Conversion Funnel Basics

By Jeb | September 9, 2009

This is a plastic kitchen funnel.Second in an ongoing series on small business online marketing tips, this post introduces the concept of ‘conversion funnels,’ a guiding metaphor used in online marketing. Read last week’s small business online marketing tip.

Summary: Small businesses that focus on creating effective conversion funnels will generate more leads and more revenue from their online marketing campaigns.

Conversion funnel. It sounds like another highfalutin marketing term, doesn’t it? Nevertheless, when you learn the definition, you’ll notice that the term has a way of creeping into your vocabulary…

conversion funnel: n. a sequence of steps leading (funneling) a prospect toward a desired action, whether it’s a purchase, application, quote request, etc.

In this post, we’re going to focus on one kind of conversion funnel—the kind that stems from ads placed in search engines like Google and Bing.

Once upon a time there was a keyword…
When a business advertises on a search engine, it bids on keywords—phrases that their prospects typically use when searching for their products and services.

For example, an insurance agency might bid on the keyword ‘car insurance quotes Colorado,’ a popular search term used by Coloradans shopping for car insurance. When a prospect enters that term into the search engine, the agency’s text ad is displayed in the results, either on the top or side of the page.

If the ad content resonates and the prospect clicks it, the business pays an agreed-upon price. (Thus the name pay-per-click advertising.)

Enter the landing page
After the click, the consumer is directed to a landing page within the agency’s web site. A landing page is designed to usher/guide/funnel/bully/goad/lure/entice a prospect toward a desired action. In our example, that action might be filling out a request for a quote and clicking submit.

It’s often the case, however, that the prospect isn’t quite ready to convert, and that’s why landing pages include text that reinforces and builds upon the message in the original ad. Without that continuity and reinforcement, the prospect—a skittish, fearful creature—might lose confidence and click away.

The landing page copy must also address the benefits of taking action (or, in some cases, the hazards of not taking action) and address any major objections or fears.

No conversion? There’s still hope.
Even if you don’t successfully convert every prospect, you’ve got a valuable consolation prize: data. You know which keywords they used; which ads they clicked; and which landing pages they saw. It’s the beauty of search engine advertising: the ability to monitor and tweak things—keywords, ad copy and landing page content—until you get the desired result. (Perhaps this is why paid search advertising is the only growth sector in the advertising industry…)

Back to our favorite insurance agency: Realizing that the keyword ‘car insurance quotes Colorado’ netted a lot of clicks but few actual conversions (i.e., quote requests), they decided to revamp their landing page. They added text indicating that the quotes are free, prepared instantly and non-binding. And to establish some credibility, the agency highlighted its membership in the Better Business Bureau. After refining their landing page, they were able to boost their conversion rate, capitalizing on more of those initial clicks.

One conversion begets another
Of course, our fictional insurance agency’s ultimate goal is to sell insurance policies, not just provide free quotes. So, a completed quote request is just one step, one conversion point in the larger conversion funnel.

In our example, the final conversion—the purchase of a policy—may happen offline, either over the phone or in person. And if no immediate sale is made, the lead can then be put back into the conversion funnel—perhaps into an autoresponder campaign that guides the lead back to the original landing page or a separate one with a different offer.

Make sense? Would a white board help? Click here to see Kutenda’s online marketing director explain conversion funnels using helpful circles and arrows.

File under: Small business online marketing > Search engine marketing > pay-per-click advertising

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Posted In paid search advertising, small business online marketing

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