Marketing Funnel Analysis & Optimization for E-commerce
Awareness Phase
Metrics:
- Website visits: 70.2K (60% bounce rate)
- Social media engagement: TikTok (3%), Instagram (1.2%), Facebook (0.8%)
- CPA: €12
High bounce rate indicates a poor first impression; optimize website speed, visuals, and landing page clarity.
TikTok is the strongest performer; focus on video content and collaborations.
Consideration Phase
Metrics:
- Leads: 60K
- Email CTR: 3.5%; Open rate: 25%
CTR improvement is needed via better segmentation, A/B testing, and personalized offers.
Lead nurturing via drip campaigns (e.g., free trials or discounts) can improve engagement.
Conversion Phase
Key Metrics:
- Subscriptions: 8.5K
- Cart abandonment: 70%
- Conversion rate: 2.1%
High abandonment equals lost revenue (€16.5K/month). Simplify the checkout process and use cart abandonment emails.
Low conversion rate indicates a weak value proposition or friction. Create urgency (e.g., limited-time offers).
Retention Phase
Key Metrics:
- Churn rate: 5%
- CLV: €95
- CSAT: 4.2/5
Churn leads to a €6.8K monthly revenue loss. Reducing churn by 1% saves ~€1.4K.
High CSAT can further improve loyalty and retention.
Revenue Insights
- Monthly Subscription Revenue: €135,915 (8.5K subscribers × €15.99/month)
- Lost Revenue from Churn: €6,795.75/month (5% churn)
- Customer Lifetime Revenue: Average tenure = 20 months; revenue per customer = €319.80
Recommendations by Funnel Stage
Awareness:
- Optimize website speed and landing pages to reduce bounce rate.
- Focus on TikTok campaigns, influencer partnerships, and user-generated content to boost engagement.
- Lower CPA by refining ad targeting and creative strategies.
Consideration:
- Use segmented, personalized email drip campaigns to nurture leads.
- A/B test subject lines, calls-to-action, and offers for better CTR.
- Offer exclusive content or free trials to build trust.
Conversion:
- Send automated cart abandonment emails with incentives (e.g., discounts).
- Simplify checkout: fewer steps, guest checkout, multiple payment options.
- Use urgency tactics (e.g., “limited-time offers”) to encourage purchases.
Retention:
- Launch loyalty and referral programs to reward repeat customers.
- Personalize email campaigns with tailored product recommendations.
- Collect post-purchase feedback to improve experiences.
Key Insights for Exam Application
- Social Media: TikTok (3%) has the highest ROI potential for awareness. Use video-driven strategies.
- Conversion Optimization: Address bounce and abandonment rates to unlock untapped revenue (~€16.5K/month).
- Churn Reduction: Cutting churn by 1% increases monthly revenue by ~€1.4K and boosts CLV.
- Email Marketing: Open rates (25%) indicate potential for better CTR with segmentation and drip campaigns.
ROI (Return on Investment)
Formula: ROI = (Revenue – Cost) / Cost × 100
Per Customer ROI: CLV: €95, CPA: €12.
- ROI per customer: (95 − 12) / 12 × 100 = 591.67%
- Insight: Each customer delivers nearly a 6x return on the acquisition cost, making campaigns profitable despite room for CPA reduction.
Monthly Subscription Revenue ROI:
- Revenue: €135,915, Churn Loss: €6,795.75.
- ROI from subscriptions: (135,915 − 6,795.75) / 6,795.75 × 100 = 1,899%
- Insight: High retention directly correlates with strong revenue ROI. Reducing churn to 3% will further increase it.
ROAS (Return on Ad Spend)
Formula: ROAS = Revenue from Ads / Ad Spend
- Current ROAS: Assumes €720,000 total CPA spend (60K leads × €12 CPA).
- Revenue from customers: 60K × €95 = €5,700,000
- ROAS: 5,700,000 / 720,000 = 7.92
- Insight: For every €1 spent on acquisition campaigns, Degusta Box generates €7.92 in revenue. Optimizing ad targeting and reducing CPA will improve this ratio.
Churn and Retention Impact on ROI
Churn Reduction ROI:
- Churn Loss at 5%: €6,795.75/month.
