Growing your Business: How to conduct a Funnel Analysis

People visit your website every day. Only a tiny percentage of the traffic will convert, taking the action that you desire. That conversion point could be a subscriber clicking on a link, joining your newsletter, purchasing a product, buying an upsell, or something else entirely.

A small boost in your conversion rate will generally help increase profits. Naturally, you want to do everything you can as a company to maximize your conversion rate. Here's where funnel analysis can help you. 

Funnel analysis allows you to figure out where people are leaving so you can make adjustments and boost conversions. I'll show you how to conduct a funnel analysis in this article. But first, you might be wondering, what exactly is funnel analysis?

What is Funnel Analysis?

Funnels help you visualize the various stages of the consumer journey. Funnel analysis involves visualizing and mapping users' actions. Through funnel analysis, you track how people reach each point of the funnel and where people leave your funnel. 

Source: Looker

Effective funnel analysis requires a coherent analysis of the data you have available. Sources of data for analysis are many and varied. Common sources of data include Google Analytics, heatmaps, and user recordings.

Combining these data sources will help you better understand what people do on your website or within your funnel and hypothesize the problem.

Once you have a hypothesis, you can go through your idea using conversion rate optimization strategies. That often involves A/B or multivariate testing. You can gradually improve conversions across your funnel through effective monitoring and constant tweaks.

The type of funnel you are reviewing will impact your deliverables.
Below are some of the actions you will take when completing a funnel analysis: 

Funnel analysis will help you improve the returns of your sales and marketing efforts. Through funnel analysis, you can identify issues with your business and take corrective action that will ultimately help your business grow.

Now that you know the importance of funnel analysis let's look at how you can conduct one. 

Steps to determine Why Potential Customers are leaving your Funnel

Let's follow the steps: 

Map the Ideal Buying Process

The starting point of your funnel analysis should be mapping the funnel.

To determine where you can improve, you need to map out all the steps and variables you will be monitoring. How would you want consumers to go through the research and decision phases before finally reaching that conversion point?

Or, how does your sales team find prospects through email prospecting and then develop those leads?

Customer journey maps help you define the goals for the campaign. They can also provide valuable insights to help you understand prospects and customers behave and interact with your brand (more on this later). 

Monitor KPIs

Once you've determined your ideal buying journey, start monitoring your key performance indicators or your metrics of success. But let's back up a bit. How do you select your KPIs?

The following are some common KPIs to monitor:

These are very few sales funnel indicators you should keep an eye on. However, there are plenty of trackable KPIs, KBIs, and KFIs for business success, and it’s up to you to decide which ones work best for you.

Tracking your funnel KPIs is essential for assessing the overall health of the pipeline and solving any problems that arise. Once you've determined those KPIs that are critical to your business' success, check if you're hitting those targets or not.  

Understand User Behavior

User behavior analytics allows you to monitor how users engage with your brand. You want to understand user experiences and identify pain points.

To better understand user behavior, collect as much relevant data as possible. Data provided from tools like Google Analytics, for example, can provide you with valuable insights into developing your website based on what visitors do on your site.

Equally, heatmap software is great for showing you how people interact with different elements of your page.

You can combine information like this alongside data points gathered through your CRM. For example, you can see when people opened your email and clicked through to your site.

Try to collect relevant data as much as possible from suitable data points. The more insights you can gain, the more likely you are to identify problems and develop suitable solutions that reduce leaks in your marketing funnel.

Identify Problems at each Funnel Stage

By combining the insights you gained from monitoring your KPI at each stage of your funnel with relevant data, you can identify problems at each stage of the funnel. List all of the problems you identify, and then assign them a value.

You can use something like the Action Priority Matrix to rank the tasks you need to complete.

Source: Expert Program Management

Ranking tasks according to importance will provide you with a “to do” list. That list is the outcome of your funnel analysis.

You can then review the leaks in your funnel, identify the problem, and fix the issue.

You can use various tools to help you identify issues. For example, if you see a high drop-off in your funnel on a page that has a submission form, you could analyze the submission form. A micro-funnel analysis of the form could help you identify the issue.

Source: CXL

The Funnel Visualization Report on Google Analytics is a great resource for this type of analysis. You can read more about how to do a micro funnel analysis in this article.

By analyzing and reviewing the major drop-off points across your funnel, you should see an improvement in your overall conversion rate. Remember, this is an iterative process. Make changes, review the results, and then take the appropriate action as needed.

Use Funnel Comparison

One additional step you can take when conducting a funnel analysis is to compare your funnel to that of a competitor. A funnel comparison can provide you with insights into how competitors or people utilizing a similar funnel to yourself are trying to generate conversions.

A funnel comparison can provide you with plenty of valuable insights. However, you are unlikely to acquire relevant data about the conversion rate at each stage of the funnel.

Final Thoughts

The easiest way to escalate your business is to increase conversion rates across your existing marketing funnels. This article provided you with a framework for increasing your conversion rate through effective funnel analysis.

You should undertake periodic reviews of your marketing funnels. Map the ideal buying process, monitor KPIs, and understand user behavior.

That way, you'll be in a better position to identify problems at each funnel stage. Don't forget to compare funnels either for a more in-depth analysis and generate more leads. 

Also contact us to learn more about Funnel Analysis.

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