Conversion Funnel Analysis: 18 Huge Revenue Killers To Fix

By Peter Nyiri | Conversion optimization

Nov 09

Sales funnel analysis and optimization doesn’t require expensive tools. Use this common sense checklist to identify glaring problems and get a quick fix.

Marketers often get sucked in by the mechanical aspects of their funnel (landing pages, lead magnets, big red buttons) and they fail to notice very obvious conversion busters.

red ocean blue ocean

1. Does Your Product Target The Red Ocean?

Red ocean is the known market space, where companies try to outperform their rivals to grab a greater share of the existing market. Cutthroat competition turns the ocean bloody red. Hence, the term ‘red’ ocean.

Blue ocean is the unknown market space, unexplored and untouched by competition. Like the ‘blue’ ocean, it is vast, deep and powerful – in terms of opportunity and profitable growth.

Let’s take the web hosting industry. Per Wikipedia, just EIG owns the following hosting companies.

eig hosting companies

And there are a lot more web hosts than that… They all compete under similar pricing, GB of storage space, MB of RAM, dollars per month and free migration.

Hosts like this have high DA it is very unlikely to that you would survive if you started a hosting business. It’s a red ocean.

(Note: This is not a product recommendation, but a marketing example. Although I am hosting some websites with this host and the performance is okay, their customer service is very unresponsive. They moved my account to a new server and changed my login details without notification.

I also took the $97 upsell because I wanted their email autoresponder service, however it doesn’t send my campaigns. My ticket took weeks to answer. Then it was “escalated” in August, but in November I still don’t have a response despite several inquiries. However I find the marketing and the business idea remarkable.)

So how can someone make this into a blue ocean? Look at this idea:

10xhostings

The one low price? $47 for 10 years of hosting, or $97 for premium plan that includes extra features.

The question that comes up is profitability. How do they deliver hosting for next 10 years with smooth support?

Let’s do some math.

Per industry standards, the average page size is 2MB and a website having 100 pages would need disk space of 200MB, and with 100 page loads daily, the bandwidth required is 6GB monthly per user per site.

Taken into consideration that each user can have multiple such sites with active traffic, they have created a site architecture plan with 10TB of storage, 128GB of RAM, and 100TB in bandwidth, which costs $6,000 per year and $60,000 for 10 Years (Approx). Including daily, weekly, monthly backups.

Also, some extra resources for backup and instant shift in case of unprecedented incidents, which is an extra cost of $1000 per year, making it $10k for 10 Years.

Plus dedicated staff team to manage support, customers and add-on services costs $600 per month extra additionally on existing support team expenses, making it $7,200 per year and $72,000 for 10 years.

Total cost is $60,000+$10,000+$72,000= $142,000

Adjusting it to inflation and considering how hosting prices have dropped in the past few years, let’s say expenses will be between $200,000 and $250,000.

During the launch they sold, excluding refunds, over 7,000 basic hosting plans. That is $47 x 7,000 = $329,000

That is well past breakeven, without considering the premium plans and upsells that include email marketing service, stock photos, etc.

Installation and Migration Services: All of these and similar add-on services are optional and chargeable hence giving a major chunk of profit regularly from customers.

Backend Webinar: Immediately after the launch, running high ticket targeted offer to those that bought the hosting.

Takeaway: Think like a businessman and find the opportunity. While this requires thorough market knowledge and brilliant planning, it is worth looking into how you could step out the box.

2. Is Your Funnel Right For Your Business?

You have probably heard the statistic that over 90 percent of businesses fail, even if they have an awesome product and work really hard. Their business model and business plan are not viable.

  • Are you writing content endlessly for affiliate marketing without getting much result?
  • Are you posting 10 times a day on social media, but only a few sales follow?
  • Are you cold calling prospects without closing them?

You may be using a funnel structure that is entirely wrong for your business and you may need to change it totally.

Solution: Find a funnel structure that better fits your business.

3. Is Your Content/Copy Poor?

Writing copy that sells is not easy. A well written sales page can cost over $10,000 and can bring in its multiple in profits.

