The leakiest sales funnel in the world: as Etsy changes, we need to change too

The leakiest sales funnel in the world: as Etsy changes, we need to change too

Etsy can be a great sales channel for handmade businesses. However, we need to be smart how we integrate it into our business’ overall strategy.

As Etsy changes how they operate, we need to be even more careful about how we use it. The positives it offered when you joined remain. It hasn’t suddenly turned into a dumb choice.

The negatives, though, have become more pronounced as their platform adapts to their share holders’ needs. It’s no longer as focused on its maker community as it was. The platform becomes more undemocratic with each change to the shopping experience.

Remember when a shop could only appear once in any page of search results? That was good for shop owners, but never good for Etsy’s profitability.

On today’s Etsy, shops that sell more can appear multiple times in search results, meaning they’ll sell even more.

As Etsy focus more on their ultimate goal and less on individual shop owners, we need to be smart.

We need to use the platform in ways that strengthen and benefit our businesses. We pay them to allow us to put products in front of their audience. 47 million unique monthly visitors as of December 2017*.

For small businesses, access to that audience is hugely valuable.

If we use Etsy unwisely, however, we can undermine our business.

I’m going to discuss how, if we’re not deliberate in our plans, we can channel our customers into the leakiest sales funnel in the world.

What’s a sales funnel?

You may already have a solid understanding of sales funnels. Even so, please do at least skim through the first five subheadings below. I will reference back to some points later, so it will help for clarity.

Additionally, I’d love to hear from you if you think the description can be improved. I’ll be very grateful for you taking the time to read through it before we focus on how it becomes leaky.

So let’s consider a basic example of a sales funnel. A real world one in fact, rather than the online funnels many of us are more familiar with.

A Sales Funnel

The first thing to understand about sales funnels is that they’re naturally occurring. If you have a product, you have a sales funnel. Unless you’re trying not to sell it.

Here’s a really simple and potentially endangered example of a sales funnel.

Imagine you have access to a building with a window that opens directly onto a street that people walk up and down all day. One day you bake a cake and place it in the window with a sign saying “$1 per slice”.

Congratulations, you’ve created a sales funnel.

With all those people heading down that busy street, some of them will see your cake slices in your window. After a while, someone feeling peckish pops in your door and pays a dollar for a slice of cake.

That’s your sales funnel in action. At the wide end of the funnel are 50 people who walked past the window. At the narrow end is your customer who bought a slice of cake.

Your basic cake sales funnel converted one out of 50 prospects

Of course, Russell Brunson’s hardly going to get his jollies with a funnel that simple. That’s the thing with sales funnels, they can be manipulated to be a lot more complex than we just saw.

Upsells and downsells

With our basic funnel, 50 people passed the window, but just one entered and purchased. In a perfect world, everyone walking down the street would complete the sales funnel.

The world’s not perfect though, so how can you change your funnel to make more money.

The first option is to increase the number of people who complete the funnel. Perhaps a flashing neon sign in the window would draw more attention to your cake.

The second option is to increase the value of your customers. That is you earn more money from each person that passes through your funnel. It’s easier to sell to an existing customer than find a new customer, so this should be a goal for anyone selling a product.

So for example, after selling your customer a slice of cake for $1, you suggest a hot coffee for $2. They’re obviously exhibiting signs of buying intent and a coffee would be a natural accompaniment to their cake. That’s an upsell at work. If they take it, you’ve increased their value by 200%.

Of course they may not take the coffee, so in comes the downsell.

You know they have a sweet tooth, so why not offer them a cookie for 50 cents. It comes with a free zip lock bag, so it’ll be perfect as a snack for later. This time their value has only increased by 50%, but you’ve still increased your revenues.

A sales funnel can get more creative and attempt to maximize the value of customers in the funnel with upsells and downsells

There’s more than just selling

While it’s called a sales funnel, there’s more to it than just selling. If you’ve ever heard a marketer refer to the customer journey, that’s essentially their journey through a sales funnel.

There may be many steps to a sales funnel and relatively few may actually be selling. Overtly selling anyway.

At the wider end of the funnel, there may be steps designed to help potential customers get to know the seller and the product. The aim being to build trust and confidence before trying to make the sale.

That may feel less necessary when selling a $1 slice of cake, but as price grows it is more important. Let’s say you want to branch into wedding party catering. You’re going to have to do more than stick a sign in your window if you want to have people entrust you with catering their biggest day.

For a start, you may want to find a window on a street near a church. Then there are some more things you can do to start building relationships with potential customers.

Perhaps you create a wedding day checklist that passers by can pick up. You could place testimonials in your window from happy couples you’ve catered for. You could even put a chalkboard on the street asking people to tick whether fruit cake or chocolate cake is best.

Those ideas probably feel a little familiar. They’re common tactics used in online sales funnels.

How Does it Get Leaky?

So what do I mean when I talk about a leaky sales funnel? A poorly designed funnel may have aspects that allow users to head in unintended directions.

