I received an email from a reader who needed some advice regarding the diagnosis of sales funnel. I’m going to keep this short as I’m busy with launching some more campaigns right now, but I hope that I leave some value here.
There’s no rocket science here. The first thing for you to do is to be aware of all the steps that your potential customer is going to take in order to purchase something. Starting off from seeing your ad on Facebook or other platforms, watching/engaging with it, clicking on it to reach your landing page, reading the product description, adding the product to cart, initiating checkout, adding shipping/payment info, and eventually committing a purchase. These are the steps that the customer goes through in most of my advertising. It can be different for everyone.
The second thing for you to do is to find where the breakage is. If you’re failing to see results, you need to identify the point where something is going wrong. If you’re doing video ads and have good watch time, your creative and your targeting should be okay. So you’ve diagnosed this step of the funnel and should move forward. If you have a good CTR (1%+ for Facebook), it means your ad copy was convincing and the customer is interested in knowing more about your product.
If your bounce rate is low and your time on site high, it means your landing page was engaging and informative. If over 10% of the people on your LP add the product to their cart, it means your ATC button placement, color etc is good. If over half of those who added the product to cart then initiate check-out, it means your cart page is not broken and created as it should. If over half of those who initiated check-out, purchase the product, congratulations you’ve made it.
Key metrics that I really like to focus on: average video views in seconds: 10 seconds or more. Average video views in percentage 25% or more. CTR minimum 1%, ideally 2%+. ATC rate, I like it over 10%. Initiate check out rate, I prefer having over 5% and conversion rate should ideally be 2.5% or more. Below are the today’s stats for one of my stores
I had a really busy day today. We successfully launched phase 1 of scaling for our new store. I also started retargeting campaigns today. For those who don’t know, retargeting is simply reaching back to the potential customers who showed some sort of intent to purchase your products.
Generally, I like to run 5-6 types of retargeting ad-sets including retargeting those who visited the product page, added the product to cart, initiated check-out, watched at least 75% of our video ad, and top 25% of the users by time-spent.
Recovering abandoned carts, and potential customers with intent is incredibly important. You’ve often spent 90% of your budget already to capture their intent, you just need spend 10% more to capture the sale.
I prefer running retargeting ads with photo creatives. Although I run almost all other ads with video creatives. Since the retargeting user group have already seen video ads, they just need to be reminded again about a product with a photo. This has provably worked for me and I’ve had tons of data to support this argument.
Although there’s no standard for e-commerce metrics, you should still aim to hit certain floors for your metrics in order for you to have a working funnel. I call this a 1/2 rule.
When a user lands on your product page, you need to track the progress between the different steps he needs to go through. A large or unexpected drop at any step should make you want to investigate that particular step of the funnel.
After landing on the product page or landing page, the user may have to add the product to cart. After adding the product to cart, user would land on the cart page. At this point, user would need to initiate check-out to land on the check out page. The user then needs to input his shipping and billing info in order to place the order.
While what percentage of users reach on each of these pages will largely vary depending on the type of products, price of products and the source of traffic, for typical dropshipping stores selling products between $20-$100 I recommend to at least watch out for the 1/2 rule.
The 1/2 rule suggests that if 20 people added the product to cart, at least 1/2 of them should initiate check-out which should lead 10 users to the check out page. And if 10 made it to the check-out page, at least 1/2 of them should purchase giving you 5 purchases in the end.
Landing page optimization is very important and I recommend that you use heatmaps to optimize your funnels. If you get your advertising, creatives and product selection right, but there’s a problem with your landing page, cart page or check out page, you’ll end up wasting all your efforts.
After all a chain is only as strong as it’s weakest link.