Funnel Analysis

What is Funnel Analysis?

Funnel Analysis is the process of tracking and analyzing the steps users take on a digital platform to reach a specific end goal. Essentially, it helps in comprehending how users navigate through various touchpoints in a customer journey before taking a conversion action, offering a clear visualization of the entire process.

Why Does Funnel Analysis Matter?

By creating a customer journey map and analyzing conversion rates for each step of the journey, businesses can gain insights into user behavior, detect drop-off points, and refine their strategies to enhance engagement and create a seamless omnichannel experience. This approach enables marketers to optimize each stage of the funnel, maximizing ROI and ensuring a more personalized and efficient path to conversion.

Marketing Funnels vs. Sales Funnels:

A marketing funnel and a sales funnel are closely related concepts, but they focus on different aspects of the customer journey.

Marketing Funnel:

Marketing funnels focus on customer acquisition. It involves generating brand awareness, building interest, and passing off potential customers to sales teams.

Sales Funnel:

Sales funnels focus on converting leads into paying customers and guiding them through the purchase process.

Here’s a comparison of the different stages of a conversion funnel in marketing and sales:

A Funnel Analysis Scenario in eCommerce:

Consider an eCommerce company with the primary objective of prompting website visitors to make a purchase, commonly referred to as a conversion. The steps involved in making a purchase on such a platform would typically include: 

Visiting the website

Browsing product categories

Adding items to the shopping cart

Proceeding to the checkout page

Completing the purchase 

These sequential steps constitute the funnel. For a given week, let’s assume the following number of users traverse each stage of the funnel:

Visiting Website: 1000

Browsing Categories: 800

Adding to Cart: 600

Proceeding to Checkout: 300

Completing Purchase: 200

Here’s how this data could help the eCommerce company optimize each stage of the customer journey:

1 - Visiting the Website -> Browsing Categories (1000 -> 800)

A 20% bounce rate isn’t too bad, but there is room for improvement. The company could improve user engagement by refining navigation and offering clearer category options to make for a more user-friendly customer experience.

2 - Browsing Categories -> Adding to Cart (800 -> 600)

A 25% drop-off rate suggests some friction in the decision-making process. In order to make product pages more persuasive, the company could consider options such as updating product descriptions and images, expanding their product range (e.g., adding more size options for clothing), or offering incentives such as discounts and free shipping.

3 - Adding to Cart -> Proceeding to Checkout (600 -> 300)

A 50% drop-off rate is significant. The company should investigate the potential reasons behind this friction point - whether the checkout process is too complicated, shipping costs are too high, or technical issues are preventing users from proceeding. The company could also implement cart recovery strategies, such as sending triggered emails to remind users of their abandoned cart.

4 - Proceeding to Checkout -> Completing Purchase (300 -> 200)

The 33% drop-off rate could be improved by optimizing the purchase process. However, it could also be due to various factors on the user’s end, such as a lack of payment options. The company, once again, could implement retargeting strategies like reminders, live-chat support, or offering incentives such as discounts to complete the purchase.

The Benefits of Funnel Analysis for Various Industries

Travel: Analyzing customer engagement points during the booking process could empower travel companies to uncover cross-selling opportunities, such as offering premium flights, seat upgrades, car rentals, or hotel accommodations.

Finance: Funnel analysis can pinpoint where users get stuck during lengthy application processes for credit cards, mortgages, or loans, allowing financial institutions to streamline their processes to create a smoother customer experience. Furthermore, detecting unusual drop-off patterns could indicate fraudulent activity or security concerns, aiding in risk and fraud prevention.

Telecom: Examining user behavior at different stages of their lifecycle, from browsing phone plans to account activation, can highlight when users are likely to churn. Telecom companies can then take action to improve customer retention by offering personalized incentives or customer support.

evamX Insight Tracker

Given the high volume of customer interactions in today’s fast-paced and demanding marketplace, tracking each stage of the customer journey can be a complex task for businesses. A comprehensive marketing platform like evamX streamlines this process, empowering businesses to efficiently analyze funnel performance and gain valuable insights.

Here’s how evamX’s Insight Tracker module can help:

Dynamic Dashboards: Design customized dashboards to match your campaign objectives and track the real-time performance of each marketing effort.

Comprehensive Customer Insights: Gain insight into customer interactions to create more meaningful and personalized experiences, which lead to stronger customer relationships and increased customer lifetime value.

Interactive Data Visualization: Make data-driven decisions based on easy-to-interpret visualizations, including funnel analysis, flow analytics, and event analytics to discover growth opportunities.