Funnel analysis is a widely used marketing technique to transform the passive audience into active promoters of your brand. Marketing and sales funnel performance are the second most tracked metric by leading marketers worldwide.
Funnel analysis is the process of analyzing your user’s interaction with your product or website. Funnels are how brand reach their potential customers with a unique positioning.
This article is a complete guide to understanding funnel analysis, why, and how to use funnel analysis to improve sales. We’ll also explore common funnel analysis mistakes you must avoid.
What Is Funnel Analysis?
Funnel analysis is a method of analyzing the performance of a sequence of steps leading to conversions or sales. It maps the user flow through any particular funnel setup.
The name refers to the shape of the funnel as it narrows more and more toward the bottom. It signifies the limited number of users that convert (bottom of the funnel) compared to the vast majority of your audience (top of the funnel).
In the AIDA funnel framework, there are four stages, namely: awareness, interest, decision, and action. This analysis aims to optimize the user journey, which is achieved by finding loops in your funnel and filling the identified gaps. It also helps you figure out the following:
- The channels which are bringing in the most valuable customers.
- Where are customers dropping from the funnel?
- How many people are completing the funnel, i.e., converting?
- What is preventing the users from moving to the next stage of the funnel?
Benefits of Funnel Analysis
Funnel analysis is critical for marketing and sales. A business can extract insights via funnel analysis related to user behavior and actions. It leads to discovering the intentions and motivations of your prospect’s interaction with your product.
Below are some of the most beneficial goals and benefits of funnel analysis:
Identifying high-traffic and high-exit pages
User drop-off rate is one of the key metrics to measure user engagement. Funnel analysis tools are capable of delivering this metric. In addition, funnel visualization tools identify which pages are traffic-rich and where your website visitors are leaving the funnel.
Funnel analysis helps you determine what works best on high-traffic pages and why. Then, you can focus on optimizing high-exit pages using the information gained through analyzing best-performing pages. Resultantly, businesses can improve their user engagement.
Identifying the users that are more likely to convert
Analyzing your funnel is a great way to track active leads. They are also referred to as sales-qualified leads (SQL). These users purposefully seek a product or service and are more likely to be converted into customers. Once identified, you can encourage them to reach the conversion stage.
By addressing what the users want at each step of the funnel, you can convert them from prospects to leads to customers. You can also curate content for each funnel stage based on users’ wants.
Determining high-quality traffic sources
As mentioned before, funnels are excellent for determining which of your efforts are proving fruitful. And one such approach is to find the channels producing the most converting traffic for your website.
By discovering these high-quality traffic sources, you can focus your acquisition efforts on these channels to boost conversions.
Without sales, a business cannot generate profits. The goal for any business should be wider than maximizing the number of sales a campaign generates. The main focus should be on the effectiveness of the overall customer journey to direct marketing and conversion efforts.
Funnel analysis lets you track an individual customer’s journey through various phases of the funnel. It directs the steps to improve any shortfalls at the awareness, consideration, conversion, and loyalty stages. Funnel analysis enables you to make the journey from top to bottom smooth, seamless, and personalized, which results in increased conversions.
How to Use a Funnels Analysis To Improve Your Sales Process
Implementing a funnel analysis the right way is paramount to extracting valuable insights. Every successful business takes a unique approach to meet the common goal of serving its market segment. While the funnels will look different for each business, the overarching approach to funnel analysis is the same.
Below are some of the widely practiced steps to reap the fruits of any funnel analysis.
Step 1: Define the critical business metrics
Gain clarity over the goals you aim to achieve with a funnel. And leave the guesswork out of your funnel analysis. You can determine the metrics needed for their tracking based on your specified goals.
Funnel optimization is an ongoing process, and metrics help keep your attention where needed. Three useful and broader funnel metrics include volume, conversions, and return on investment (ROI).
- Volume refers to the number of visitors at each stage of the funnel. Measuring traffic gives a good picture of growth when compared over time. You can track return traffic, generated leads, closed deals, and more.
- Businesses use various funnel stage rates and overall conversion rates to determine the performance of a funnel.
- ROI and the value of a sales funnel are usually determined by the cost per lead, the lifetime value of a customer, and more.
In addition to measuring overall funnel effectiveness, set metrics for different stages of the funnel. An efficient way to track key metrics is using funnel analytics tools like Usermaven. It helps you visualize your funnel and highlights opportunities to fill the gaps.
Read more about product metrics: 20 SaaS Product Metrics to Track for Success
Step 2: Map the ideal buying process
A funnel built upon the ideal buyer’s journey and persona outperform the ones that aren’t. Funnel mapping is where you identify, plan, and create all the funnel stages. You can ask the following questions to brainstorm at this step.
- What does your buyer’s typical journey look like?
- Where do you want to lead your prospect, i.e., the endpoint?
- What are your ideal buyer’s interests and problems?
- How would you turn your prospects into customers throughout this journey?
Visualizing your funnel is important to stay on track. It also informs other decisions related to funnel stages, such as the kind of content you would need to engage your audience and convert them.
