We’re going to cover how to measure the results of your sales funnel using analytics and other visual representation tools. And that was a lot of marketing mumbo jumbo, and there’s going to be a little bit of that marketing mumbo jumbo and jargon in this episode. I promise I will define everything as best I can.
I want this episode to be a resource and a tool. And it’s going to be a little bit not heavier, it’s just going to be a little more thinking-based. And it’s going to be a little more numbers-based. I’m going to be talking about knowing your numbers and why that’s important. And I think we’ve all been in a mastermind or a Facebook group with someone who clearly does not know their numbers. That’s why this resource is here.
That said, let’s talk first about what a sales funnel is.
A sales funnel is typically used to measure a client’s buying process or a customer journey. So that is the journey from them discovering your brand, to them making a purchase, whether that purchase is buying a pair of shoes online, or hiring you for a very high dollar service. That is the definition of the sales funnel. It’s really just marketing fancy speak.
It basically means connecting the dots between:
- when they heard about you,
- to when they considered you,
- to when they hired you.
And a sales funnel is going to have stages where you can, quote, ‘’Build a relationship with the customer.’’ End quote. And I am sarcastically saying quotes because I think many people get that part wrong.
Building a relationship does not mean spewing information toward your potential client; it means taking the time to build that know, like, and trust factor up so they actually feel great about working with you or buying from you.
The length of your sales funnel is going to be dependent on what kind of product or service you’re offering. And it might also depend on what industry you’re in. I think we can safely assume that $27 products typically require a shorter sales cycle than $5,000 products.
So with that said, a customer’s goal or client’s goal at each stage is to move on to the next stage until they eventually convert. However, fewer and fewer people will move on to that next step. And that is why we use the visual of a funnel.
I think we’ve all seen a kitchen funnel; if you despise cooking, and your whole family also despises cooking, and you’ve never seen one, then you can visualize a toilet bowl because I am sure we’ve all seen one of those. It starts wide at the top and eventually narrows down. Because you are not marketing to everybody. If you are marketing to everyone, you’re probably not helping anyone. So you start wide at the top. And next, people are like, I’m not like loving this, I’m out. And the next layer down a few more people leave. And the next layer down, a few more people. Because when you get to that narrow part at the bottom, those are your people, those are your best clients. And there aren’t nearly as many of them as people are searching for the general broadness of your service in the world. It’s okay; that’s how it’s supposed to be; we want to be able to help people that were truly aligned with.
All of that said, defining your sales funnel will help you better understand what you should be doing at each stage to give your clients what they’re looking for, so you lose fewer people along the way.
Yes, we want to only help a few people comparatively. But if you can help a few, plus a few, and still do a great job, there’s nothing wrong with that. So let’s try not to lose people unnecessarily along the way. That’s why defining the different stages of our funnels helps us do that. It helps us measure it, it helps us optimize it, and it helps us help more people. So marketing funnels are like metrics. They can help you manage the time that you put into all this and the resources you’re using to help those people in a more efficient way.
Before we get into concrete examples, I need to answer a couple of frequently asked questions about sales funnel analysis. So sales funnel analysis is going to help us identify three things.
- where users drop off,
- when is the best time to optimize for conversions or purchases or hiring
- knowing what kind of content or offers should be placed in specific areas
Before I answer the next frequently asked question here, I just want to acknowledge some businesses are incredibly, so simple, like they have one offer. Other businesses have, you know, an entry-level offer a mid-level one, and kind of a high-touch offer. And most businesses have some combination of those two. And then some businesses have like 200 offers. I am not going to be referencing much of that in this article because those aren’t my people. I want you to think of someone who has a kind of simplistic business for ease of examples here. Maybe someone has a lead magnet, and an entry-level and a mid-level and high-touch offer.
So moving on, that’s where our examples are going to be coming from.
What is sales funnel analysis?
It is you taking the time to work out which part of your sales funnel needs improvement to get more clients making a purchase. And this guide is going to answer a bunch of different aspects of that so we can track and analyze a sales funnel.
So which sales funnel metrics should you be using?