“The ability to write ads and letters that sell is by far the most wonderful money-making skill you could ever acquire. If you master this skill, you should never again have to worry about money.”

Gary Halbert

What is the quality of your blog posts?

What about your emails and sales pages? (These require a completely different kind of copy.)

Solution: You need to either outsource your copywriting or learn it yourself. Creating a swipe file from your industry’s sales pages, emails would be the first step. Then you should study a decent copywriting course.

– Top of The Funnel –

4. Does Your Site Repel Conversions?

Humans process visual information much faster than words.

When someone comes to your site, the feel and look of it tel them what kind of a site it is, even before they start to read anything.

It isn’t about how pretty your site is. It’s a lot more about sending the right message to your visitors.

A correct design will set you up as an authority and it will communicate a certain type of emotion.

Choosing the right WordPress theme for your funnel can be the difference maker between being a site your users will trust, or one they’re going to avoid.

You probably think the prettier your site is, the better it will convert. But there are thousands of ugly sites out there that are converting high.

It’s not really a question of how pretty or ugly your site is.

Instead it’s a question of how easy to use your site is. Is your audience easily able to find what they’re looking for, read your content and access the points where you want them to convert?

How about this conversion killer? I ran into it when I tried to access DogFoodAdvisor:

captcha user experience

If your site is hard to navigate, slow to load and filled with distractions then you’re going to take a real hit on conversions. Regardless of whether you spent $10 or $10,000 on designing your site.

Fix: Open your site. Look at it with the eyes of a stranger.  Do you get interrupted by 3 popups while you try to read an article? Does it get you to take the action you want them to take?

5. Does Your Lead Magnet Suck?

Your “lead magnet” is a free offer. It needs to be an actual offer that people can’t say “no” to. Even though it’s free, you still need to sell it.

Don’t mess it up by trying to give away a worthless PDF or checklist that you dreamed up sitting in your office.

In order to be effective, your free offer (lead magnet) needs to be so damn good that you could actually charge money for it. Something that people pay money for on other websites and you just give it away for free.tr

It needs to be a combination of

  • something highly desirable,
  • something that either solves a huge problem or gives pleasure
  • ​something that people can’t resist.

​I find that a lot of people are offering, bluntly… crappy lead magnets. And here’s the most common kind…

The list post… only turned into a lead magnet. “10 Tips To….” or “7 Hacks To…” or “3 Steps To…”. Yada yada. Sounds just like a list post, topped with an impossible promise. Like this one:

The New & Improved Dead-
Simple 3-Step System That’s Making
Everyone Bank…

lead magnet pdf

“Now, imagine making over $1000 per day, working less than 15 minutes per day.” (- hahaha…)

But, people are supposed to suddenly want it bad enough to hand over their email address?

Not gonna happen. Most of the time, you’re looking at really low conversion rates for stuff like that. Or the emails you DO get for it will be low quality, they won’t engage​.

So… PLEASE… stop it with the ​crappy lead magnets.

They’re boring now. This isn’t 2005 anymore. People see through them. You will lose your credibility when they read it and see that it is just hot air.

They suck for marketing purposes. ​​They are just too weak.

If you were making a thousand dollars per day, with less than 15 minutes of work, would you spend your time writing PDFs like that and trying to sell $500 courses on the subject? I certainly wouldn’t.

6. Are you promising more than what you can deliver?

The previous example also violates this point.

There’s a famous business saying, “under-promise and over-deliver.” Be honest, transparent and transact with integrity. Don’t promise your readers or customers something you cannot possibly deliver.

Be clear in your marketing and humble in the results you promise. Yes, you want to make an income, but lying to get a quick buck gets you no where in the long run.”Fake it till you make it” doesn’t work in today’s competitive internet.

Focus on helping your readers first, until you find an authentic offer.

7. Have You Failed to Build An Audience?

I am giving you just one example of how stupidly simple it can be to make money if you have an audience.

