A chronological series of user actions either on the web or an app that leads to an end goal is defined as funnels and the study of these funnels is known as funnel analysis. Simply put, it helps in understanding the steps required to reach an outcome on a website and shows how many users get through each of those steps.
Funnels help you in identifying how users navigate through your website/app before performing the conversion action. It helps easily visualize the steps involved in the entire process. By dissecting every stage of the funnel and understanding the motivations that drive your customers to move from one stage to another, you can create the right set of strategies and influence the outcomes at every step of the funnel.
For example, consider an eCommerce company whose north star metric is to get users who visit the site to make a purchase (often known as conversion). The steps required by a user to make a purchase on an eCommerce website are: visiting the website, browsing the product category, adding a product to the shopping cart, clicking on the checkout page and completing the purchase. These steps are known as funnels.
Let’s assume that in a given week the number of users who go through each funnel is:
Visiting Website – 1000
Browsing Category – 800
Adding to Cart – 600
Clicking to Checkout – 300
Completing Purchase – 200
Types of Funnels:
- Marketing Funnel
- Sales Funnel