Most people are going to say conversion rate. I don’t think it’s the be-all-end-all. Sometimes it’s not the thing that’s the bottleneck or the holdup in your world. But the conversion rate is often said to be the most important metric to look at when it comes to analysis. And for sake of this, we’re going to talk about a whole funnel conversion rate, ie, how many know about your offer, divided by how many people hit your website as a whole. And then, if you want to get that to a percentage, you just multiply it by 100. So in a sales page example, if one hundred people hit your sales page, and five buy, you have a 5% conversion rate. And then we’re also going to talk about churn rate that’s measuring the rate at which users stop paying for revolving services like memberships, for example.
What is a good conversion rate?
The numbers are going to vary, again, depending on our industry, depending on what kind of funnel, but most people are going to say anything above 2% is a good sales funnel conversion rate.
When we’re talking about that, we’re talking about the whole funnel, right from your landing page to your destination page. The destination page is where their purchase confirmation is. If we’re talking about Google Analytics, for example, that destination page is where you’re going to enter the URL in the goals detail box.
I like to remind everyone that each step of the funnel will have its own conversion rate. So if you have a sales page, and then an order form page, and then an upsell page, and then a confirmation page, you’re measuring three different conversion rates, but then you’re also measuring the overall conversion rate for the whole funnel. So when I say 2% is a good funnel conversion rate, that’s the overall funnel rate. And again, that’s broadly generalized across all industries.
When we’re talking about optimizing a sales funnel, an industry-standard rate may or may not be anything related to what you are trying to do. My favorite example of that is email open rates (which have their own inherent problems). But if 20% is the industry standard, and you’re getting a 23%, open rate over the last month, you’re probably going to be like, “Heck, yeah!” But if you used to be getting a 30%, open rate, is that improvement? I don’t think so. So you want to know your own numbers. To do that, you need to be measuring consistently.
Tools to measure conversions
I would be remiss if I did not mention Google Analytics; it is the standard analytics tool. There are others out there. Some of them require payment, and some of them do not. Google Analytics is technically free. (But keep in mind that you are the product when you’re not paying any money for the product.) So you know, you may have privacy concerns, you may have reasons you don’t want to be using it. I personally am comfortable with it. It’s very data-rich, and it can be really hard to find the information you’re looking for without extensive research. I learned a lot about that from Jennifer Grayeb of Measure and Maximize and the Nimble Co; she is really good at breaking that kind of stuff down and easy-to-digest pieces. And that’s where I learned how to build dashboards. It’s where I learned how to analyze Google Analytics. But everything I say about analytics in this particular content piece can be done with other analytic programs as well, just as a heads up.
How to visualize the sales funnels for your website
When we’re talking about that, I don’t actually want you to look at analytics at all. I want you to first brainstorm what you want your people to do.
Let’s say you want to move people from Tik Tok to downloading your lead magnet (or your free gift). We are looking at using your content, directing them to a landing page, and then the opt-in to a confirmation page. That’s what you want people to do, you want people to opt-in for your gift. So we really only need to know one thing. What percentage of people who saw your landing page actually opted in?
You might want to look at a second thing, what percentage of people who looked at that content actually went to the landing page? That would be a second thing to look at. You could probably look at, you know, 20 different pieces of data in Google Analytics to get that information. The key is knowing how to, but also why–why look through 20 different things when you could just look at a dashboard that says “this converted at this percent.”
That’s why we want to brainstorm, what is the question we’re asking, and what we actually want to get out of this. We can visualize a sales funnel using tools like Google Data Studio which connects nicely with Google Analytics. It gives you a visual way to represent those questions and answers.
If I am thinking about a launch of a program, I want to know:
- what my funnel is converting at
- which content is doing the best job at directing those conversions
That’s just two things. My dashboard doesn’t need to have 17 pieces of data; it only needs two. So we want to use our brainstorming to decide how to visualize the data.
