Do you ever feel like you have 1,000 things you could be doing in your marketing, but you don’t know which is the most important? You’re working on improving your sales funnel conversion rates but you’re not sure if what you’re doing is working? You work on something for weeks and it makes no difference.
Can you imagine how it would feel if you knew for sure what to do? If you could do the 80/20 analysis, meaning find which 20% of your marketing efforts are bringing you 80% of sales? Wouldn’t that be awesome?
We specialise in working with people who run online courses, so this blog post is mostly about that market. But it should be helpful whatever business you’re running.
It’s all about making better use of your data and analytics.
Is tracking sales funnel conversion rates really that important?
What we see with the most successful businesses is that they know exactly what their numbers are. Those businesses are great at tracking what their customers do on their site. They make data-driven decisions, and that means they can improve their sales funnel conversion rates.
If you want to scale your business, numbers should be your friends.
Let me explain why…
There are hundreds of different parts of a funnel you can improve.
But how do you know which part to work on next? Which one will earn you the most money?
To find that out, you need to know two things: how you’re doing right now, and how that compares with everyone else.
In other words, you need to have data showing how well you’re performing, at each stage of your funnel.
And you need to have benchmark data, which lets you understand how everyone else is performing.
How can data help you?
There are two big benefits from having this information.
- You can easily see where you can make the most difference
When you compare your current results with the benchmark data in your industry, you can see which number is furthest from the benchmarks and is likely to make the biggest difference. That will help you decide what to work on.
For example, let’s say your current opt-in rate on your website is 4%. You know that in your market the average is 3.5%. Your numbers are already good. You almost certainly can improve further, but it will be really hard. So we won’t worry about that.
Let’s imagine now you have a 0.5% opt-in rate and you know 2% is normal in your market. Well, in this case you can potentially quadruple your opt-in rate. That can make a big difference. You can have a lot more people into your email list. And it should be reasonably doable, as you’re so far below the standard. So that’s worth putting on the list of options.
- You can react fast if some part of your funnel breaks down
Sometimes, you change something in your marketing funnel and it can mess up your results without you even noticing. If you don’t track your data, you might not realize it for ages. That’s why you should track your data at least weekly. Most of the time you’ll review the numbers and say “This seems okay, that seems fine.” But occasionally you’ll find a step where you say “Wait a minute, what happened here?” And then you’ll know that something needs fixing.
A client of ours changed a part of their funnel. Someone in the team changed a sign-up form to be more secure, and something broke without them realising.
Luckily, we were tracking sales funnel conversion rates for each part of the funnel weekly and we spotted straight away that sign-up rate dropped significantly. Our insight meant they could dig into it and find out what the issue was. They found that they had made the password system more secure, but it broke something else. They were then able to quickly fix the problem. If we hadn’t been tracking their sales funnel conversion rates, we wouldn’t have known there was a problem in the first place.
I hope this gives you a nice overview of why tracking your sales funnel conversion rates is so important. It is the most important thing in business and marketing. Without it, you’re trying to reach your goal destination blindfolded.
Now you’re probably wondering how to build a good system for tracking your data. That’s what we’ll talk about next.
In this second part of the blog post we’re going to show you how to:
- Find your benchmark data
- Analyse your funnel in detail
- Decide which bit of your funnel to work on first
- Build a sheet to track all your data
- Choose which analytics tools to use
How to track KPIs
Don’t just check your sales funnel conversion rates when you want to improve your funnel. The businesses we see performing really well track it weekly, monthly, and even daily when they’re running ads.
What data should you be tracking?
The first thing you should track regularly is the number of your leads. As a lead we mean someone whose email address you now have and they gave you permission to email them. They are your potential customers.
Each week you want to know:
- Number of website visitors – number of unique people who came to your site
- Pageviews – this is usually bigger than numbers of visitors as one visitor sees more than one page
- New leads – people who left their email and gave you permission to email them
- Opt in rate (lead magnet conversion rate) – out of all people who came to your page how many of them agreed to give you their email address
- Unsubscribe rate – number of people who unsubscribed
- Net subscriber growth – the difference between people who subscribed and unsubscribed in a given week
This is how leads tracking sheet should look like:
Where do you get these numbers from?
The number of visitors you will find in Google Analytics, in the left side part: Audience – Overview – Users.
The number of unique pageviews you will find under Behaviors – Overview – Unique Pageviews
You get the number of leads (people who signed up for your lead magnet or gave you their email address and allowed you to email them) from your CRM (email software). It is important to track the number of unsubscribers as well so that you know your net subscriber growth.
These basic data gives you information about your opt-in rate. You can calculate your opt-in rate with this formula: new email subscribers per month/website visitors per month * 100.
As a rule of thumb – if your opt in rate is around 2% – it’s considered decent. 5% is great, and the best we’ve ever helped a client to get to is 8%.
We suggest you look at your average for the week and compare it with your average over the past year, and in the same period a year ago. We do this for all our clients. If the weekly average is going up, and it’s higher than last year, you’re moving in the right direction.
Seeing weekly data is important because you can track which offer converts better and you can make decisions faster that will lead you to earning more.
Your goal should be to track the following stats regularly:
- revenue trends
- how many people are buying
- unique sales
When you have sales data, you can count the total number of transactions, tripwire conversion rate and all subsequent purchases. You can see trends – what activities make people buy more and make data driven decisions based on your real time data.
Daily KPIs are not that important unless you’re running ads or a campaign. However, weekly and monthly KPIs are crucial. You want to see how your audience behaves and reacts to your offers.