- Churn Loss at 3%: €4,077.45/month.
- Savings: €2,718.30/month, equating to an annual ROI boost of ~€32,619.60.
- Insight: Reducing churn directly increases retained revenue, strengthening ROI over time.
Proposed Customer Journey Framework
1. Awareness Stage
Goal: Attract new customers and drive traffic to the website.
Digital Touchpoints:
- Social Media Ads & Content: Leverage TikTok, Instagram, and Facebook with engaging video campaigns, user-generated content, and influencer collaborations.
- SEO Optimization: Use high-performing keywords and create blog content (e.g., recipe ideas) to boost traffic.
- Targeted Display Ads: Retarget users who visited the site but bounced or didn’t engage.
Impact on Metrics:
- Social Media Engagement: Increase from current averages (1.67%) to the target of 15%.
- Website Visits: Boost visits by 15% by optimizing ad campaigns and content.
- Bounce Rate: Reduce by improving landing pages to align content with user expectations and enhance the user experience (lower than 60%).
2. Consideration Stage
Goal: Nurture leads and encourage users to explore offerings further.
Digital Touchpoints:
- Email Drip Campaigns: Personalized emails for new leads, segmented by interest, featuring promotions, testimonials, or free trial offers.
- Interactive Tools: Add product recommendation quizzes on the website to guide users to their ideal box.
- Social Proof & Reviews: Highlight customer reviews on Trustpilot (target CSAT increase to 4.5/5) and integrate them into emails and ads.
Impact on Metrics:
- CTR for Email Campaigns: Increase above 3.5% by refining messaging and personalization.
- Lead-to-Customer Conversion: Improve the overall conversion rate to 5%.
3. Conversion Stage
Goal: Minimize friction and increase completed transactions.
Digital Touchpoints:
- Abandoned Cart Emails: Send automated cart recovery emails offering discounts or incentives (e.g., free delivery).
- Checkout Optimization: Simplify checkout steps, add guest checkout, and ensure mobile responsiveness.
- Urgency Tactics: Display countdown timers for limited offers or “X left in stock” notifications.
Impact on Metrics:
- Cart Abandonment Rate: Reduce from 70% to 50%.
- Website Conversion Rate: Increase to 5% by minimizing checkout friction and leveraging urgency tactics.
- Monthly Subscription Revenue: Boost revenue from €135,915 through higher conversion rates.
4. Retention Stage
Goal: Retain existing customers and reduce churn.
Digital Touchpoints:
- Loyalty Program: Offer points for recurring orders, referrals, and social media shares.
- Subscription Perks: Provide access to exclusive content or early product previews for loyal customers.
- Re-Engagement Emails: Use win-back campaigns with personalized offers for inactive subscribers.
Impact on Metrics:
- Monthly Churn Rate: Decrease from 5% to 3% by improving customer engagement.
- Customer Lifetime Value (CLV): Increase from €95 by extending subscription tenure.
- CSAT Score: Raise satisfaction to 4.5/5 through better communication and personalized offers.
KPIs by Funnel Stage
1. Awareness:
- Website Visits: +15% (70.2K → 80.7K).
- Social Media Engagement: Avg. 15% across platforms.
- Bounce Rate: ↓ to 45%.
- Cost Per Lead (CPL): ↓ to €10.
- Tools: Google Analytics, Social Media Insights.
2. Consideration:
- Email CTR: ↑ from 3.5% to 6%.
- Lead Progression: +20% nurture rate.
- Tools: Mailchimp, Google Analytics, CRM Tools.
3. Conversion:
- Conversion Rate: ↑ from 2.1% to 5%.
- Cart Abandonment Rate: ↓ from 70% to 50%.
- New Subscriptions: +1,000/month.
- Revenue: Target €160K/month.
- Tools: Google Analytics, Cart Recovery Tools.
4. Retention:
- Churn Rate: ↓ to 3%.
- CLV: ↑ from €95 to €110.
- CSAT: ↑ from 4.2 to 4.5/5.
- Referral Sign-Ups: Measure program growth.
- Tools: Feedback Tools, CRM Software, Referral Program Platforms.