Other examples here are how many people who downloaded my lead magnet went on to register for my webinar. When I actually built a dashboard to do that, I had to create a highly complicated spreadsheet, and, honestly, quite annoying, in Google Sheets. But when I got to the dashboard part, I just had two numbers. How many people downloaded the lead magnet. And then over a period of 60 days, how many people went on to register for the webinar after an email sequence? That’s all I needed to know. That information gave me the answer to whether that lead magnet was actually working for my business or not.
Here is another example, how many people who clicked on my Facebook ad bought my SLO (or my self liquidating offer)? Again, there are lots of things we can measure in between. But really, all we need is those two numbers.
Less is more when it comes to visual reporting.
Okay, now that we know how to look up the information, and we know how to visualize it or hire someone to visualize it for us, what are we doing with that information? Having information is great, but if you’re not going to do anything with it, don’t invest the money and time to set it up.
Turning insights into action with sales funnels, Google Analytics, and Google Data Studio.
You can experiment with how to fix the choke point or the bottleneck in your sales funnel.
To do that, you just need to have a specific process for each stage of the buyer’s journey. And you can have funnel reports, they become really invaluable tools for figuring out when people drop off on your website and why.
Optimizing your sales funnels
When we’re talking about that, we need to talk about the ongoing conversion funnel optimization process, and holy crap, that was word salad–so let’s break it down.
- Conversion, we talked about that, it’s how many people saw the offer versus buying it.
- Optimization is testing and tweaking over time, one thing at a time.
- Funnel, we already know what a funnel is.
On a longer sales page, you’re going to have
- a headline and
- announcement of the problem
- digging into pain points
- offering a solution
- announcing the product and saying, “Hey, this is the solution.”
- a disclaimer
- a call to action.
If I went and changed five of these things all at once, we would never know which one was the problem. And if we don’t know which one is the problem, we don’t know how to not make that same problem happen in the future.
What if that problem was being used in all of your social media content as well, right? So you want to test one thing at a time. And yeah, that’s going to take time. This is not something you can do in a day.
And that’s why you are constantly going to be optimizing your sales funnel, ie, your website, your sales pages, your everything, right? Because you’re constantly optimizing it, you are also constantly measuring it. You want to keep it simple and easy. I’m a data fiend, and I will happily pour through all of the numbers. But we just want to know what your KPIs or key performance indicators are. We just want to know which things to focus on.
Key Performance Indicators
What key numbers can I look at to indicate how this funnel is performing for my business?
So for a SLO or a sell self-liquidating offer for one of those funnels, the KPI is:
- pay attention to are how many people hit the main sales page
- how many people made it to the order form I took action
- how many people purchased
If I also offered a bump or an upsell offer in that funnel, I would want to see which percentage of people were doing that as well. So, if 1-3% of people purchase the main offer, I would consider it a valid offer. However, if I were running ads to it, I would aim for 10%. Otherwise, it wouldn’t be profitable, and it might not even liquidate. It would probably want 25% of the people buying the order bump and 10-12% purchasing the upsell offer. If I was running ads, I want to see a click-through rate of 1.5 to 2% telling me that the ad was working. If I was running an evergreen webinar funnel, I want to see 25% of people registering for the webinar.
And those are just a couple of different kinds of funnels, friends. It’s easiest to see these numbers, again, not on a spreadsheet and not by having to look up the numbers in like your sales to cart tool and Stripe and your email provider, but seeing them at a glance.
Number salad and word salad are not fun
And that’s why we make things nice and easy and visual. This is actually why I got into building dashboards in the first place, I wanted an easy way to see how my SLO was doing without, you know, inducing a headache every single time. It’s easier to see the bigger picture of a profitable sales funnel and conversion rate tracking and revenue tracking and tracking in a dashboard format.
Here’s another example: if you’re running a membership, you would want to measure churn (or how often people leave that membership). Things you might want answers to:
- Are they leaving at a certain time of year like August and September? If so maybe you can provide better, more targeted value for support around the beginning of the school year.
- Or if you see most people dropping off after four months of being in the membership, you know that you need to write an engagement campaign or offer further portions of support at that point so they recognize they’ve not yet gotten all the benefits they are going to get out of the membership.
