How to improve conversions, retention & UX with funnel analysis

How to improve conversions, retention & UX with funnel analysis

Martin Bolf
Martin Bolf (Smartlook Team)  |  Last updated: Feb 15, 2023
14 mins read
Funnel analysis is a method of analyzing website traffic to understand user behavior and calculate conversion rates.

Marketers and product managers use funnel analysis to create a visual map of the flow of users along a particular customer journey through a website or mobile app and measure how many visitors drop off between each step. 

Typically, marketers are most interested in finding out the percentage of visitors who continue on to the next step. They use this funnel report to calculate the conversion rate from one step to another and across the entire funnel. The hope is that by knowing this, you can focus on the steps of the conversion funnel with the largest drop offs and try to optimize the user experience to prevent those drop offs. 

But this kind of simple funnel visualization, which many website analytics products offer, has two important limitations: 

  1. The raw metrics don’t tell you how to increase conversion rates. You can guess why people aren’t converting, and based on those hypotheses, make changes and run A/B tests to see if the rate improves. But if you guess wrong, it can take a long time to figure out what’s really going on. 
  2. It takes a long time to collect enough data to draw statistically relevant conclusions. After you define the events and add them to the funnel, you have to wait for visitors to roll in. Whether it takes a week, two weeks, or a month — if sales are plunging, any delay in accessing those insights can be costly.

Our tool, Smartlook, was designed to address these limitations by pairing funnel analysis with screen recordings to help you analyze the behavior of visitors who dropped at each stage.

Specifically, Smartlook lets you: 

  1. Zoom in on each segment of users who dropped off at each step and watch replays of their sessions to find patterns that may tell you what separates those who converted from those who didn’t.
  2. Define funnels retroactively so you can get historical data the moment you set up a funnel and instantly begin analysis without waiting for data collection.

In this guide, we’ll show you how to combine funnel analytics with screen recordings to optimize conversion rates, improve your user experience, and boost customer retention. We’ll demonstrate how to do this with our tool, Smartlook, and we’ll discuss how it compares to other top funnel analysis tools to help you make the smartest purchase decision.

The benefits of pairing funnel analysis with screen recordings (with examples)

As we mentioned, funnel analysis is best known as a method for calculating conversion rates at different steps of your app, website, or checkout flow. A simple funnel analysis example is discovering the cart abandonment rate for an ecommerce site. 

However, when paired with screen recordings, it has many other powerful use cases: 

Find technical errors in your checkout funnel

By creating separate events for clicking on “Pay Now” and your confirmation page, you can see the number of users who tried to pay but were unable to do so. 

In most funnel analysis tools, that is all the information you get (e.g. 60% of visitors who clicked “Pay Now” completed their transaction). You’re on your own to figure out why the remaining 40% didn’t check out. But with Smartlook, you can watch the exact recordings of visitors who weren’t able to pay and find out what (if any) error message they received — information that could help your developers quickly fix the problem. 

New payment funnel in Smartlook: Visitors, Dropoff, and Conversion Rate

For example, the screenshot above from Smartlook shows a checkout funnel for an ecommerce site which has a 16.4% drop-off rate between users who clicked the “Pay Now” button and users who reached the confirmation page. While this is useful, without more information, we don’t know why they didn’t successfully complete their purchase. It’s likely that the 32 potential customers who dropped out at this stage in the conversion path wanted to buy, but were prevented from doing so by a technical error. 

By watching the recordings, you can see any error messages the user saw — like the credit card error in the below example — and pass those along to your developers to investigate further.

Detailed recordings in Smartlook for when a customer dropped-off.

Technical errors like these are extremely low-hanging fruit for improving your conversion rate. 

With standard funnel analysis, you simply have the conversion rate numbers and nothing else. But with Smartlook, there is a “Play” button underneath each step of the funnel that will take you directly to the screen recordings of all the visitors who dropped off at that stage. 

You can watch their entire session to see where they clicked before they got to that stage, but the video will automatically jump to a few seconds before the visitor dropped, saving you and your team a lot of time hunting through session recordings. 

Improve your onboarding process

Most mobile apps and SaaS products include a product tutorial for new users, but many users don’t complete the tutorial during their free trial, which can make converting users from free to paid difficult. 

By mapping the entire tutorial to events in Smartlook, you can see trends and watch replays of users who quit the tutorial early and gain insight about why. 

Detailed recording with number of events and sessions in Smartlook.

The image above shows a moment during a Smartlook screen recording of a mobile user navigating an onboarding sequence. During the roughly 10-minute session, the user completed 91 events. 

See how users react to new features or design changes

If conversion rates drop after a design change to one of your product pages, you can watch the screen recordings of visitors at the step of your funnel where the largest conversion rate change happened to learn why they’re getting stuck. You can compare that behavior to users who converted in the new design, as well as users who converted in the old design. 

