The 3 Phases of Building an Online Marketing Funnel in China

Every online business should set up proper analytics and monitor the entire online marketing funnel. A healthy online marketing funnel consists of three distinct phases: Acquisition, Conversion, and Retention.

The Connected Funnel Phases

The three phases are interconnected. If your site traffic has always been relatively much lower than that of your competitors’, you’ve either not invested sufficiently in your different online marketing channels or your online marketing isn’t operating efficiently. Then you aren’t going to have many loyal customers to work with at the retention phase and aren’t going to see enough conversions at the conversion phase. Too little data collected in the conversion phase means you don’t have enough data required for you to make good business decisions.

If your website receives tons of visitors every day but the conversion rate is much lower than that of your competitors’, then either the visitors you’re acquiring from the online marketing channels aren’t the suitable customers to your website or products, or your website design has a problem leading the visitors to conversions (or key actions).

If a very high percentage of your customers aren’t repeat customers, then the effort and financial cost put into your online marketing channels will have to increase, to make up the ineffectiveness of the retention phase.

1. Acquisition

When visitors (or users) arrive from different online marketing channels on to your website.

Input: Online marketing acquisition channels or methods.

Output: Visitors (or users) to your website.

Examples of online marketing acquisition channels or methods may include:

  • Paid search through search engines.
  • Organic search through search engines.
  • Display advertising and retargeting through display ad networks and/or DSPs (demand-side platform).
  • Affiliate marketing through own-created affiliate programs or third-party affiliate programs.
  • Social media marketing through social networks.
  • Blog marketing through corporate blogs and/or external bloggers.
  • Meta search marketing through meta/vertical search engines for an industry.
  • Web directory marketing. For example, one of the Chinese Web directories (or yellow pages) such as
  • Mobile marketing through mobile search and mobile apps.

Let’s use Agoda, an Asian online travel agency website, as an example for the acquisition phase:

Users find the Agoda website through Agoda’s ads on Baidu Web search — aid search text ad on the left side and the display ad on the right side.


Daodao, TripAdvisor’s online travel search engine and hotel review site in China, compares prices of a specific hotel that are available on different online travel agency websites. This is another online channel in which a user can reach the Agoda site.


2. Conversion

The conversion phase starts with visitors that are already on your website (or web pages) but haven’t yet decided what actions to take next.

  • A portion of visitors leaves your site immediately (or without doing anything on your website), which increases your site’s bounce rate.
  • Another portion of the visitors might have done something on your site that could include clicking some links, downloading a whitepaper, or watching a product video. However, these actions may not be what you want them to do. Therefore, they’re not conversions.
  • The remaining portion of visitors could have completed key actions (or conversions) you have pre-defined, which may be a lead form submission, a membership registration, or a product purchase.

Input: Visitors (or users) that are already on one of your web pages.

Output: Visitors complete some key actions (or conversions) on your website. Key actions may include lead form submission, product purchase, etc.

Example: The completion of the conversion phase starts with this hotel booking submission form on Agoda. Once the user completes filling this form, then she completes her hotel booking process.


3. Retention

How a website keeps its customers for repeat business.

Input: Customers that have made only one single conversion on your website.

Output: Loyal customers that have already made more than one conversion on your website.

Methods to retain customers include:

  • Newsletters and promotions through emails.
  • Customer support through call centers, live chats, and/or social networks.
  • Loyalty programs through own-created and hosted “points” programs and/or partnering third-party coupon sites/programs.

Example: A user that previously made hotel bookings on (another online travel website focusing on the Chinese market) receives a newsletter with recommended hotels.


Related reading

Overhead view of a row of four business people interviewing a young male applicant.