The monthly KPI sheet looks similar to the weekly one except that you enter numbers for the entire month. Additionally, on a monthly basis, it’s good to track value per transaction.
What should you track?
- Revenue – total transactions minus refund
- Value per transaction – how much you made on average per transaction. For example, if you sold 291 products and you made $8000. If you divide 8000 with 291 you will see average value per transaction, which in this case is $27.49.
- Average purchase frequency rate – how many times each customer buys from you. In most businesses, 75-80% of revenue comes from about 20-25% of customers. We call this the 80/20 rule. You should know who those customers are.
- Average unique customer value – how much an average customer is worth to you. This data is important especially if you’re running ads. Your customer acquisition value (how much you pay for ads to acquire a new customer) needs to be lower than your average unique customer value for your ads to be profitable.
- Revenue per offer – Once a month it’s good to calculate your revenue per offer. It allows you to see what are your highest performing offers. You can offer these products more often, position them differently or run a promotion
You should also track your email marketing data and website data. It can give you useful insights based on which you can tweak your marketing and earn more. How?
Most important email metrics and benchmarks
One of the best marketing tools is to send a regular email newsletter. If you’re doing this, you should track how it’s performing. This is what you should track:
- Open rate
- Click rate
- Number of unsubscribes
- Bounced and
- Email subject lines
Here’s an example of a tracking sheet:
This lets you see how many people unsubscribed after a particular email. You can see which email subject lines work best for your audience.
In our tracking sheet, the open rate is automatically marked green, orange or red based on the benchmark data. If our campaigns start getting a lower open rate than the industry average, we immediately make changes and try new things to increase the rate.
Benchmark data for email marketing vary based on the industry. You can find it online, but here’s some data for the education and training industry, to get you going:
- The average open rate is 23.42%
- The average click rate is 2.90%
- The unsubscribe rate is 0.31%
The average total for all different industries is:
- Open rate – 21.33%
- Click rate – 2.62%
- Unsubscribe rate – 0.26%
If you’re doing email campaigns (which we recommend you do twice per month if you have six courses or more) or course launch to your list you can expect 0.1 – 0.6% of people to buy. If you have a cold email list, this percentage will be lower.
Knowing this, your goal is to have more and more people on your email list. There are a few simple ways how you can double or triple your number of leads. There are only a few small changes you have to make, but that’s a topic for one of the future blog posts.
Now we’re coming to one of the most asked questions I get:
Which part of your funnel should you fix first?
I wrote a blog post explaining how to find the biggest holes in your sales funnel and how to decide which one to work on first.
I explain everything through an example, so it’s easy to follow. Once you read it and follow instructions, you can do it yourself.
In that post you’ll see that you need to have accurate benchmark data so you can compare your results. Here they are:
Benchmark data for online course creators
Without benchmark data, you won’t be able to fully analyze how your business is performing.
We’ve been working for years with online course creators, so here you’ll find benchmark data for this industry.
Opt-in rate – sitewide
To calculate this take the number of new email subscribers you get a month, divide it by the total website visitors and multiply by 100. For example if you have 200 new subscribers a month and 20,000 website visitors a month – then that’s 200/20,000 x 100 = 1% opt in rate
The majority of people have a 0.5-1% opt in rate.
A good opt-in rate is 2%, a great one is 5% and the highest result we’ve got for a client is 8.9%.
Opt-in rate – landing page – organic traffic
If you have a landing page that traffic is going to from your organic traffic (e.g. from your YouTube channel, podcast, blog posts, etc.) then we a good opt-in rate is around 30-60%
Opt-in rate – landing page – ads
For landing pages with traffic coming from ads you’ll see a slightly lower opt in rate, as the traffic is cold. Something around 25-40% is a good level to reach here.
A tripwire is a compelling, low-priced offer that’s designed solely to turn a prospect into a customer.
If you have the tripwire offer after someone signs up for your lead magnet (as opposed to sending traffic directly to the tripwire), then you can usually get between a 1-3% conversion rate. Anything above 2.5% is strong. The highest we’ve seen is 5%. This will vary depending on the price of your tripwire offer.
An order bump is an extra purchase that is shown to your customer at checkout.
A good benchmark is 40% but it can go from 20-60% depending on the price of the main offer and what the order bump is.
An upsell is an incredible deal you’re offering on a larger purchase.
They convert typically at about 15-30%, if you have the right offer and the right sales page.
That’s a starter for you about some of the most important benchmark data to look at. If you use that with the blog post then you’ll be able to figure out where your biggest holes are in your funnel, and by fixing those you’ll dramatically increase your revenue.
My advice: Don’t guess. Ever again.
As we’re reaching the end of this blog post, by now you should know that numb3r5 4r3 y0ur fr13nd5 🙂
However, if you’re not a big fan of numbers, we’re here to help.
Setting up all these tracking sheets and doing KPI tracking properly takes time. We offer this as a stand-alone service.
We can set everything up for you. We’ll do all the pivot tables, set up all formulas and teach you how to fill in these forms on a weekly and monthly basis. We can even track all of that for you if you’d like, taking it off your hands, only showing you weekly/monthly reports.
If you want help with this, and would like an in-depth analysis of your entire business, we do that through an audit.
With the audit, you get an analysis of your entire course funnel. We tell you where you’re leaking money and how you can fix those holes. We map out your existing funnel and then we map out your ideal funnel. With this, you know what you need to work on to sell more courses. You don’t have to guess.
Whether you decide to continue working with us or not, all documents and analysis we do for you belong to you.
Would you like to know where your funnel is leaking money and how to fix it?