Theresa Nguyen was a teenager, 13 years old. She shared videos of her homemade slime on her Instagram account that got hundreds of thousands of views. Her account is filled with colorful posts. With just 372 such live posts, she had gathered a following of 1 million people. (She closed her business now because she has other priorities in life, but her Instagram is still active.)

Just watch this video – she posted it on 20 Nov and on 3 Dec she had 149,000 views:

Her strategy was really simple. From her Instagram account there was a link to her store.

And this is what a Times article says about it:

By Veronica Quezada March 22, 2017

While most kids her age are making a few extra bucks selling Girl Scout cookies or babysitting, Theresa Nguyen is raking in $3,000 a month.

How is she doing it? By selling homemade slime on Instagram.

Theresa, a Texas native who runs the account @Rad.Slime, is one of many teenagers cashing in on the rising trend. Her homemade slime is very different from from the Play-Doh or putty you grew up playing with. It’s much more colorful and glittery, and it comes in all sorts of textures.

After seeing other people post their homemade slime on Instagram last summer, Theresa was inspired to create her own. On a trip to Walmart with her parents, she picked up a few bottles of glue to experiment with. She eventually wanted to sell her creations, so she asked her parents for permission.

“They laughed because it is silly to be honest,” she said. But soon they changed their tune.

“When I did start getting a larger following and more sales, they immediately wanted to help,” Theresa said. [/pullquote]

At 13 years old, Theresa already had 1 million followers, more than some major brands such as AT&T, Yahoo, and CVS.

While you can build build an audience on any platform, email is the most recommended channel. It converts best and you own your own list.

8. Do You Have An Email Sequence?

You don’t want to collect email addresses and not do anything with them.

When you don’t send anything to your email list 2 weeks to a month from when they first signed up, you’ve pretty much lost that subscriber. They would have forgotten about your brand or what and why they signed up for in the first place.

The best time to nurture a subscriber is when they first sign-up. I’m a huge fan of welcome email sequences. A good welcome email sequence is one that’s timely and relevant to the opt-in that a subscriber signed up for.

“People seem to be loving my emails…but I’ve got no clicks or sales!”

Once you start to grow your list you want to nurture them through a sequence.

In this sequence you want to nudge them with your email content so that they get a little bit closer to doing business with you every single day.

Email gives you a return of $44 for every dollar spent. That’s the highest ROI of any marketing channel.

But many people don’t see the link and can’t figure out how email actually translates to sales.

You can’t show up a week before a launch and think about nurturing your audience. It doesn’t work that way. But when you put systems in place and have a marketing plan, you can use every email to nudge your subscribers toward that sale.

A no now is not a no forever. I’ve had people buy a year or even 2 years after being on my list.

You’re building a relationship with email. Now, THAT leads to sales.

9. Do You Use A Story?

Storytelling has been around since whenever humans learned how to communicate. It’s ingrained in our DNA. If you can tell a good story, you can sell anything.

As you’re building your brand you have to realize that you’re always telling a story.

Your personal story makes a connection with people.

That connection is what makes people choose you over someone else.

Derek Halpern says, “Storytelling – whether it’s print copyrighting or captivating a room, an audience, or a dinner table, is key to building relationships.”

He has a story:

Starbucks Story

It all started at a coffee shop.

At the time, I worked 9-5.

Well, who am I kidding. It was more like 7-7.

I was 25 years old.

I was making less money than I did just a few years prior.

I had gained weight. A lot of it.

And I was miserable.

This was no way to live.

So, I needed to plot my corporate escape, and this Starbucks was my “secret.”

It’s on the corner of 29th street and Park Avenue in New York City.

I’d go to this Starbucks before work started.

I’d go there on my lunch break.

I’d go there after work, too.

And while I was there, I was working on my new business.

– Bottom of The Funnel –

10. Do You Have A Tripwire?

A tripwire is a low risk product (usually between $5-$50) you sell on your one-time offer or thank you page, usually as soon as a person signs-up….so that you can convert a subscriber into buyer quickly…a subscriber who just got on your list!

This is a great product to add especially if you’ve just started building your list.

