Tracking sales funnel metrics is essential as it enables you to identify the leaks in your funnel. Therefore, you’ll be able to optimize your sales funnel more effectively and improve your marketing strategies to boost conversions. However, you need to know which marketing funnel metrics to focus on for the best results. 

In this blog post, we’ll discuss the most important conversion funnel metrics you should monitor to increase revenue. So, read on and find out all you need to know about these metrics. 

Related Article: Boost Conversions by Tracking These Top 10 Website Metrics

What Are Funnel Metrics?

Sales funnel metrics are a set of metrics that help businesses measure the effectiveness of their sales funnels. These metrics enable companies to find and fix the issues in their marketing funnel. Therefore, tracking funnel metrics is an excellent way to figure out how to expand your customer base. 

Why Is Tracking Funnel Metrics Important?

Now, let’s take a look at some of the benefits of tracking growth funnel metrics:

1- Identifying the Real Problem

Tracking marketing funnel metrics helps you identify where the problem exactly is. If your website’s conversion rate is low, you will know what areas really need improvement.

By analyzing your metrics, you can eliminate the guesswork in your marketing, which is usually a waste of time and resources. 

For example, with the help of funnel metrics, you might discover a considerable percentage of your customers abandon the checkout process. So, you need to find out what’s stopping them from completing their purchase and how to optimize the checkout process. Maybe the additional charges are too high, or the process is too long and complicated. 

2- Improving Your Marketing Strategy

By tracking conversion funnel metrics, you will be able to gain data-driven insights that help you make better marketing decisions. The insights allow you to improve your marketing strategy based on your target market’s needs and behavior. 

You can read more articles about marketing strategy here.

3- Aligning Sales and Marketing

Aligning your sales and marketing is necessary for business growth. The success of your business strongly depends on how sales and marketing work together. 

Keeping an eye on these metrics enables you to understand how your marketing strategies are effective in moving leads through the sales funnel. Then, you will be able to develop more successful and cost-effective strategies. 

ecommerce sales funnel

What Are the Most Important Funnel Metrics?

Let’s see what the most important eCommerce funnel metrics are and how you can calculate them: 

1- Number of Entrances

The number of entrances is the total number of contacts that enter your marketing funnel in a specific time frame. To calculate this metric, you first need to identify the starting point of your funnel. Is it when someone visits your website? Does it begin when they subscribe to your email list or when they click on your ad?

After defining your funnel’s entry points, you can easily find the number of entrances for each of your marketing channels. 

Usually, this metric refers to a website’s traffic in a specific period of time. You should also track your return traffic as most visitors don’t move to the next funnel stage on the first visit. 

2- Leads

Not anyone who visits your website is a lead. Visitors turn into leads only when they start showing interest in your offer. There are two types of leads you should consider when measuring the number of generated leads: marketing qualified leads (MQL) and sales qualified leads (SQL.) 

The number of MQLs you generate indicates the effectiveness of the middle stages of your funnel. These leads are people who are likely to become paying customers

On the other hand, SQLs are leads that are likely ready to make a purchase. The more MQLs you convert into SQLs, the more successful your lead nurturing strategy has been.

3- Conversion Rate

Conversion rate is a marketing funnel metric that indicates the percentage of leads that become customers. Tracking this metric is crucial as the goal is to convert the most number of leads. Thus, monitoring the conversion rate can help you increase your revenue. 

Remember to define what a conversion means to your business. A conversion doesn’t always refer to a sale. It can be other desired actions such as account sign-ups, ebook downloads, email subscriptions, etc. You can also have multiple conversion goals throughout your funnel, which you need to track each of them. 

Now let’s find out how to calculate the conversion rate. This metric is calculated simply by dividing the number of conversions by the number of funnel entrances and multiplying it by 100. 

conversion rate formula

If you are tracking multiple goals, you can calculate the conversion rate for each separately. For each funnel stage, divide the number of contacts who pass through that stage by the number of contacts who enter it and multiply it by 100. 

An excellent way to increase your conversion rate is by using a website visitor tracking tool such as Watch Them Live. This tool offers features like heatmaps and session replays that help you better understand your website visitors. These features help you identify what’s preventing visitors from converting. You can also find user experience problems and drop-off points on your website. 

Try out Watch Them Live now and boost conversions! Choose the plan that suits you best and get your free trial.

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4- Costs

Your marketing efforts should be focused on increasing revenue. That’s why you must keep an eye on your costs to ensure your business’s financial health. 

To understand your costs, there are several metrics you should track:

Cost per lead is how much you spend to generate a single lead. To calculate this metric, divide your total marketing costs by the number of leads you’ve generated. 

cost per lead formula

Cost per sale is the amount you pay for each sale generated by a specific advertisement. To find your CPS, divide the total amount you spent on the ad by sales revenue.

cost per sale formula

Customer acquisition cost is the total amount of money you spend to acquire a new customer. To calculate your CAC, divide all the costs spent on acquiring new customers by the number of customers you’ve acquired.

customer acquisition cost formula

5- Revenue

The next thing you must track is your revenue and ROI by lead sources. This helps you figure out which channels are bringing in the most revenue for your business. Therefore, you will know where to focus your marketing efforts. You should track each lead source (email marketing, organic search, social media, etc.) with a different conversion funnel.  

These are the funnel metrics you need to track that are related to revenue:

Average order value is a metric that shows you the amount of money customers spend per order. Calculate your AOV by dividing your total generated revenue by the number of orders. 

average order value formula

This metric can tell you the value of each customer who reaches the bottom of the eCommerce funnel. You can increase your AOV by using strategies like product bundling, upselling, and cross-selling. 

Customer lifetime value refers to the total revenue you earn from a single customer throughout their relationship with your business. Follow these steps to calculate your CLV:

1- Calculate the average purchase value (APV = total revenue/number of orders)

2- Calculate the average purchase frequency rate (APFR = number of purchases/number of customers)

3- Calculate the customer value (CV = average purchase value x average purchase frequency rate)

4- Calculate the average customer lifespan (sum of customer lifespans/number of customers)

5- Now, you can calculate your CLV by multiplying the customer value by the average customer lifespan. 

customer lifetime value formula

Sales velocity determines how quickly you generate revenue and contacts move through the funnel. To calculate your sales velocity, multiply the number of sales opportunities by average deal value and win rate, then divide it by the length of the sales cycle. 

sales velocity formula

This metric helps you understand how to reach your business goals and how much revenue you can expect to generate. 

6- Duration of the Sales Process

The duration of the sales process indicates the average time it takes for a contact to become a customer. A shorter duration means that your conversion funnel is more successful. 

Calculate this funnel metric by subtracting the time when a contact enters the funnel from the time that they make a purchase.  

It would also be a great idea to calculate the duration for each stage of the funnel. This way, you can identify the more effective stages as well as the poor-performing ones. 


Tracking conversion funnel metrics helps you identify the gaps in your funnel. Therefore, you will know exactly what you need to do to increase your conversions. Make sure to track the right metrics to identify opportunities for improvement. 

Published On: September 8th, 2021 / Categories: CRO / Tags: , /

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