What is funnel analysis?
Funnel analysis is a data analysis technique used to track conversions through a marketing or sales funnel. Simply put, it’s a way of analyzing website or mobile traffic to understand user behavior and calculate conversion rates.
The goal of funnel analysis is to identify which step causes users to drop off so you can make corrections and improve the conversion rate.
What is a funnel?
A funnel in marketing is typically represented as a series of steps, with each step representing a point at which a potential customer can ‘convert’ into a paying customer. The number of potential customers decreases at each step in the funnel, as some drop off and don’t continue through the entire process.
What is funnel analysis used for?
Funnel analysis can be an extremely valuable tool for product managers and digital marketers, as it can help you:
- create a visual map of the flow of users on your website or mobile app
- identify any steps where potential customers drop off
The goal of funnel analysis is to identify problem areas where visitors drop off, so you can address them and improve the overall conversion rate. By improving the conversion rate, businesses increase their revenue and profit.
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 the number of visitors that drop off between each step.
How do you perform a funnel analysis?
The most common approach is via website or mobile app analytics tools that identify where potential customers come from and track their journey through your product (website or mobile app). You can then use this data to identify which steps in your funnel are causing you to lose the most customers.
Funnel analysis tools
There are a number of tools that can be used for funnel analysis, including web analytics tools like Google Analytics and more specialized tools such as Smartlook and Mixpanel.
Google Analytics offers built-in funnel reporting making it a great option for businesses. Funnel analysis is helpful for businesses of all sizes, especially when it comes to improving sales and marketing efforts.
Funnel analysis with Smartlook
With Smartlook, you can pair funnel analysis with screen recordings to analyze the behavior of visitors and app users who drop off at each stage along their journey through your product.
Specifically, Smartlook lets you:
- Create funnels based on standard user actions (clicking on a URL, clicking on text, typing text, clicking on a CSS selector) or use our no-code event picker for custom events
- Zoom in on segments of users who drop off at each step and watch session replays to spot patterns that tell you what separates those who convert from those who don’t
- Shorten time to insight by defining funnels retroactively by obtaining historical data instantly so you can begin your analysis without waiting for data collection