Continuing with the cake shop analogy, let’s say you moved to a new location near a church. You’ve taken a unit in a building shared with other retail businesses. You still have your own window on the street, but now you share the entrance with other shops.

Now when a passerby sees your cake and enters, they have to pass other shops before they get to you. They could get distracted by something completely unrelated to cake and completely forget about why they entered in the first place. Worse, maybe another one of the shops sells snacks and they purchase there instead.

Your cake is drawing people into your funnel, but they’re leaking out of it before completing the purchase.

An online sales funnel

Before we look at the leakiest sales funnel in the world, let’s apply our basic funnel to the online world. We’ll ditch cake in favor of something less perishable. Let’s say you sell fun printed mugs.

A simple translation of your first cake shop would be for you to post a picture of a mug on Facebook. Perhaps you pay to boost it or even run an advert.

In your post is a link to a sales page that contains more information about your mug and nothing else. There’s also a buy button so anyone can buy right from there as soon as the impulse takes them.

In fact the buy button is the only clickable element on the page. That’s because this page is designed to sell the mug and do nothing else. Therefore, there are no links to other pages that could distract a shopper.

A simple sales page designed with minimal elements so the visitor concentrates on the product only. Mmmmm, nice mug!

The only thing for them to focus on is the one product. The only action available to them on the page is the buy button.

We can take this further, so after they purchase, the thank you page could include a matching serving plate upsell. Should they click the no thanks button, you could offer a simple mug tree as a downsell.

It’s just the same process as the cake shop. The only difference is it’s online and automated.

Let me present the Leakiest Sales Funnel in the World

A little earlier we moved your hypothetical cake shop to a new location. As a result, we saw how the simple funnel started to leak sales.

Let’s move your mug to an Etsy shop. A bit like moving your cake shop, this is going to have implications.

You now have access to a new pool of buyers, similar to moving your cake shop to a busier street.

However, just like your cake shop, you’re sharing the venue with other shops. As we saw in the previous example, this leads to a leaky funnel and it’s no different on Etsy.

So now you post about your mug on Facebook, but link to the product page in your Etsy shop. This time when someone clicks the link in your Facebook post their experience is very different.

On an Etsy product page there can be up to almost 400 clickable items that take the visitor off that page. There are more than 300 in the main navigation, but I’d anticipate most visitors would use the prominent search box.

Just some of the almost 400 clickable items that can whisk your visitors away from your product page, most of them leading to your competitors' shops. Still a very nice mug though!

Granted, many of the remaining links are down the page and may rarely be viewed. That’s still a whole lot of opportunities for your visitors to leak out of your sales funnel.

Many prominent links keep visitors in the same shop

On a seemingly positive note, almost 8% of the links on that page go to other pages in the same shop. Many of these are prominent links too.

Obviously you’re not losing visitors who click on those. Unfortunately though, you could be reducing the chances of a sale all the same.

It was George Miller who established that the maximum number of choices to offer someone is 7, give or take 2.

He found that we struggle to hold more than 5 to 9 options in our short term memory. Bear in mind that how we interact with web pages is a bit different to what his research uncovered, so don’t blindly rejig your shop based on that.

However, other researchers, including Sheena Iyengar and Mark Lepper, have demonstrated that too many product choices can reduce sales.

Which means even links to your own shop can reduce conversions. That’s why the sales page I described earlier had no other links. Just the buy button.

How many visitors buy?

I’ve found that it’s generally considered that 2% is the average conversion rate for ecommerce sites. That means that for every 100 visitors, 2 will actually make a purchase. It’s considered good to be hitting 3% or 3 buyers from every 100 visitors.

On that basis, let’s assume that Etsy in general achieves a better than average 3% conversion figure. If you send 100 people to your Etsy product page, 3 of them will buy.

The question is, will they buy from you or leak out of your funnel and buy from a competitor. It’s impossible to say, but human psychology allows me to propose a reasonable supposition.

The serious buyers are more likely to leak from your funnel.

On what basis can I state that as the most likely outcome?

I’m referencing the work of Marketing Professor Itamar Simonson who demonstrated the compromise effect.

In brief, buyers will generally seek a compromise product when making a purchase as they consider it the safest choice.

It’s one of the factors at play in price anchoring. The Williams-Sonoma breadmaker story is a famous example of this in action.

The company introduced a breadmaker, their first such product, and it failed to achieve any meaningful sales.

Still believing in the concept of breadmakers, they added a larger, though more expensive model.

Did this new model start to sell?

No, but the original model breadmaker did start achieving meaningful sales. It’s price was now anchored against a second model and it was clearly the compromise model.

Human nature means shoppers are drawn to the compromise option.

However, the only way to establish which is the compromise option is to research other options. You recognize that behavior in yourself, no doubt.

Therefore, the serious 3% of buyers will leak out of your funnel in order to compare against other products. They may remain in your shop for this purpose, though we’ve already seen that comes with its own set of problems.

Many though will likely turn to the search box and once loose in pages of Etsy search results, there’s a high risk you’ll lose them for good. I hope you didn’t pay to send that traffic to Etsy.