These are some common funnel mistakes. And it’s a running joke amongst my crowd that when a launch doesn’t perform well, you blame the ads manager and if there’s not one of those blame the copywriter. But the reality is…
Things to look at outside of sales funnels
There are so many moving parts to launches and sales funnels are a big chunk of that, but they’re not all of it.
1. Was the offer even validated, was it sold organically first?
Not knowing your numbers can result in a huge problem. Let’s look at a SLO since I see the most problems with SLOs. Let’s say a woman named Jane has a SLO price of $37. There’s an offer for the bump, there’s an upsell. And she’s got 2000 Instagram followers and 500 people on her mailing list. So she thinks she’s got an audience of 2500. We’re assuming a 5% sales rate, meaning five out of every 100 people who see the main offer will buy it (and that’s a pretty good rate–you already heard anything more than 2% is pretty good).
Jane probably thinks, “Oh, I’ve got 2500 people and you know, 5%, ooh, ooh, I am going to sell this to 125 people.” But that’s probably not going to happen. Because for Jane to sell that many, she would need 2000 people to land on her sales page. And let’s say only 20% of her email subscribers saw the email about it, but only 1% of them actually clicked on the link. So that means only five people landed on her sales page. And let’s say only 6% of her Instagram followers saw her post about it, or 120 people, and only 2% of them clicked on the bio link. So that’s only 3 people that landed on our sales page. We can conclude that her audience isn’t large enough for even one sale of the offer. She might have warmer leads that were predisposed to buy. But based on the numbers, not even one sale. And if she were expecting 125, let’s just say she’d be very, very disappointed.
2. Are you getting enough traffic to your sales page?
Knowing her numbers means she needs to invest in better traffic, get more eyes on that sales page, so she can sell more units.
So let’s say she goes ahead and spends $1,000 a month on ads. And she’s got a $2 per view ad rate. She’s now gaining 500 views per month on our sales page. She’s still not going to sell 125 units but will pick up around 25 of them or so. But she at least has a profit; she’ll profit around $150.
But let’s say that she goes up to $3 per view. Now she’d be losing $230. That said, if her main offer started selling better at more than 5%, there’d be new options. (Maybe she invested in better copywriting for an area of the sales page that wasn’t doing well. Let’s say she doubled it and she started seeing 10% sales.) Now she’s gonna be profiting $539. Those numbers are real-world numbers. You just need to know which area to upgrade.
You can use heat map analysis to choose; it’s one of the most common methods to see where on a sales page people are pausing or clicking away. Many tools are available for this like Hot Jar or Plerdy. But if you don’t know which area of the sales funnel isn’t performing, ie, the main sales page offer, you won’t know how to fix it. So knowing your conversion rate numbers not only sets you up with better expectations up front but also helps you see what the chokehold in the funnel is.
A few final tips for improving your sales funnel performance
Again, having all these numbers at your fingertips is key. I hate logging into five different platforms just to figure out some basic information. I like getting it all aggregated into a dashboard. You guys know I love a Content Measurement Dashboard because I despise having to spend too much time looking up information. I like having it all in front of me. I feel the same way about sales, funnel dashboards, and launch dashboards. I like to know which email resulted in the most follow-up sales, which offer had the best conversion rate, and which social media platform led to the most sales funnel clicks or views. These are whole questions that we can visually answer on a single dashboard. Simplicity is key when we’re talking about visual data representation. And if you know that this is something that you want, if you’d like a sales or launch dashboard to simplify your next program release or course release, please reach out.
Knowing how to do this helps you decide whether you’re going to invest in a funnel at all. All of this depends on knowing your numbers understanding how sales funnels work, and understanding your buying journey on having good validated offers. All of these things help you become a better business person. And ultimately, make sure that your business is supporting your life.
My goal is to make sure that your business is not a stress basket in your life and being confident in the offers that you’re putting out there. And being confident in your launch assets starts with knowing your numbers and being able to find them easily, so it’s not something that you avoid. I understand procrastination. We’ve all been there. When you have an easier way to get this information, you don’t need to avoid it.
Are you ready to create a measurable content plan?