What is a conversion funnel?

What is a conversion funnel? Learn more about the definition, phases and optimization of a sales funnel in online marketing.

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 buy a product or service. This process includes several steps, starting with the initial interaction with the company or brand and ending with the execution of the purchase or other desired action (e.g. newsletter sign-up).

Different phases of the conversion funnel

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

  • Awareness: In this phase, potential customers discover the company, the brand or the product/service offered for the first time. Online marketing measures such as display advertising, social media marketing or search engine optimization (SEO) can help to increase awareness in this phase.
  • Consideration: In this phase, potential customers actively research and compare different offers to find out which ones are suitable for them. Content marketing (e.g., blog articles, white papers) can help illustrate the credibility and expertise of the company in this phase.
  • Conversion (decision): In the conversion phase, customers have decided on an offer and perform the desired action, such as buying a product or signing up for a newsletter. Landing page optimization and the use of targeted call-to-actions (CTAs) can help win over the customer in this phase.
  • Retention: After customers have taken the desired action, the goal is to turn them into loyal customers who will continue to use the product or service and possibly make further purchases. Email marketing, remarketing or personalized offers help to increase customer loyalty in this phase.

Conversion funnel optimization

Optimizing the conversion funnel is an important aspect of online marketing to maximize the effectiveness of marketing activities and reduce the cost per acquisition (CPA). This includes understanding and analyzing the different stages of the funnel to identify bottlenecks and potential. A/B testing, which compares changes to design, copy, or CTAs, is a common tool for optimizing the funnel.

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