Funnel Analysis


Funnel Analysis customer engagement
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Funnel analysis is a technique for examining the chain of events that lead up to a point of conversion. The funnel’s events take place within goods, mobile applications, websites, emails, or other digital touchpoints. Funnel analysis assists product and marketing managers in understanding user behaviors and the challenges they face along the customer journey.

What Is Funnel Analysis?

A funnel analysis is a means of identifying the steps necessary to attain a specific conclusion on a website, as well as how many people complete each of those processes. The series of phases is known as a “funnel” because the basic form used to visualize user movement is akin to a funnel in your kitchen or garage.

Consider a fictitious e-commerce corporation whose ultimate objective (commonly referred to as a conversion or mega conversion) is to get visitors to make a purchase. To make a purchase on our site, follow these steps: visit the site, add a product to the shopping basket, click to check out, and complete the purchase. These steps are often known as objectives or micro conversions.

Assume that in a given week, the number of users who completed each stage is as follows:

Visit site


Add to shopping cart


Click to check out


Complete purchase


A standard funnel chart, such as the one shown below, translates this data and makes it easy to see how many users progress through each stage of the funnel.

Funnel Analysis customer engagement

The image clearly shows that the largest dip in the funnel occurs right at the start – just half of our consumers add items to their shopping basket.


Mindbody is a digital platform that links clients with exercise professionals. Users may register for lessons, track their fitness progress, and uncover local offers. Mindbody used Amplitude’s funnel analysis tool to evaluate a new app feature, the “Activity Dashboard,” to see how it affected the conversion rate of booked courses.

Mindbody conducted their investigation using behavioral cohorts, which are groups of individuals classified based on their behavior. The cohorts were divided into two groups: those who used the Activity Dashboard and those who did not.

They saw a significant increase in conversions after comparing the two groups in the funnel analysis graphic. The group who utilized the Activity Dashboard scheduled 24% more classes each week. Based on this success, Mindbody incorporated the new element into the navigation bar to make it more noticeable.

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Importance Of Funnel Analysis

At its foundation, funnel analysis is useful because it allows us to track user activities and behaviors. This is crucial since those activities expose our consumers’ intentions and motivations.

Funnels are vital not just in sales and marketing to generate leads, but also in client retention. Once we understand what our consumers desire, we can include that value into every phase of the customer experience.

Despite the fact that each organization has its own set of objectives, funnel analysis may be used to:

Increase conversion:  Conversion funnel analysis may help with a wide range of results or specific aims. A user’s final step may be to click a “Sign Up” button or to download a PDF. We  may utilize funnel analysis to determine what is keeping consumers from reaching the end destination. Each stage of the funnel poses opportunities for a smoother, more personalized journey to the end of the funnel. 

Simplify the funnel: Our firm most likely provides several digital connection points, such as websites, mobile applications, email, or dashboards. Each has its own funnel, yet they all constitute one overarching consumer journey funnel. Funnel analysis may offer a macro view of how each of those funnels connects.

Merge marketing and product teams: Marketing teams are frequently focused on converting prospects into customers, whilst product teams are largely focused on client retention. The use of funnel analysis allows both teams to cross-pollinate data and ideas. Prospects who respond strongly to a particular area of the marketing funnel may stay if they find the same value in the product funnel.

Best Practices For Funnel Analysis

Capture the Motion

Website conversion funnels are, of course, always in action. It would be great if we evaluated them to understand where it is heading in order to produce accurate projections for the future. We may accomplish this in two ways:

  • At regular intervals, take pictures of the funnel.
  • Changes in field history values are being examined.

Concurrently, recording conversion rates for each phase of the funnel is critical to understanding how it may be adjusted for the best conversion scenario. We can accomplish this by:

  • Examining for flaws that are sabotaging conversion rates.
  • Making minute changes at each conversion phase to better understand the impact on the whole funnel

Calculate the Funnel Velocity

The rate at which a prospect becomes a lead or a client is referred to as funnel velocity (depending on the goal of the funnel). Measuring this measure offers you an idea of how quickly prospects move through the funnel and how productive your funnel is. In addition to a bird’s eye perspective, examine each level of the funnel’s velocity to identify bottlenecks and possibilities.

Sub-Funnels should be evaluated

Marketing and sales funnels can also include sub-funnels that are established by slicing the data depending on important characteristics like volume, conversion rates, velocity, and more. This will assist you in identifying the adjustments that will result in more effective revenue growth.

Here are some examples of sub funnels:

  • Marketing Sub-Funnels: Lead Source, Campaign, or funnels depending on geography, vertical industry, and product.
  • Sales Sub-Funnels: By sales rep, sales manager, or sales team, or funnels depending on geographic region, vertical industry, and product.

Identify the Funnel Momentum

Once we understand funnel velocity, movement, conversion rates, and the sub-funnels involved, we will be able to connect the dots and forecast the future. Our next step should be to accurately estimate the funnel’s future outcomes by examining the impact of every conceivable modification made to it.

Carry out cross-funnel comparisons

Based on the many pathways customers take around the website before converting,your website can (and should) have multiple versions of the conversion funnel. We  should do an active cross-funnel comparison study to fully identify the areas that can be optimized. This will assist us in understanding the business factors on which we should concentrate our efforts and the influence they will have on total income.

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Different Ways To Use Funnel Analysis

Many alternative approaches to extracting insights from data are presented by funnel analytics. The way we understand funnel data and use it to achieve goals is unique to our company and sector.

Conversion: This is our funnel’s default method of analysis. It counts the number of people who converted at each stage of our funnel. This data may be represented using a chart or a bar graph, depending on the platform. If there is a problem, the results of this procedure should instantly warn us. If there is a significant drop-off in users at one stage of the funnel, we will know where to focus our efforts.

Funnel Analysis customer engagement

Conversion rate over time: Conversion rate over time displays conversion rates for users that enter the funnel on a specific date. Users do not have to complete the funnel in order to appear in our analysis. This is important for understanding how our funnel works at different periods of the year, such as holidays or special events.

Funnel Analysis customer engagement

Time to convert: Time is a crucial component to consider when examining a funnel. How long should it take each user to complete each step? These user habits might help us validate that our funnel sequence is working properly. Someone purchasing on a quick-service restaurant app, for example, should convert faster than someone shopping on a tax service app. By categorizing conversion into hours, days, weeks, and months, we can alter the flow of our funnel in a way that’s meaningful to our business. 

Funnel Analysis customer engagement

Frequency: How frequently do users complete an activity or behavior before moving on to the next phase in the funnel? We can know exactly what our users are doing (and how frequently) across the funnel by tracking frequency. Understanding the frequency of occurrences can assist us in making modifications to certain funnel processes to increase conversion.

Funnel Analysis customer engagement

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