What is a conversion funnel?

A conversion funnel, also known as a sales funnel, is a model that describes the process a potential customer goes through to purchase a product or service. This process involves several steps, from the first interaction with the company or brand to completing the purchase or other desired action (e.g. newsletter subscription).

Different stages of the conversion funnel

The conversion funnel can be divided into different stages, which can vary depending on your business model and marketing strategy. However, the basic phases are:

• Awareness: This stage is where potential customers first discover the company, brand, or product/service being offered. Online marketing measures such as display advertising, social media marketing or search engine optimization (SEO) can help increase awareness during this phase.
• Consideration: In this phase, potential customers actively research and compare different offers to find out which ones are right for them. Content marketing (e.g. blog articles, white papers) can help demonstrate the company’s credibility and expertise at this stage.
• Conversion (decision): In the conversion phase, customers have decided on an offer and carry out the desired action, e.g. purchasing a product or registering for a newsletter. Optimizing the landing page and using targeted call-to-actions (CTAs) can help engage the customer at this stage.
• Retention: After customers have taken the desired action, the goal is to convert them into loyal customers who will continue to use the product or service and potentially make further purchases. Email marketing, remarketing or personalized offers help to increase customer loyalty in this phase.

Optimization of the conversion funnel

Optimizing the conversion funnel is an important aspect of online marketing in order to maximize the effectiveness of marketing measures and reduce customer acquisition costs (CPA, cost per acquisition). This includes understanding and analyzing the different phases of the funnel to identify bottlenecks and potential. A/B testing that compares changes to design, copy, or CTAs is a common funnel optimization tool.