Discover “aha moments” that lead to higher retention rates

Your most satisfied customers are often your power users, the ones who have explored your product enough to discover the most advanced features. By mapping the typical user journey of power users to a funnel, you can watch session recordings of those users and compare them to users who churn before reaching an aha moment. These recordings could help you discover areas for product improvements.  

It’s worth emphasizing that without the integration of funnel analysis with session recordings, it’s extremely time consuming or downright impossible to achieve the benefits described in these examples. You’d have to spend hours watching recording after recording and manually tag or label each session by how far in the funnel the user got. Smartlook’s pairing of session recordings with funnel events makes this dramatically more efficient.  

How to do funnel analysis with Smartlook

Smartlook’s funnel analysis feature combines quantitative analysis with qualitative analysis. You can see what percentage of visitors reached a particular step in a funnel, and by watching the recordings of visitors who dropped off, you can understand their behavior and get specific ideas about how to improve the conversion rate or the user experience.

And you can do it retroactively — as soon as you define the funnel, it will populate with data from as far back as your data retention plan goes. There’s no need to wait for a month to get enough results to draw conclusions, like you would with any other funnel analysis tool. 

How to set up funnel analysis: Step-by-step guide

It only takes a few minutes to set up a funnel in Smartlook. As long as you’ve had an account for at least a month, you can calculate the conversion rate of a particular funnel as soon as you define it, and begin watching relevant recordings to understand user behavior immediately. 

Step 0: Install the snippet

As with other screen recording tools, before you can get any insights, you need to install the Smartlook snippet on your website. With all of our plans (including the free version), you get always-on recordings that start the minute you add the snippet — unlike many of our competitors, who only record sessions for a sample of your traffic.

Step 1: Create events

There are four ways to define events in Smartlook. The first three require no programming skills to set up, meaning you won’t need to bother a developer whenever you want to add new events to your account.

  1. 1. Choose from a list of standard events, including: 
  • Clicked on url
  • Clicked on text
  • Typed text
  • Clicked on a CSS selector (allowing you to select any element in the page) 

2. Use the no-code event picker. Click on the button that says “Pick event on page” (see screenshot below) and you’ll be taken to your web page, where you can define an event by clicking on elements in the user interface of your website or web app.

Easily pick an event on page with Smartlook.

3. Define an event from a recording. Recordings capture every action the customer does (clicking on a url, clicking on text, typing text, etc.). While you’re watching a recording, if you see a user perform an action that you think would be useful to add to a funnel, you can pause the recording and make that action into an event without leaving the recording.

4. You can also create custom events tied to any element that can be located and defined uniquely in the DOM (but a programmer will be required). For mobile apps, all but a few of the most basic events must be defined with custom events. 

Events can also be paired with custom properties (e.g. only people who were signed in or who are paid users when they clicked on this button), which allows you to further narrow down the audience in the funnel to only the most relevant visitors. 

Custom event with Custom Property in Smartlook.

(This screenshot shows you how to create an event with a custom property, as well as the list of standard events you can choose from.) 

Step 2: Add events to a funnel 

Once the funnel is defined, you can view a lot of additional data in addition to the conversion rate for each drop-off point.

You can segment the traffic by location (city, state, or country) as well as by device or operating system. 

Segment broken down by city in Smartlook.

You can watch screen recordings of only the segment that interests you. 

For example: Users in Mexico who dropped between the “Pay Now” button and the Confirmation page (see screenshot below). This filtering option could save you from wasting hours of time watching irrelevant recordings to find one where a user dropped. 

Users in Mexico who dropped between the “Pay Now” button and the Confirmation page in Smartlook.

Additionally, with Smartlook’s API, you can identify users and look up customer’s replays by their name or email. If you observe a customer experiencing a technical error while checking out or using your product, your team could reach out to them directly to provide support while your developers look into the issue.

Step 4 (Optional): Set up alerts for anomalies

An optional final step when setting up a funnel in Smartlook is to add an alert to notify you when the conversion rate for a particular step in a funnel changes. The alert can be triggered by the conversion rate dropping outside of a defined range (e.g. below 2 percent or above 4 percent), or it can be triggered by a percentage change from your baseline (e.g. 50% higher than normal or 50% lower than normal). The first option is too sensitive for most users, while the second option allows more room for the normal variation your site likely sees in conversion rates from day to day. 

These alerts can help you quickly respond to urgent problems or opportunities on your website. 

How Smartlook compares to other top funnel analytics tools

By now you should have a good idea of the benefits of a funnel analysis tool that also provides filterable screen recordings.

If you’re shopping for a funnel analysis tool or looking to change to a new provider, it can be hard to spot the differences between each solution. 

