E-Commerce Insights

How to Optimize eCommerce Funnel for Your Online Business

The ultimate goal of any eCommerce brand is to sell as many products as possible. However, this goal might be impossible to achieve if you fail to convert leads into customers. Optimizing the eCommerce funnel is one of the best ways to improve the conversion rate that you should pay close attention to.  

What is eCommerce funnel?

Ecommerce funnel illustrates the process or the overall path customers take from being aware of your business to returning after making a purchase at your online store. 

Ecommerce funnel is concerned with a customer’s stages of interest in a specific brand. Each business will develop a specific funnel that depends on their business niches and how customers interact with their brands. 

eCommerce Funnel Diagram

5 Stages of eCommerce funnel

1. Awareness

The awareness stage is the “top of funnel” where potential customers become aware of your business and recognize how they can benefit from your products or offerings. The goal of this stage is to help customers realize your business can provide effective solutions for their existing problems. This could be done by delivering informative and quality content that identifies customer segmentation and introduces your brand.

2. Interest

The second stage of the eCommerce funnel is called the interest or consideration phase. Once customers get to this stage, they become interested in learning more about your brands and products, yet they are still weighing different options. 

3. Decision

In the third stage of the funnel, potential customers are done with browsing your store site and searching for product information. They will experience a burning desire to make a purchase, yet they still contemplate seriously. In this stage, it is of great necessity for you to convince customers of the outstanding benefits of your products and services.

4. Action

Action stage is the most essential phase in the eCommerce funnel, as customers have made up their minds and decided to make a purchase at your store. In order to ensure that customers will finish their orders, you need to deliver a seamless customer experience, especially by leveraging the checkout process.  

5. Retention

At the final stage, customers have built trust in your brand and they want to come back for more. This phase is often overlooked by eCommerce brands, but returning customers can generate high profits since the cost of acquiring old customers is less expensive. Retention stage is important to nurture customer relationships and increase customer lifetime value.

Ways to optimize eCommerce funnel

By optimizing each stage of the eCommerce funnel, online brands can make it easier in converting potential customers and achieving sales goals: 

Awareness stage

1. Focus on content quality

You should bear in mind that content in this stage focuses on delivering valuable knowledge and resources to customers, rather than attempting to sell anything. Even without a huge advertising budget or a big marketing team, it’s still possible to create helpful and quality content guides on eCommerce sites or social media channels. 

2. Utilize excellent SEO/SEM

Whenever customers are in need of a particular product (e.g. running shoes for women) or a solution for a problem they are facing (e.g. how to prevent pimples), they are likely to do an online search. Therefore, by increasing search results ranking, you can get more chances of increasing customer awareness. 

3. Create a referral program

Customers tend to refer a product to others who share the same interest or problems. Referral programs are a great tool that helps your online store increase brand’s awareness to the right audience. 

Leesa referral program
Referral program by Leesa (source: getambassador)

Consideration stage

4. Use simplified navigation

A complicated navigation will make potential customers feel lost and they might abandon your site after a few minutes. Remember to use navigation wisely by providing sufficient navigational elements that help visitors know where they should browse next. 

5. Display social proof

When customers view social proof from credible influencers and customers, they will put their trust in your brand. Some of the best ways to implement social proof are using customer testimonials and encouraging user-generated content.

social proof
Poo-Pourri displayed customer testimonials on its product page

6. Integrate social media

Always link all your social media channels, such as Facebook, Instagram or Youtube accounts in the storepage to make sure customers know how to reconnect with your brand after they leave your sites.   

Decision Stage

7. Optimize product page

Online shopping means instead of trying on the real items, customers can only rely on the product information you provide. Seize this chance to convince customers by including your product page with clear product descriptions and high-resolution visuals. 

Nike product page
Nike’s product page

8. Create irresistible promotions

One of the best ways to lure customers to make a purchase at your online store is to offer them attractive perks and promotions, such as free shipping, discounts and return policy. 

Converse freeship
Converse offered Free Shipping for members

Action Stage

9. Provide a seamless checkout experience

Once visitors decide to purchase products from your store, the checkout page becomes the final wall between you and customers. Make sure the checkout process is not too long and complicated, and providing a predictive entry to auto-populate fields is a smart choice. 

10. Integrate various payment methods

As customers might have myriads of ways to pay, it’s essential to meet their preferences by integrating various forms of payments and digital wallets such as Android Pay or Apple Pay. 

different payment methods
Integrate different payment methods (Source: Bigcommerce)

Retention Stage

11. Prompt customers to create accounts

Asking customers to create accounts not only helps you to collect their information with ease, but customers can also make a faster purchase on their next time order.  

Sony login page
Sony asked customers to sign in or create new accounts

12. Promote loyalty program

In order to enhance customer lifetime value, there is no better way than offering customers to join your loyalty program after they finish their transactions. Introducing a loyalty program to new members creates a sense of exclusivity and belonging, making them want to return for purchase more next time.

Loyalty program
Promote loyalty program to new customers (Source: Sleeknote) 

13. Implement email marketing

Effective email marketing enhances customer relationships and greatly boosts the retention rate at your store. Sending a thank-you email with exclusive recommendations based on customer previous orders is a great way to turn new buyers into loyal customers. 

Important KPIs for eCommerce funnel optimization

In order to effectively optimize the eCommerce funnel, you need to constantly monitor certain KPIs (Key Performance Indicators) at every stage of the funnel. The total number of KPIs can be overwhelming, but there are some key KPIs that you need to carefully analyze. These KPIs provide actionable insights into business performance to help you make strategic adjustments to the eCommerce funnel optimization process:

  • Conversion rate
  • Cart abandonment
  • Site traffic
  • Bounce rate
  • Customer lifetime value

For a detailed description of all the mentioned KPIs, please have a look at Essential eCommerce KPIs for Online Business


The key for an excellent eCommerce funnel is to understand how prospective customers are moving through the funnel and optimize each stage to gain higher conversion. Though optimizing the eCommerce funnel might sound complicated with a huge workload to finish, it is extremely essential to multiply revenues at your online store in the long term.


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