compare the returning customers or new visitors. From this information, you can understand how well your tactics are performing in the awareness stage. More returning customers indicate that people are satisfied with the products or services you are providing. A high number of repeat customers also shows that you are utilizing effective marketing tools to keep your customers engaged.
2. Conversion Rate
The conversion rate gives you the percentage of people who end up becoming your customers out of the total website traffic. For example, if your website traffic is 100 and 22 people make a purchase, your conversion rate is 22%.
In simple terms, the higher the conversion rate, the more effective your sales funnel is. It also signifies that your marketing strategies and tactics are doing a great job for you. However, the conversion metrics don’t always signify products purchased or sales made. The conversion depends on the action that you want the customers to take. For instance, sign-up, newsletter subscriptions, form filled, or any other action.
In some cases, the sales cycle for a product or service is long. So, the conversions are divided and measured at each step. For example, you are a software development company, and you build custom software for businesses or enterprises. Then, your sales cycle will be long and involve many individuals and decision-makers at different stages. Therefore, to measure the effectiveness of each stage, you can use conversions in distinct meanings.
By identifying the loopholes in your different sales funnel stages, you can make improvements. This will ensure that you lose fewer prospects at each stage and obtain a higher conversion rate.
- Related: Conversion rate optimization
3. Average Order Value
Average Order Value( AOV) is one of the important funnel metrics that you must measure. AOV means the average amount spent by a customer each time they place an order on your website. You can calculate AOV by dividing the total revenue of your company by the number of orders placed by the customers in a given period.
AOV is a funnel metric that shows you how important a customer is for your business. If your Avg Order Value is less, then you should try to identify & target the customer base that is capable and willing to spend more.
There are various ways you can increase your AOV, such as through promotions, paid ads, upsells, cross-sells, etc. While AOV tells you the value of each customer, you should also try to increase their average Customer Lifetime Value (CLV). As you know, acquiring new customers can cost you five times more than retaining the existing ones.
Wrapping It Up
Optimizing the sales funnel can help you in boosting your conversion rates. You can use the different funnel metrics that we have given above to measure the effectiveness of your sales funnel. You can analyze these metrics and make alterations to your strategies accordingly. By doing this, you can make your customers’ journey easy and smooth. However, another way to do it is by understanding your users’ behavior and catering to their needs, wants, & expectations.
WebMaxy Analyzer is one of the best tools to measure marketing effectiveness. It can help you to create funnels on your website and analyze them as & when needed. Additionally, it comes with an array of features like session recordings, heatmaps, surveys & polls, feedback, funnel view, form analytics, A/B testing, push notifications, advanced integrations, and so on. Schedule a call with our experts to get more information on WebMaxy Analyzer, or email us at email@example.com.
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Here’s everything you should know about funnels metrics…
A conversion funnel refers to the marketing conversion funnel stages through which a potential customer goes through to become your customer. A conversion funnel has different stages, like awareness, interest, desire, and action.
You can use WebMaxy Analyzer for funnel management. This tool is free and has many different features like session recordings, heatmaps, surveys & feedback, user insights, form analytics, and so on.
You can measure the marketing funnel with the help of various funnel metrics like traffic metrics, cost per acquisition, customer lifetime value, conversion rate per channel, and average order value.