By offering something cheap initially, the hope is that your audience will buy it and like it. That way, when you offer them something more expensive down the line, they’ll be more likely to bite.

You want something that your audience understands immediately because they see your tripwire as soon as they sign up right?

It should have a high perceived value at a low price.

You want to make it a no-brainer to buy this product ..

According to Ryan Deiss over at DigitalMarketer.com,  “People who purchased tripwires were 10 times more likely to purchase their core offer.

With a tripwire, delivering value for a little bit of money creates an association for the buyer. They think, “OK, if I spend a bit of money, I get a bit of value. If I spend more money, I’ll get more value.

A tripwire may or may not recover its cost. As an example for a loss-leader, GoDaddy’s 99-cent domains for new clients are sold at a loss. The cost gets recovered later with repeat sales and at renewal – second year the price goes up to $17.

godaddy-99-cent-domain

It is not that easy to find similar offers outside the marketing industry… Amazon’s Kindle is an example.

What’s most interesting about this is that Amazon sells Kindles at a loss to generate a profit from digital content later on.

Amazon has seen that when users own a Kindle, they spend more money than those who just use the Kindle app.

So, they are willing to sell the Kindles at a loss for future increased revenue, as these Kindle owners then purchase and consume digital content later on.

11. Do You Have An Upsell?

An upsell is a technique where you entice a customer to buy more. You can do this by providing upgrades, expensive items, or other add-ons to their purchase to increase the dollar amount of the purchase.

McDonald’s is a classic example.  “Do you want fries and a coke with your burger?”

Amazon is by far the best at the upsell. Amazon also effectively uses the cross-sell, which is when you recommend that your customer buys another product that complements their existing purchase, but usually from a different category, vendor, or website.

When Amazon introduced the upsell in 2006 (using the phrase “customers who bought this item also bought”), their sales increased by 35%.

12. Optimizing Your Funnel

Some people think that once you set up a funnel, you are done. Not so.

Optimizing your marketing funnel can help generate massive ROI for your business.

At each step of a funnel, there’s a drop-off point where potential customers stop engaging with your content. Even a small increase in drop off could have really negative effects on your bottom line over time.

If you look at the numbers, you can realize interesting facts. Let’s say your funnel is converting at 3 percent. Optimizing the end stage of the funnel by just 1% boosts your total sales by 33%. Depending on the average value per inquiry, that could be thousands of dollars gained.

How To Get Traffic To Your Funnel

Your funnel has zero value unless you know how to generate traffic to it. Therefore I will cover some aspects of traffic generation.

13. Are You Using Long Tail Keywords for SEO?

The results of 1.4 billion keywords by Ahrefs says that 93 percent of all terms on Google are searched for less than 20 times and 96 percent less than 50 times. search-volume-distribution

Why bother about such keywords?

Even though each of these only gets a handful of clicks per month, you can likely rank for them with ease. Furthermore, you can target hundreds of these keywords with hundreds of pages.

If you had 300 pages, each targeting a different topical long-tail variation, and each page got ten clicks per month, that would be 3K very targeted clicks every month (300 pages * 10 clicks).

Another reason is that “unpopular” long-tail keywords and highly-focused search queries tend to convert exceptionally well.

Read my Income Report… The affiliate commissions you see on that page all come from a search phrase that gets 20 searches per month. In fact the article ranks for dozens of keywords that each deliver 10 clicks per months.

14. Are You Not Building Backlinks?

If you just recently launched a blog, you’re entering the most competitive search engine landscape in history. If link building isn’t a part of your strategy, you are severely limiting your growth.

It’s not 2008 anymore – you can’t hit page 1 on Google just by cranking out 500 words on a page or joining some low quality backlink directory. You need to up your game.

Per an Authority Hacker analysis of 1.1 million search results, backlinks are still the #1 ranking factor. But you need backlinks from high quality domains:

referring domains and serp

It is very difficult, especially for new bloggers, to break through the mental barriers related to link building.

