What can you do if you suspect that your cost of acquisition is higher than it should be? Our answer is to start by analyzing your customer funnel—and we mean the whole funnel, not just the top. Too often marketers focus on the cost of getting as many people into the funnel as possible—lead generation—but business results only happen when a lead goes all the way through the funnel. A funnel that lets more people slide through it with less friction is a more cost-efficient funnel.
Envision your funnel as the steps involved in the conversion process. From an ecommerce perspective, it might look like this: See ad. Click on ad. View landing page. Click on product page. Add product to cart. Check out. The top of the funnel is wide, representing everyone to whom we show an ad. The end of the funnel is more narrow because only a portion of ad viewers convert. It’s easy to measure cost at the top of the funnel and the bottom off the funnel, but what happens through the funnel is key to cost efficiency.
Above is a fairly typical example of an ecommerce funnel
Your funnel costs might be too high because of delayed user behavior, for instance—people see your ad but don’t convert until days or weeks after. In this case, you could decrease funnel costs with retargeting, cutting down time to conversion. Maybe your “click” cost is too high, and perhaps you need to rethink your creative. Maybe people are landing at a promoted product page, adding the item to their cart, and starting to check out, but they don’t complete the purchase. In that case, an automated email reminder might create conversions and decrease through-the- funnel costs. It could also be that your site is confusing at a critical step in the sales process. The key is being able to be able to accurately diagnose funnel problems is having good data, emphasis on “good.”
Pixel tracking on Facebook is a simple way to give you clarity at any or every stage of your conversion funnel. Using pixel tracking for accurate funnel performance analysis means knowing where to place the pixels. If you place them correctly and you are tracking them all the way through the funnel, diagnostics are relatively simple. However, if you place a pixel only on the “Thank You for Your Purchase” page, you won’t see where users drop off.
For example, let’s say you have lots of clicks, but people are falling out of the funnel once they hit the landing page. Knowing this, you can begin to test. Perhaps the ad is being perceived as “clickbait.” You could see if running less forceful ads get more people farther into the funnel by qualifying them better. If there is little or no difference, then you can move the next stage of the funnel and test different elements of your landing page, and so on down the entire funnel.
Analyzing the funnel for greater efficiency takes setting your advertising up to capture the right data; knowing how to segment, analyze and test that data; and having a partner who can flex with you to use that data in as close to real time as possible.
This is the kind of work we do every day for clients. If you want to investigate where friction might be slowing your funnel, connect with us. We’ll be glad to share what we’ve learned about making conversion funnels as smooth as possible.