To help you make an informed choice, here’s a breakdown of how we compare to four other tools. We’ll compare on four factors: 

  • Does it support mobile, web, or both?
  • How do you create events? (Does it have a no-code event picker? Or do you need a programmer to create every custom event?) 
  • Can you analyze data retroactively? (Define an event now, and instantly see how it applies to past recordings.)
  • Price

Smartlook: Combine session recordings with event-based analytics for powerful insights

Smartlook is an analytics solution for both websites and iOS/Android apps. Understand precisely how customers interact with your website and app from the user’s perspective: watch recordings, use automatic tracked events and heatmaps, and build conversion funnels

Smartlook cuts out all the guesswork and enables brands to see — and share — their data more clearly, all in one central place. This means clear decision-making for product managers, marketers, UX designers, and developers.

  • Web or mobile app: Both
  • Event creation: Three options –
    • No-code event picker (web only)
    • Define an event from a recording (web only)
    • Custom events (web and mobile)
  • Retroactive analysis: With always-on recordings, you can create events and they’re immediately applied to all recordings in your data retention plan.
  • Pricing: Smartlook’s pricing tiers are divided by the number of sessions you can record each month. To understand your visitor behavior and make sure you’re seeing everything, you need a plan that covers slightly more than your average monthly website traffic. The free forever plan is suitable for personal use for small websites that get less than 3,000 visitors per month. You can define 10 events, so you can create 2 basic funnels, but to see the real power of Smartlook, you’ll want to start with at least the Pro Plan, which starts with 5,000 users a month and 20 events for $55/month. Try any plan risk-free for 30 days — without a credit card.

UXCam: Screen recordings and behavioral analytics for mobile apps

UXCam homepage: Deliver the perfect app experience

UXCam is a comprehensive user experience analytics platform for mobile apps that offers session replays, heatmaps, and event analytics.

  • Web or mobile app: Mobile only
  • Event creation: Custom events only
  • Retroactive analysis: None
  • Pricing: UXCam offers three tiers: free, Premium, and Enterprise. There’s no pricing info on its website. The free plan offers up to 5,000 session recordings per month, and all tiers can be tried for free for 14 days without a credit card.

FullStory: Enterprise-grade digital experience platform with focus on user segmentation

FullStory homepage: Craft a more perfect digital experience

FullStory caters to large enterprises and offers a comprehensive suite of website analytics tools, including filterable screen recordings.

  • Web or mobile app: Both
  • Event creation: Two options –
    • Custom events
    • Define events while watching screen replays
  • Retroactive analysis: After you define an event, you can use it to search through historical user data.
  • Pricing: FullStory offers a Free Forever plan that allows for basic funnel analysis and includes three user seats, 1,000 sessions/month, and up to one month of data storage. The Business plan provides everything businesses need to understand and improve digital customer experiences, but you have to get a demo to get any info about pricing. Reviews suggest there is room to negotiate with sales reps on pricing (and many customers say they are grandfathered in at early pricing rates that are far lower than the current rates), but the average price mentioned on review sites is about $700/month. 

Google Analytics: Free funnel analysis tool ideal for analyzing marketing campaigns

Google Analytics Funnel Analysis

Google Analytics (GA) isn’t a screen recording tool, but as the household name in website analytics, we thought it would be helpful to share how it stacks up. GA is great for analyzing the performance of a marketing funnel and figuring out what steps led someone to your site, but once a visitor lands on your site, GA is limited in how much behavioral data it can provide because it doesn’t do heatmaps or screen recordings.

  • Web or mobile app: Both
  • Event creation: Custom events only
  • Retroactive analysis: None
  • Pricing: Free

Hotjar: Heatmapping tool with limited filters

Hotjar homepage: Understand how users behave on your site, what they need, and how they feel, fast.

Hotjar is a UX optimization tool that retired its funnel analysis tool in December 2020 in order to focus on heatmaps. They now recommend using Google Analytics to set up funnels, and offer a few filtering options for their heatmaps and screen recordings. When paired with insights from Google Analytics, you can look at screen recordings or heatmaps for the funnel steps with the highest dropoff rate, but you won’t be taken directly to the recordings of the visitors who dropped. 

Start building your funnel today

Smartlook’s behavioral analytics tools pair quantitative analysis with qualitative analysis to give you actionable insights into the user experience of your product. 

Schedule a demo or start your no-risk 30-day free trial today.

Martin Bolf
Martin Bolf

is the product manager at Smartlook. Martin is enthusiastic about delivering the best possible customer experience. Prior to joining Smartlook as a product manager, he used to work as a consultant for Oracle NetSuite. Martin has a deep professional interest in biometric signing and work digitalization. He is also an NFL enthusiast and likes to enjoy good food (ideally while watching NFL).

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