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Breaking Down the 7 Stages of an E-Commerce Sales Funnel

If you operate an e-commerce store, you should familiarize yourself with the sales funnel. Also known as a conversion funnel, it represents the journey of a typical customer. Most customers probably won’t purchase a product immediately after discovering your e-commerce store – rather, they’ll take multiple steps leading up to a purchase. While sales funnels can vary, an e-commerce sales funnel may consist of the seven following stages.

1. Awareness

The first stage of an e-commerce sales funnel is awareness. The awareness stage is all about the customer becoming aware of your e-commerce store. Maybe the customer hears about your e-commerce store from a friend, or perhaps the customer sees a paid ad or YouTube video featuring your e-commerce store.

During the awareness stage, the customer learns about your e-commerce store and acknowledges its existence. The customer won’t take any action. The awareness stage simply places your e-commerce store on the customer’s radar. Whether online or local, all sales require awareness, which initiates the customer’s journey.

2. Interest

After the customer has become aware of your e-commerce store, he or she will typically express interest in. The interest stage is characterized by the customer showing some degree of interest in your e-commerce store. It involves an action, such as visiting your e-commerce store or following it on social media. If your e-commerce store has a wishlist option, the customer can express interest by adding a product to a wishlist as well. A wishlist option will allow the customer to save products he or she wants to purchase.

By performing an action, the customer becomes one step closer to making a purchase. Actions signal interest. If the customer is interested in your e-commerce store, he or she will likely perform some type of action. It’s part of an e-commerce sales funnel.

3. Research

The third stage of an e-commerce sales funnel is research. The customer is interested in your e-commerce store and is now seriously considering it. Before making a purchase, though, he or she may conduct research. The research stage is where the customer searches for information on your e-commerce store or its products.

A study conducted by GE Capital Retail Bank found that four in five customers conduct online research before making a purchase. They don’t spontaneously buy products. If customers encounter a product that piques their interest, they’ll research it beforehand.

Customers may conduct research by reading reviews, evaluating product specifications, checking the return policy and comparing other stores’ prices. Alternatively, they may send messages to customer service representatives. If you discover a lot of messages in your e-commerce store’s inbox, there are probably a lot of customers in the research stage.

4. Purchase Intent

The purchase intent stage involves the customer expressing a desire or intent to make a purchase. The customer has already conducted research and has now decided to make a purchase. During the purchase intent stage, the customer will express his or her intentions of making a purchase.

In an e-commerce sales funnel, the purchase intent stage typically consists of adding a product to a cart. The customer doesn’t have to check out. Just selecting a product and adding it to a cart is enough to express purchase intent. Preordering is another way the customer can express purchase intent. The customer may preorder an upcoming product. Regardless, purchase intent shows that the customer wants to purchase a product.

5. Upsell and Cross-Sell

The upsell and cross-sell stage is exactly what it sounds like: upselling and cross-selling related products to the customer. It’s commonly included in an e-commerce sales funnel. You can upsell by showing the customer more expensive versions of the product he or she added to a cart. And you can cross-sell by showing the customer different products that are relevant to his or her selected product.

The upsell and cross-sell stage is an opportunity to increase the customer’s order value. Even if the customer only selected a single product, he or she may purchase other products. Upselling and cross-selling both involve showing related products. Therefore, they will encourage the customer to place a larger order consisting of more products.

6. Order

The order stage is where the sale happens. The customer proceeds to check out and place an order. It’s the most important stage in an e-commerce sales funnel. Unless the customer places an order, he or she won’t yield sales revenue for your e-commerce store.

Just because the customer expresses purchase intent, he or she may not place an order. The customer may back out at the last minute. Rather than checking out, the customer may exit your e-commerce store while abandoning his or her cart. Your e-commerce store will only generate sales revenue if the customer places an order during the order stage.

7. Retention

The final stage of an e-commerce sales cycle is retention. According to Geckoboard, the average customer retention rate in the e-commerce industry is about 25% to 30%. For every 10 orders placed, two to three of them will come from returning customers.

You should strive to retain customers after acquiring them. The retention stage focuses on loyalty strategies that are designed to keep customers. A loyalty rewards program may result in a higher customer retention rate. You can reward customers with points or perks for making purchases. Even small incentives will encourage customers to purchase additional products.

In addition to a loyalty rewards program, you can seek feedback from your e-commerce store’s customers. Asking a customer about his or her level of satisfaction will allow you to address problems that could otherwise cause the customer to leave your e-commerce store for a competitor. If a customer complained about slow shipping times, for example, you can choose a faster shipping service.

Understanding the customer’s journey is essential to your e-commerce store’s long-term success. A sales funnel visualizes their journey in seven stages: awareness, interest, research, purchase intent, upsell and cross-sell, order and retention. Your sales funnel helps you understand what potential customers are thinking and doing at each stage of the purchasing journey. These insights allow you to invest in the right marketing activities and channels, create the most relevant messaging during each stage and turn more prospects into paying customers.

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