Step 3: Identify the important touch points that lead to conversions.
Funnel analysis is a powerful marketing tool to boost conversions. Businesses usually have more than one customer touch point, be it a website, an application, social media, etc. Thus customers coming from different channels won’t have the same user journey. You can use funnel analysis to identify the best-performing user touch points leading to more conversions. You can vamp up your campaigns with this information to attract more conversions.
Some tips for improving your conversion rate: Why Is My Conversion Rate Dropping For No Reason?
Step 4: Understand user behavior
Funnels are all about helping your prospect reach an end goal. An understanding of how they behave and interact with your brand is essential. User behavior analytics help you identify user pain points.
For instance, Usermaven keeps track of your product and website users throughout the customer journey stages. It offers tools specific to various stages of the funnel.
- You can get marketing attribution insights at the acquisition stage.
- Identify and remove blockers during the onboarding steps.
- At the retention stage , it offers retention cohort analysis and tracking of customers slipping away.
Step 5: Identify problems at each funnel stage
The funnel metrics and KPIs you define at the beginning highlight the issues your users are facing at each stage. With the help of Funnel analysis, you can resolve these issues to prevent prospects from dropping out.
Funnel optimization is a continuous process. You can run A/B testing to try what works best. Another technique is to ask for feedback via surveys regarding your product or service from users.
The Usermaven funnel analysis feature lets you visualize key metrics to understand when and where visitors are leaving your website. By resolving these issues, you can reduce the customer churn rate.
Step 6: Get deeper insights by segmenting users and comparing funnels
User Segmentation helps you target users based on where they are in the funnel. It also provides you with deeper insights. You can segment your users based on several factors like demographic and psychographics.
Usermaven lets SaaS companies analyze feature adoption by the audience based on segments. With their pre-built-in report feature, you can extract feature engagement reports based on custom audiences.
In addition to your funnel analysis, you can sharpen your funnel wisdom with competitors’ funnel analysis. Comparing the two can assist in how your practices compare with the industry practices.
Finding loopholes in your funnels that you might miss is an extremely important task. Keeping track of the channels your competitors are using and how they are utilizing conversion techniques like CTAs etc., can surely help you in improving your strategies.
Funnel Analysis Mistakes to Avoid
Despite a robust funnel, you are likely to make funnel analysis mistakes. Keep the following mistakes in mind while implementing funnels and conducting funnel analysis.
Not focusing on high drop-off points
Funnel drop-offs indicate where users are facing problems. Fixing these points is the quickest way to boost your conversions. There can be various drop-off reasons, such as technical issues, missing information, lacking user experience, etc.
A/B testing, user segmentation, complete pricing information, and simple funnel steps can lower drop-off rates.
Ignoring user experience
The customer experience begins from any of the touch points you offer. And amongst these interaction points, your website is your brand’s face. If it is cluttered and unattractive with ineffective copy, your prospects will leave from the top of the funnel.
The first impression of your brand is critical in determining whether a customer will enter your funnel. Here are a few best practices you can implement to enhance your customer’s experience with the landing page
- Make it simple and easy to navigate.
- Use white space to make important parts stand out.
- Highlight and bring to attention any call-to-actions and headings.
- Make your copy engaging and convincing.
- Focus on the benefits more than the features.
Funnel analysis can also be fruitful in personalizing a user experience with your brand. As a result, they are more likely to respond and convert.
Funnels End at the Point of Conversion
You successfully converted a prospect into a customer at the end of the funnel. What next? A common mistake is having no vision of what happens after the funnel ends.
You can ask such customers whether the product was according to their expectations. If the product meets their expectation, they can become loyal customers and promoters of your brand. After the conversion stage, customers enter the advocate stage, where they promote your product with positive word of mouth, complementing your marketing efforts. You can also use their testimonials in your marketing message.
It is a well-known marketing fact that retaining customers is relatively easy than prospecting for new customers. So keep this in mind once your customers reach the conversion stage of the funnel.
All users should follow the same conversion path
A conversion path is your potential customer’s journey from various touch points to the end goal, and not all of your users have to follow the same conversion path.
Conversion paths are tools to determine what’s working and not. A/B testing and user segmentation are two techniques to implement multiple conversion paths. They can help you set up multiple conversions based on customer behavior and intention. Information is also tailored based on the user status and the funnel stage they are at. This approach can tell what’s working well for which user segment.
Improve Your Sales Process With Funnels using Usermaven
Funnel analysis is equally important to acquiring and retaining customers. So, don’t just focus on conversion rates. Look for ways to nurture customer relations and brand loyalty. Try Usermaven to keep your funnels well-oiled for reduced friction and smooth running.
Usermaven helps you maximize customer success with improved insights into user behavior and customer journey. Besides, it complements a business’s marketing labor with robust features. Real-time insights, UTM tracking, and privacy-friendly analytics are some of the major features. It’s flexible and user-friendly, with sustainable pricing to grow your business.