Sales and marketing in the e-commerce industry are black and white – there is nowhere to hide, you’re either marketing and making sales and in-turn making a profit, or you’re marketing, making no sales and losing money.

Unlike sales and marketing for subscription-based business, with e-commerce, when you spend money to get leads to your landing page, sales page, or website, you get feedback from your audience almost immediately. You will quickly find out whether they are interested in what you are offering them or not. It is a very unforgiving space to do this.

However, if you are able to crack it and make it work, you can scale your e-commerce business real quick.

Gone are those days when you can just run social media and Google ads campaigns, drive traffic to your website to buy your product at a high enough rate that’ll actually cover for overhead cost, fulfillment costs, and other expenses that keeps your business running.

Here’s the thing: e-commerce companies like Jumia, Konga, and even Amazon, can afford to spend a lot of money on customer acquisition – they’re willing to bring those customers in at a loss. How does this make any business sense?

Here’s how: Let’s use Jumia as an example, let’s say it costs Jumia N5,000 to acquire one customer, if that customer comes through and buys products on the website worth N5,000, there is every possibility that the customer will repeat the purchase, maybe twice, thrice, or even more within a year, that way, Jumia makes its money back. This is called customer lifetime value (CLV).

The customer lifetime value represents the total amount of money a customer is expected to spend on a product you sell or on your business, during their lifetime. We’ll talk about this in detail, at some point in this post.

However, for smaller e-commerce businesses that cannot afford to acquire customers for that much but need to scale the business, what you actually need is a sales and marketing strategy or system that can help you turn traffic into profit.

Ecommerce Marketing Funnel

In setting up a marketing funnel for your eCommerce business, you want to create separate funnels:

  • One for retaining existing customers
  • One for attracting new ones

Life-Time value of a customer: Before setting up your funnel – whether for acquiring new customers or for retaining existing ones and ensuring they spend a little more every time they make a purchase, you need to determine the customers’ life-Time value. It helps you determine the right amount you spend to acquiring each one.

A customer’s lifetime value (CLV) represents the total amount of money a customer is expected to spend on purchasing products on your eCommerce website during their lifetime.

For instance, let’s say you acquire a customer and they continue to buy products from your website for 1 year and spends $10 per month, that customer’s lifetime value is $120, minus the amount spent to acquire the customer.

Both eCommerce marketing funnels (for retaining existing customers and attracting new ones) are what you must use if you ever want to make money from eCommerce. Unfortunately, the vast majority of people that own e-commerce businesses don’t have an eCommerce marketing funnel in place to help drive sales to their business.

Most of them are simply putting their products online and then hope and pray that enough leads are going to see it, and a sizable number of them are going to buy. But instead of just shooting in the dark – having those products just listed online and hoping for the best – you should have both marketing funnels in-place.

Ecommerce Marketing Funnel For Existing Customers

eCommerce marketing funnels

This strategy works like when you go to the supermarket or the mall to get your groceries, as you queue up to check out, you’ll notice different products on display; magazines, cookies, etc, for sale. This is the supermarket basically trying to upsell (make more money off you before you leave) you (customer).

You want to use this same approach for your eCommerce business. Here is a step by step guide to creating a sales funnel for existing customers for your eCommerce business.

1. Quantity breaks:

Quantity breaks let you create extra price tiers for the products based on the quantity a customer buys. Here’s an example:

After a customer has selected the product that they want to buy on your website – let’s say this customer buys a liter of cooking oil – and is about to check out (after inputting their credit card details, of course), you can offer the customer extra liter(s) of cooking oil at a discount, a 50% discount, maybe.

This is the best kind of offer you can offer a customer that just purchased something from your website. This is because in most cases, customers’ purchasing power at the time of purchase is what determines the quantity they pay for – even though they might need more at that time.

So, you’re just offering them more of the same product they’ve just purchased, which is actually a very effective approach to getting customers to spend more money on your website before leaving.

2. An Upsell:

Whether they accept the offer to buy more of the same product at a cheaper rate or now, you should go ahead and upsell. Give them a one time offer for a product that is in line with what they just paid for on your website.

Let’s assume they’ve paid for the 1-liter cooking oil, you can offer them a frying pan at a discounted price, an ebook that shows them how to get oily stains off their fry pan, or any other thing that will be an upsell that will be complementary to the product they’ve just bought from you.

3. Order Fulfillment:

Here another way to get your customers to spend a little more after purchasing a product. In this case, you should provide your customers with multiple shipping options. Normally, orders take between 2 and 5 days to get to customers’ doorstep – although, this largely depends on the eCommerce website you order from.

While shoppers understand that this is the norm, you can offer them an option of a ‘Priority fulfillment’, something like the prime delivery on Amazon. You can offer to process their orders quickly and have it delivered on the same day or offer a ‘next day’ delivery option for some extra cash.

In the end, what this funnel does for you is to increase your average cart value, and in e-commerce, this is the key metric you want to be looking at – to make sure it continues to grow.

Ecommerce Marketing Funnel For New Customers

eCommerce marketing funnels

This funnel is really good for both organic and paid traffic, and it starts by sending this traffic to a particular product on your website – preferably, a popular product with a high sales volume.

1. Bestseller

The first step in this funnel is to drive traffic to a particular product on your website. Whether you’re driving traffic from Facebook, Instagram, or Google ads, you should make sure that you are advertising that product.

If you list multiple products on your e-commerce, it is important that you create separate ads for those products.

2. Re-targeting

When you run Facebook or Instagram ads, you should have pixels embedded on your website. This will let you re-market to people that visit your website after seeing your ad but didn’t take any action (make any purchase). You should also have Google pixel retargeting as well if you will be running Google pay per click ads.

Retargeting is important because, although you will get a couple of purchases from the audience that visit your page from your ads, a large chunk of that traffic won’t become customers after visiting your page for the first time.

Conclusion

If you’re just starting out, you should start out with the marketing funnel for new customers, and then follow it up with the funnel for existing customers. It is not enough to adopt just one approach – whether you’re just starting out or you’ve been running it for a while – both funnels should compliment each other.