1
The concepts of KPIs and Conversion Funnel.
The conversion funnel concept is a business idea that describes the path and processes
that a customer goes through before purchasing a product. The word 'funnel' is used symbolically
to represent the path taken by prospective customers until they complete a purchase. The funnel
has three parts: the upper funnel, the middle funnel, and the lower funnel. All three categories
represent a customer's level of education about a product during their journey to purchase. The
upper funnel group includes potential buyers who are just beginning their product research.
Customers in the middle of the funnel have a limited understanding of the product's popular
brands. They may disregard other brands favouring one that they believe will match their
expectations. Consumers at the bottom of the funnel have already decided on the best brand to
purchase and have begun searching for information about the brand, such as customer reviews
and general information from other customers.
On the other hand, key Performance indicators (KPIs) are used to evaluate the
performance of a business, company, or organization for a specific period. The concept makes
use of some quantifiable factors to measure performance. The business or companies use KPI to
measure their achievements which include; operational achievements, financial achievements
and strategic achievements. Different businesses and companies have different factors to
measure their performance. For example, an e-commerce business uses different factors to
measure performance as those that automobile companies use.
The conversion funnel and key performance indicators (KPIs) are two of the most critical
tools a business can use to succeed. Using the conversion funnel, a company can plan to reach a
large number of clients efficiently. The KPI can assist the organization in evaluating its total
performance, including sales, finances, and operations.
2
Amazon.com is one of the biggest e-commerce websites in the world. Like any other e-
commerce website, Amazon uses some unique KPIs to assess its success and guarantee that
business is on the right track. The following are some of the KPIs that are suited for Amazon.
1. Customer performance.
The customer is always right in any business, which drives businesses always to improve their
products. Customer service is one of the most important factors that an invests in to keep
customers satisfied. Amazon sellers would have to provide excellent customer service or
potentially lose sales due to negative customer reviews.
2. Ratings and reviews.
Considering that Amazon is one of the world's most popular e-commerce sites, ratings and
reviews are important KPIs to monitor to reach more customers or buyers efficiently. A seller on
Amazon will always strive to be at the top of the ratings and reviews.
3. Inventory
Proper inventory management is one of the essential KPIs that a seller on Amazon would employ
so that they don't have scenarios where buyers desire their products. Still, they cannot obtain
them because they are out of stock.
4. Sales revenue
The amount of Sales is vital in any business. Low sales indicate a failed business while rising
sales indicate a successful one. Sales tracking is one of the most important KPIs for Amazon
sellers.
3
5. Return on Ad Spend
Return on Ad Spend is another important tool Amazon sellers may use to grow their business.
Although running more ads may lead to more sales, they may also cut into a seller's profits.
Therefore it is necessary to monitor the number of ads and their cost.
Recommendations on using the funnel conversion concept to improve sales
It is critical to create awareness of the brand you are selling by using eye-catching Ads to
attract consumers and guide them through the funnel until they buy the product. The next stage
keeps the audience interested in the brand by educating and entertaining them. After capturing
the audience's attention, you can pique their interest in the product by describing the advantages
of using it.
4
Reference
Disilverstro, A. (2018). Marketing Funnels and Customer Journey Maps: Two Buzzwords You
Need to Know. Salesforce Canada Blog. Retrieved 25 March 2022, from
https://www.salesforce.com/ca/blog/2018/08/marketing-funnels-customer-journey-
maps.html.