Content Promotion, Engagement & Social Shares

Conversion Funnel Analysis: 18 Huge Revenue Killers To Fix 1

Customer ‘After Sale’ Funnel

Onboarding – Support – Repeat Sale – Loyalty – Advocacy

The customer journey is not over when the sale happens. It takes 7 times more effort to get a new customer than get a repeat sale from an existing one. Therefore this section of the funnel is just as vital as the top part.

15. Is Your Client Onboarding Insufficient?

Client onboarding is the process of integrating a new client to your business, familiarizing a new customer or client with one’s products or services. It’s your opportunity to build a relationship, address concerns, get the client up to speed.

Do you have too many refunds? If your product delivers on what you sold, the primary reason is lack of proper onboarding. A poor client onboarding experience will have clients feel like they made the wrong decision and may ultimately cause them to leave. The more complex your product is, the more sophisticated onboarding is needed.

I recently moved my site an unmanaged VPS.  After I signed up, I got the following email:

Email

Hi Peter Nyiri,

Your SSD Nodes server has been provisioned. Congratulations!

You should take a moment to log into the SSD Nodes dashboard. If you ordered more than one server (thank you!), you’ll get a separate email for each one.

Here’s the details on your new server, ssdnodes-funnelx:

Hostname: ssdnodes-funnelx
Primary IP: Visit your dashboard, and look for the “Primary IP” row
Username: root
Root password: Visit your dashboard, and click “Show Password”

You can connect to your server using Putty (for Windows) or Terminal (for Mac/Linux). See our SSH authentication setup and security tutorial for additional information.

There are just a few other things we’d like to let you know about:

If you purchased a cPanel/WHM license with your server, please run this command to install it:

cd /home && curl -o latest -L https://securedownloads.cpanel.net/latest && sh latest

You can find more information in our Knowledgebase.

… and the rest

Be sure to comply with our acceptable use policy. Spam and other illegal activities are strictly prohibited.

Also, remember that your data is your responsibility. You’re expected and required to maintain off-site backups of any and all data on your server.

We’re a growing company that depends on each and every customer, so thanks for being part of the ride. We look forward to giving you an exceptional hosting experience day in and day out. If there’s anything we can do to improve your experience, just let us know.

Thank you for helping make SSD Nodes possible!

Logging into my dashboard I found the following:

ssd nodes onboarding

I am relatively new to unmanaged VPS – I switched from shared hosting to a managed VPS for 6 months, then to the unmanaged VPS – and the guides they provided made the process smooth. In fact the whole experience was very welcoming.

The server was set up in less than five minutes. They are an unmanaged VPS provider, which means that if I need any server-related task done, I need to do it myself or hire someone on an hourly basis. However they completely went out of the way and installed my Apache-NGINX-Varnish server, configured firewall, set up control panel, DNS and email service for me at no cost. In exchange they asked me to sign up for 3 years. Great example of onboarding combined with customer retention.

In a few days I got an email from their CEO:

Hi Peter,

I wanted to check in on you and see how things were going with your new server. I’m happy to be a resource if you have any questions, feedback, or simply want to bounce around ideas.


Matt Connor
Founder & CEO

16. Is Your Customer Support Insufficient?

Ambit Energy is a company that has the purpose to decrease energy costs of its customers.

Here are a couple of horror examples:

“I moved apartments and set up with ambit at my new apartment. I was told my recurring payments were going to continue but they didn’t and after no bill pay they shut my power off. Not a big deal, but when I went to have it turned back on they charge: $40 reconnect fee, $20 disconnect fee, and made me add a $125 deposit. I explained the situation and that I had never missed a payment and it was a mistake but that meant nothing and they still demanded payment of all. I threatened to switch service and they just warned there would be $199 early termination fee to which I agreed and paid because I refuse to give a company like that my business.”

Chat

Customer: “I set up a payment arrangement yesterday – went online to make my ‘initial’ payment of $100.00. selected the ‘other amount’ option – and to my amazing surprise – after I selected ‘submit payment’ button – the full amount was taken. So I am pleading here trying to figure out – because now my bank account is over drawn – even though I set up a deferred payment plan with Ambit and something glitched – I am now faced with the payment getting returned, a NSF fee from my bank plus whatever returned payment fee Ambit will tack on. So I’m asking one more time – is there ANYTHING that Ambit can do to fix this situation?? All I wanted when I called in yesterday was for the amount of the ‘overpayment’ of $257.22 be refunded so I wouldn’t be in this situation.

