If you are a businessman, you cannot ignore the analysis of sales funnel data. These numbers will tell you what you did in the last month or the best-selling products, so you have a reasonable strategy.
If you still don’t know about the sales funnel, follow the following article to find the answer. We’ll give you a comprehensive view of Sales Funnel Metrics.
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What Is The Sales Funnel Metrics?
Sales funnel metrics is a concept that measures customer marketing metrics through each stage. Your product may be excellent, reaching many people but not sure the number of people willing to spend money to buy your product is significant for marketing efforts.
The sales funnel has four significant stages, the top of which is your potential audience. Through each step, depending on the approach and the product pr, the number of conversions becoming customers and customer acquisition cost will gradually decrease.
People excited about the product will continue to stay, and the number of people paying for it will be only a fraction of that.
To get to the bottom of the sales phase and still keep a large customer base, you need a similarly large head. Sometimes you will have to sacrifice a small customer base to achieve a larger goal. These bold decisions will help you make content more persuasive and user-friendly.
Read and analyze practical versions like saas sales funnel metrics, so you can optimize your business performance. You can easily see the operational gaps that the company is facing. From those mistakes, you can develop solutions to improve and boost sales for the company.
Four Key Online Metrics For Sales Funnel
A sales funnel describes a consumer’s journey from a prospect to a customer. This process is divided into four main stages to track and accurately determine the capabilities of the business.
1. The number of accesses
Anything you want to measure needs to have a specific quantity. Precise numbers in each section will help you pinpoint exactly where your system’s strengths and weaknesses are.
Traffic will tell you how effective your plan or campaign is on a specific audience. For example, if you run ads on Facebook or Instagram, the traffic will help you know how many people that ad has reached.
If you’re seeing a massive difference between your reach and the number of people clicking through to your page, you may need to redefine your audience.
The funnel metrics here can also give you an idea of how the brand is perceived. You can also take these numbers at many different times and campaigns to analyze communication effectiveness with marketing efforts.
1.2 Return traffic
You can do a great job of getting people to click on your page, but this is just the beginning. No one will want to see a brand that invests in impressive advertising, but the content inside is sketchy, not having what they are looking for.
At this stage, you need to provide the viewer with the information your ad is about. This information also needs to be presented beautifully and conspicuously so that viewers do not skim and miss the news.
If you don’t do an excellent job of presenting information and keeping your audience engaged, chances are they’ll leave and look for a new source of information.
A high number of visitors but many people to click or search for the next page and low time to stay means that your page is not attractive enough.
It would help if you researched what your audience wants. You can also arrange navigation popup bars or chatbots to assist viewers.
1.3 Measure Leads Generated
After determining the number of people visiting the page and returning traffic, it’s time to turn them into your paying customers. If you think they need to visit your site, see product information and buy together, you are wrong. In fact, those who believe instantly still have those numbers minimal.
So it would help if you had tactics to increase conversions. Depending on the audience, you can apply simultaneously or several methods such as email marketing strategy, exclusive promotions.
You can rely on tools that analyze information, behavior, or behavior buyer’s process to determine which target group they belong to.
1.4 Measure sales opportunities
The objects in this file are still in the group of potential customers, but at a higher level, but have not become people to pay for you.
People who have followed you to this step will thoroughly understand your business. So it would help if you had unique plans or programs for this audience.
By measuring marketing and sales opportunities, you can determine how effective your campaign is. If you have good traffic and metrics but low conversions, the problem is closing the sale.
2. Conversion rate
It would help if you had a professional cycle to have specific reports and research on conversion rates in your business. These numbers are heavily dependent on lead and funnel visits reports. To measure and analyze conversion rates effectively, you need time and implement many different campaigns.
2.1 Overall conversion rates
The overall conversion rate is the number of people who buy to the total number of people who visit your marketing and sales page. If you see 1000 total traffic and 750 orders from new users, your conversion rate is 75%.
The higher this number, the better your sales funnel does its job. If this ratio is low, about less than 50%, you need to review the marketing and sales velocity process or issues such as images or prices.
2.2 In-process conversion rate
In-process conversion rate indicates the conversion rate in each step in the number of accesses. This section will measure at what action a consumer converts from a lead to a customer.
You can know which part of you is working effectively to maintain it. Conversely, you can also understand what is not good and make customers leave to take measures to improve.
3. Average sales
Revenue is the number that most clearly shows the success of a business. It can take a lot of work to run ads or develop an outstanding campaign, but it is still essential to get the results back. The value each business expects will also vary depending on the sales velocity segment.
For example, a company dealing in high-end products will care about what they sell, while a business dealing in cheap and essential products will need to care about volume or return traffic.
3.1 Categorize sales funnels by potential customers
A beginner’s mistake is to bundle marketing qualified leads into one file and use the same method to stimulate demand. In fact, customers know your business from many different sources. Maybe they are surfing the web and see your ads; perhaps they know through friends or KOLs.
So you need to classify and have specific solutions for each customer group. If you don’t know where they’re coming from and how they found out about your business? The simplest thing you can do is take surveys.
The people who take the time to fill out the survey are the people who are very interested in your brand. So it would help if you prepared small gifts for them instead of thanking them.
3.2 How to calculate investment fee per lead
- The cost to reach potential customers can be, in other words, the money you spend to run ads or hire KOLs. You can measure effectiveness by dividing the total amount paid by the number of people you reached.
