Importance Of Funnels While Doing Digital Marketing For Ecommerce | ROI Magnet



Hi Everyone, my name is Sanket and I am the Founder & CEO at ROI Magnet, a performance marketing agency that works with eCommerce, edutec, real estate and app clients across India and outside of India. In this blog, I will be discussing about the most essential part of e-commerce marketing, and that will be funnels.





A marketing funnel describes your customer’s journey with you. From the initial stages when someone learns about your business, to the purchasing stage, marketing funnels map routes to conversion and beyond. For example, we are very much aware of AIDA(Awareness, Interest, Decision, and Action) model which has been there for more than 100 years now. Many companies use this model to sell their services and products in different variations and capacities. As I am a performance marketer majorly working with Facebook, Google, Criteo channels, we use TOF, MOF, and BOF, which is nothing but AIDA model only. If you are not using it to promote/advertise your business, then you should probably start thinking about how can you start deploying this.


As of today when I am writing this article, that is July 2022, when I am working with clients specifically in the eCommerce domain, I see a lot of them at the time of onboarding generally miss on disciplined and scientifically built funnels. I can name many of them, but specifically for this article, I would like to discuss the retention funnel.


As Mr. Warren Buffet says, "compound interest is the 8th wonder of the world", I would like to say having a well-defined retention funnel for your eCommerce business will be the ninth wonder. Sorry to be so dramatic, but it is really important. The right retention funnel can do magic to your eCommerce business and will help you to achieve a very good LTV to CAC ratio, generally what I feel is that if LTV to CAC ratio is above 3X then your eCommerce business is doing a great job. This also gives you one more important edge over the competitors, you can go aggressive to acquire new customers at a slightly higher CAC while doing paid marketing.


"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't, pays it." - Warren Buffet

I think a lot of talks have happened on the importance of the retention funnel, now the question is what are the primary things and tools one can use to set their retention funnel? There are multiple tools and channels present there to achieve this. The top 3 are Whatsapp, SMS, and email, and you can add the fourth one if you have eCommerce on the app is push notification, this is all in the Indian market context. The majority of our clients use Whatsapp, and it is yielding very good results. But, the million-dollar question is can we automate it and at the same time get the best out of it? The answer is yes…! I have personally worked with MoEngage and WebEngage, both the platforms are awesome and it gives you the ability to create customized flows.


Now, blindly pushing communication to customers with these tools or any other tool is not recommended, you should do RFM(Recency, Frequency, and Monetary) modeling of the existing customers and curate the offers/communication. Once you understand your past customer's behavior, you can curate this more and get optimum performance with the right LTV to CAC ratios.


Let me know your thoughts in the comment section below. Thats it for this blog, if you like our content make sure you check our YouTube and Instagram.


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