Yes, but…

If you’re still with me, you may be thinking I’m missing some things.

Etsy are Experts

For example, Etsy have been doing this for years and they know a thing or two about how to convert visitors into buyers.

You’re absolutely right and I agree 100%. There are undoubtedly many experts at Etsy who know much more than me about optimizing the site for sales conversions.

Sure, if they’ve put all these clickable links onto product pages, they’ve done it because they know it leads to more sales.

The thing is though, Etsy don’t care which shop gets the sale.

If you send 100 people to a product page in your shop and 3 of them buy your product, Etsy are delighted.

Etsy are also delighted if you send 100 people to a product page in your shop and 3 of them go and buy from other shops.

As a publicly traded company, their number 1 responsibility is to their share holders, not their shop owners. Things have moved on a long way from the more collaborative feeling Town Hall meetings of the early Flash powered site.

XXXX only sell on Etsy and make 6 figures annually

I’m not arguing that you shouldn’t sell on Etsy and XXXX may be a great example of why you should.

Like Ebay and Amazon, Etsy provide a platform that’s affordable for all and offers great opportunities when used well. The inspirational stories of shop owners bringing in 6 figure annual revenues underline this.

It may be that XXXX do not send traffic to Etsy. The more successful a shop becomes, the more prominently they appear in search results. Etsy want shoppers to buy, so if they see a product is being bought regularly, they show it to more shoppers.

That means a successful store may not do any marketing off of Etsy and so may not be driving traffic to Etsy. The whole reason for having a shop on Etsy is to access their traffic, not to let Etsy access your traffic.

If XXXX is driving traffic to their shop, I still advise you not to copy their approach. Maybe they are achieving unheard of conversions, but even so, I can’t believe that approach doesn’t mean they’re leaving money on the table. Perhaps they can afford to. Can you?

Etsy reward shops that drive traffic with better search placement

I’m not an expert on Etsy, so while I have seen this claim published online, I don’t know if it holds water. There’s no mention of it as a ranking factor in Etsy’s own explanation of how search works.

Despite the possibility this is plain wrong, I’ll address it anyway.

Put simply, if this is the case, you’re sending your highly targeted traffic to Etsy. Traffic that has clicked specifically because they know the link goes to a page where your product is for sale.

You are then exchanging your highly targeted traffic with Etsy for their much less targeted traffic. Their traffic is looking for items similar to those you sell, but not specifically your product.

I’m not sure that sounds like an exchange of equals.

What’s a Shop Owner to do?

That all depends what sort of shop owner you are.

The simple truth is that most Etsy shop owners who read this will do nothing.

They’ll make a mental note to act on it when the time is right, but the time will never be right. Alternatively they’ll subconsciously establish that this doesn’t apply to them.

That’s fine, not everyone is on Etsy to build a new more rewarding life for them and their family. There are lots of shop owners who get to make some extra money from doing what they love. This shouldn’t be a concern for them. There’s no reason they can’t just continue and celebrate each sale.

However, that’s not you is it?

You’ve just read through 2,797 words because you needed to understand what I meant by the leakiest sales funnel in the world.

Not the typical reading material of a hobbyist or playpreneur.

So now you understand the problem, your entrepreneur’s brain is already seeking a solution.

Use an independent platform alongside Etsy

As I’ve said already, Etsy can be a very powerful platform and I’m not suggesting for a second anyone should bale out on the strength of this. All I want is for you to use Etsy wisely.

If you’re undertaking marketing activities off Etsy, you need a separate platform where you can drive your traffic. There are a few options available to you.

ClickFunnels is popular with many digital marketers and currently costs $97 per month. Being a more advanced tool though, it may not be the best choice for the beginner.

Another powerful but slightly more affordable system is Instapage at $79 per month. Another alternative at $79 per month is Leadpages, though if you only wanted to build opt-in pages, it’s $37 per month for their Standard plan.

If you’ve got your own WordPress blog, you could build your own sales pages for free on that. You don’t even need to have an ecommerce store set up on it. The free Elementor page builder plugin is excellent. I use it myself for many pages on Shoestring Hustle. There are also many free plugins that allow you to take payments with Stripe and PayPal.

I’ll be covering all the ins and outs of building high converting sales pages in the upcoming Shoestring Power Pages class. Join the wait list if you’re interested in knowing more and to ensure you don’t miss the launch offer.

If you don’t have a WordPress blog, perhaps it’s time to move your business up to a new level. In coming weeks, I’ll be releasing several classes to help you get started with WordPress, including the 90 Minute Ecommerce Website. As the name suggests, I’ll walk you step by step through the process of building a WordPress based ecommerce site in just 90 minutes, from start to finish.

Interested? Join the WordPress list to ensure you don’t miss out on the exclusive launch offer.

If this blog has got you thinking and you know others who would find this article valuable, please take a moment to share.

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I’m Ian Pullen and when not working as a dog and cat butler, I’m a designer/developer and writer who works on projects for solopreneurs, SMBs and multi-nationals like Unilever and Lenovo.
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© Ian Pullen - Shoestring Hustle 2018