If your business struggles to attract customers or suffers from a low conversion rate, this article can provide valuable insights to improve your results.
Understanding the business context is essential for conducting an accurate analysis. Knowing the customer’s buying journey and identifying their current stage allows for the best strategy to attract and convert them. To comprehend this journey, we use the sales funnel—a strategic tool that illustrates the different phases a customer goes through, from the first contact with the brand to completing the purchase.
The term “funnel” is used because, as potential customers move through the stages, the number of people decreases, reflecting those who drop out or are not yet ready to purchase the product or service.
This tool helps companies understand consumer behavior at each stage of the buying process. By identifying where the customer is in the funnel, businesses can tailor their marketing and sales actions, increasing efficiency and conversion rates.
Let's explore a practical example of how to identify the customer’s buying journey and use key indicators to measure success at each stage, guiding them toward conversion.
1) Top of the Funnel (Awareness): At the beginning of the journey, the customer doesn’t yet realize they need a product or service to solve a problem. This is the stage where awareness starts to emerge as they begin exploring information and better understanding their needs. For example, a consumer experiencing back pain may not initially realize they need a new mattress; they simply start searching for content about well-being and ergonomics.
At this stage, the goal is to attract visitors and increase brand awareness. Using the previous example, this is when the customer needs to discover the mattress brand. The following KPIs can be used to measure this objective:
1.Reach (Impressions): Measures how many people were exposed to the campaign or content. It is an important metric for assessing brand visibility.
2.Website Traffic (Unique Visitors): The number of new visitors to the website or blog from marketing campaigns. It evaluates the effectiveness of actions in attracting an audience.
3.Social Media Engagement: Interactions such as likes, shares, comments, and link clicks. It measures how well the content resonates with the target audience.
2) Middle of the Funnel (Consideration): In the middle of the funnel, the focus is on engaging leads and sparking their interest in the product or service. Using the mattress example, now that the customer knows they need a new mattress, they recognize that sleep and well-being are essential and begin searching for specific solutions.
This is the stage where the brand should provide more detailed information (product comparisons, customer reviews, guides on choosing the ideal mattress, and educational content about the benefits of quality sleep). The goal is to help the customer see the product’s value and how it can solve their problem, bringing them closer to the purchase decision.
1.Lead Conversion Rate: The percentage of visitors who became leads by filling out a form or downloading content like an e-book.
2.Cost per Lead (CPL): The average cost to acquire a new lead through marketing campaigns.
3.Email Open Rate and Click-Through Rate (CTR): Measures engagement levels with email marketing campaigns, reflecting the lead’s interest in the content sent.
3) Bottom of the Funnel (Decision): The goal here is to convert leads into customers. The KPIs at this stage measure the sales team's efficiency and the closing rate. In the mattress example, the customer is now seriously considering purchasing the product. They may compare prices, check promotions, review warranty policies, and read customer testimonials.
The sales team can step in by offering personalized service, special payment conditions, or even a product demonstration to address any objections and facilitate the buying decision. Success is measured by KPIs such as:
1.Sales Conversion Rate: The percentage of qualified leads that converted into customers. It is one of the main metrics for evaluating funnel efficiency.
2.Customer Acquisition Cost (CAC): The average cost to acquire a new customer, including all marketing and sales expenses.
3.Revenue Generated: The total direct revenue from sales within the analysis period. This is a crucial metric for measuring the impact of conversions.
Now that we understand the customer journey and how to measure it, it's time to find a solution to put it into practice. Have you considered having a data analyst in your business to extract these insights, create key indicators, and generate value for your company?
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