- Opportunity price is the amount of money you spend to attract a customer and pay for your product. This amount accrues from the cost in each step of the sales funnel.
- Value per sale tells you how much you spent on each sale. This cost will include the opportunity cost, cost of packaging, shipping, or personnel for each order.
- Customer return value refers to the revenue you can earn from a single guest. To have this value, you need to have a good service so that customers are happy and come to you to buy next time.
3.3 Opportunity, the value from potential customers
To determine and quantify the cost of your campaigns, you need to calculate the return value from each lead. You need to apply the process for a specific period to receive revenue to get this number.
Then, you use this total revenue, minus the initial fees such as production, promotion, management fees. You divide the final result by the total number of customers or potential customers. If the number is positive, it means you are on the right track.
3.4 Sales speed is the key to success
Sales speed can be determined through many different methods. The speed of successful transactions measures the most common through your sales funnel.
This rate is calculated based on the average value of an order, the number of purchases, and the sales cycle length.
You can apply this metric to predict your revenue for the week or month. From there, you will be able to strategize to import or produce goods accordingly.
4. Duration of the sales funnel process
Last but not least, the metric that you need to pay attention to improve your conversions and sales is the length of your sales funnel.
This duration is the average time it takes a customer from the moment they walk into the funnel to pay for the product.
The shorter the average time a person is on the page, the more efficient your sales process. Before it took a few days to get a person to buy a product, the average time is now down to 10-15 minutes. It means that you have successfully persuaded the customer and given them what they were looking for.
You can also see a customer’s average length of time in their purchase journey.
By tracking how long a customer is in each stage, you can see what changes you need to make. If they scroll through too quickly, the item may not be required, possibly reducing the load.
Or if they stay at a specific part for longer, they may be interested, or the information is a bit confusing, and you need to reword.
How To Use Sales Funnel Metrics?
Sales funnel metrics are the best tool for you to measure the performance of your business. You can determine your performance and prepare development solutions based on these specific numbers.
Overall, the figures from this sales funnel are pretty numerous and confusing, making it difficult for beginners. In fact, many people have ignored or read only a few basic figures.
However, you need to see the full analysis to get a comprehensive view of your campaign. From there, you will know the strengths and the gaps you need to fix.
The intervals that give good sales funnel metrics will be a note for you to take advantage of in your future campaigns. This point shows your customers’ interest in attracting and keeping them longer. Time is a positive sign for you to convert to an order.
A flaw in the sales process can also drag down funnel effectiveness. So, the sales team also needs to pay attention to the red points to think of solutions to overcome.
You’ll need to make sure to optimize every step and take advantage of every opportunity on the page to convince customers to spend money.
In addition, metrics from sales funnels will reflect consumers’ attitudes towards your funnel. Return traffic or the amount of new data customers provide will be a positive sign for your funnel.
It is difficult to get personal information, but if customers are willing to offer it to you, you should make good use of this opportunity to promote your products.
Sales Funnel Metrics are a complex and challenging metric for many people.
Maybe you already know the basics, but you probably don’t know how to apply them in your business. So you can refer to some of the following questions to use the data more effectively.
What is the best metric to measure the effectiveness of a sales funnel?
Total sales are one of the best metrics to measure your sales performance. This sale is your profit after deducting the production, pr, or administrative costs of getting the product to the customer.
This metric is used to measure the overall effectiveness and growth of the sales funnel. The same period but the e-commerce funnel and the traditional sales funnel will have different figures.
Also, from this number, the sales team can distinguish and choose a proper distribution funnel to bring the highest profit with the lowest investment.
Can indicators be used in different stages of the funnel?
Each stage or campaign will have a specific measure that shows the effectiveness of each part. You cannot use one report to apply to the whole process.
After a while, you need to review the report through many lessons learned to see if the new campaign is delivering quality.
In the process, you need to pay attention to the growth or change of the following four indicators:
- Cost per conversion
- Customer lifetime value
- Conversion rate
- Conversion rate per funnel
How to calculate the overall conversion rate?
To calculate your overall funnel conversion rate, the sales team needs metrics on your inputs – visits, sales qualified leads, interested, engaged customers, and up to the actual number of buyers.
Sales funnel metrics examples:
- You have traffic of 4000 people, of which people who are conscious of your brand (traffic) are 1000 people – 25%.
- Then the number of people staying and continuing to care (return traffic) is 500 people (equivalent to 50%).
- The number of people who intend to buy the product, take a closer look at it is 350 people – equivalent to 70%.
- The actual number of people spending money to own the product is 280 people – equivalent to 80%
- To calculate the overall conversion rate, multiply all the numbers above, and we get the result: 25% x 50% x 70% x 80%= 7%
Another way when you only know the number of people who actually spend money to buy and still want to calculate the conversion rate:
- Divide the actual number of buyers by the original number of visits. According to the above data, you have the calculation:
- (280: 4000) x 100 = 7%
Pro tip: Clickfunnels provide the Funnel ROI Calculator that you can access for free, which means you can use it to calculate your sales funnel data.
Sale funnel metrics are significant in optimizing a business’ sales campaigns and activities. These reports and analytics will tell you what you need to do next to grow your sales.
However, you need to note the same index, but each business will handle it differently. For example, mid-range product prices will need to have a different solution than high-end product lines. Therefore, you need to know how to read, but you also need to respond to each situation flexibly.