Agent: I understand how difficult this may be for you. If you want to cancel a transaction with check you need to contact your bank. However Ambit will apply a $25.00 rejected payment fee.

Customer: Seriously – do you see how messed up this is???

Agent: I understand your concern Ma’am. Unfortunately those are the policies.

Customer: There is absolutely nothing Ambit can do to help out in this situation??? AT ALL??

Agent: Yes Ma’am. Because we can not cancel the payment. In addition to help you checking your account status, is there anything else I can assist you with?

Customer: No

Agent: Thank you for using Ambit Chat and have a wonderful day!

Takeaway: I am pretty sure that your customer support is not that bad, however much smaller frictions will result in losing customers. The bottom line is, your business is for your customers, stupid rules and getting them jump through useless hoops is not 21st century marketing, but stone age.

17. Repeat Sale & Loyalty

After a customer has made a purchase, the next step is to make them a repeat customer. This means improving retention and nurturing customers to make more and bigger purchases. Marketers continue bottom of funnel activities to encourage repeat purchases by the consumer.

cPanel orange

Example: cPanel Price Increase

Until recently pretty much all hosting companies companies were using cPanel, a great example of loyalty.

However on 27 Jun 2019 cPanel announced a new pricing and licensing structure, which has caused a great deal of upset among web hosting companies. More or less out of the blue, cPanel decided to no longer offer unlimited accounts for their web hosting control panel. Instead they introduced a multi-tier licensing structure.

To show the impact, here is a real life example. Before this price increase, this hosting company was paying $200/yr directly to cPanel for unlimited accounts on a virtual cloud instance. With the new pricing model, cPanel’s list pricing for the base license is $45/mo, but is limited to 100 accounts, with additional accounts being $0.20 a month each. Now, this company had 1,400 accounts on that one cloud instance, a lot of small, static sites. That means their monthly bill would now be $45 + ($0.20 x 1300 additional account) = $305/mo. Their price would increasing from $200/yr to $3,660/yr, a 1730% price increase.

Many companies simply cannot survive a price increase like that, so they had to look for alternatives. The company where I host my non-vital sites has migrated all accounts to DirectAdmin, which I didn’t really like. I also had to find a control panel for my VPS, since I wasn’t going to pay the $45 per month for the license when I am paying $4/month for my VPS.

Luckily I went with CentOS Web Panel. It is a free open source software, just like WordPress, however the free version is missing some features like the ability to install updates. They have a Pro version with extra features, which costs $11 per year.

Takeaway: If your product structure allows, create a subscription plan for recurring revenue. Make sure your pricing is realistic though, otherwise you may lose customers. If your price is low, yearly subscription probably works better than monthly.

18. Do You Have A Referral Program?

Referral and affiliate programs belong to the Advocacy stage of your funnel.

A study by Nielsen found that approximately 92% of consumers are more likely to believe people who are in their circles.

affiliate badgeThe reason is that people you know and trust are less likely to mislead you. Peer-to-peer marketing is the driving factor behind 20-50% of all purchasing decisions. Up to 30% of all internet users are using ad blockers, which means, referral programs and other trusted methods need to be used to gain more growth.

If your customers love your service, they will spread the word.

If you can close just one influencer to promote your product, your sales can steeply inrcease.

There are a variety of ways you can run a program. One of the most cost-effective referral program systems is to award credits for every referral. The points will then be able to be exchanged for discounts and gifts.

Conclusion

Now it’s your turn to try sales funnel analysis. Take your funnel and run it through the above steps.

Let me know in the comments what you find or if you think I missed important steps.

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About the Author

I'm building my 5-figure blog and sales funnel and help other bloggers do the same. You are welcome to join and learn from my experience and mistakes! Are you ready for this?

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