What is the Conversion Funnel?

A conversion funnel is a set of stations that a user should go through until the conversion, i.e. until a purchase, the booking of a service, etc. The term “funnel” refers to the fact that with every step towards conversion, the number of users decreases because there are numerous exits on the way. The narrow funnel opening shows all “remaining” users who have become buyers at this point.

The conversion funnel is an important element of website optimization since the optimization success is determined on the basis of increasing conversions.

Stations in the conversion funnel

The conversion funnel can be divided into different phases . The type and number depends on many factors, including:

  • the page structure
  • the product/service
  • of what counts as a conversion
  • the steps involved in converting,

For example, the phases can look like this:

  1. Phase: Users access a product page via organic search.
  2. Phase: Users click on another page for further information.
  3. Phase: Users click on the “Buy” call to action.
  4. Phase: shopping cart/execution of the order
  5. Phase: completion of the purchase

In the course of these phases, the number of users continues to decrease, as people “get out” in each step. This is a natural process and doesn’t have to be a bad sign for the website. Perhaps the user is simply not yet sure whether he really wants to buy the product, perhaps the user first wanted to find out the price and will only buy in the future, perhaps the user does not have time to finish the purchase, etc. The options The exit before the desired conversion is so diverse that you can never turn all visitors into buyers.

It is therefore important to take a close look at the individual steps, also known as micro-conversions when analyzing the conversion funnel and to analyze them more closely. What is striking, for example, is a particularly high number of jumps at a particular conversion funnel step.

An Example of Conversion Funnel’s Definition

The buyer’s path to purchase

Let’s say an internet user reaches a landing page that advertises a computer game. In order for our internet user to buy the computer game, he has to click on a button (Call to Action – Element). He then comes to an online form in which he enters data such as his name, surname, delivery quantity, payment method, and delivery address. With a click on another button, he comes to another page, on which his details are displayed again for checking. Now he clicks (again!) On a button and completes his order. Only then does he really become a buyer and increase the conversion rate. But what does that have to do with a funnel?
A funnel is the summary of all touchpoints of a user along an intended use up to the offer and its use

Conversion Funnel Analysis Example

As an example, 1,000 people reach the landing page each day. 300 of them click on the Call to Action element. 250 fill out the online form completely and click on the second button. When looking at the control page, another twenty of the 250 people jump off, so that a total of 230 people complete the purchase. Here we have the funnel: 1000 come in, 230 finally out. As a rule, some people jump off every single step. For a marketer this means:

He should (mostly) reduce the number of steps he takes to the potential buyer of his products to the lowest possible number.
At the same time, a look at the funnel offers the opportunity to analyze which steps lead to particularly high bounce rates: Maybe a lot of potential buyers jump off the online form? Then something must go wrong here. Many visitors to the landing page do not click on the “Call to Action” element? Something is probably wrong with the landing page.
The conversion rate can be calculated by looking at the number of website visitors and the number of buyers alone. You can only find out where it can be effectively optimized if you look more closely at the funnel. This is made possible by various programs.

Conversion Funnel Types and Softwares

Not all funnels are the same
The conversion funnel that we described above is a linear sequence of pages. But it does not have to be inevitable. For example, a link to a second page with detailed information about the product and a button that leads from there to the order form would be possible on the landing page. Then there would already be two possible funnels:

Landing page => order form => control page => order
Landing page => product detail page => order form => control page => order

If an A / B test is currently running with two versions of a landing page, landing page A or B is the topmost area of ​​the conversion funnel. Good software with which a conversion funnel is analyzed can provide analyzes for all of the above-mentioned cases and also go into much more detail. With an online form, for example, it also shows a user which input field has the highest bounce rate. Perhaps the users find it difficult to cope with a certain input field or do not want to give the information requested there? Good software for the conversion funnel analysis gives you an indication of this. (And good testing tools even show the effect of the test variants on the behavior of the visitors in the funnel!)

It thus becomes an instrument that makes very precise specifications for effective A / B tests. If the bounce rate for a certain input field is very high, you should test variants in this field and see how they bounce and conversion rates develop. Note: If you want to optimize, you have to go into the funnel. Deep inside!

Check conversion funnel with web analytics tools

The term “funnel” does not really apply, because with a funnel everything that is “thrown in” at the top also passes through the narrower lower opening. The conversion funnel is actually a funnel with numerous holes because the users who decrease with each phase do not simply disappear. You just leave the path you want and go in a different direction instead.

Web analysis tools like Google Analytics or etracker not only offer a good graphical representation, but also make it possible to understand these directions and paths. You can also see where the visitor went after the funnel exit. The prerequisite is, of course, that you first define the individual steps of the funnel and the conversion goal . You can set up a separate funnel for each goal.

As an example, a brief explanation of the conversion funnel in Google Analytics:

The size of the funnel, of course, depends on what you want to analyze within the path to conversion. The goal is to define the funnel as precisely as possible. The better you can find out where it “sticks”, ie where potential buyers get lost.

Possibilities for conversion funnel optimization

The conversion rate gives a percentage of how high the proportion of buying visitors is, but alone does not provide any starting points for a more detailed analysis or for defining optimization measures. This is only possible by looking at the conversion funnel. Because here you can see exactly where the users jump off and countersteer accordingly.

Optimization measures for the conversion funnel can look like this, for example:

Reduce the number of steps to convert – the fewer clicks the user needs to sign a contract, the better
start with steps with a particularly high bounce rate – may be something in the online form does not work as the user imagines, maybe the call-to-action button is not placed prominently enough, maybe the call-to-action is not clear enough, etc.
Lead potential customers directly from the ad or from the landing page directly and without detours to the product
Simplify order forms – keep them as short and clear as possible, clearly mark mandatory fields, etc.

Why is understanding the conversion funnel important for businesses?

Comprehending the conversion funnel holds significant importance for firms due to many factors. It offers a systematic framework for comprehending client behaviour and the processes involved in decision-making. Through the process of dissecting the progression from first awareness to eventual conversion, enterprises have the ability to discern any obstacles or areas of resistance that could potentially dissuade prospective clients. It facilitates the implementation of focused marketing initiatives. Understanding the sequential occurrences inside each stage of the funnel facilitates the optimization of advertising budgets, enabling the strategic allocation of resources to areas that yield the highest level of influence. Gaining an understanding of the conversion funnel is crucial to optimizing the user experience. By comprehending the manner in which individuals engage with a website or application, adjustments can be implemented to enhance the efficiency of the conversion process. The data obtained through the analysis of each stage of the funnel can be used as actionable intelligence. Organizations have the ability to utilize this data in order to enhance marketing strategies, optimize product offerings, and connect more effectively with the requirements and aspirations of their customers. Understanding the conversion funnel can also contribute to the maintenance of consumer loyalty. The development of strategies for fostering recurring business can be facilitated with an examination of the mechanisms and rationales underlying conversions. In conclusion, a comprehensive comprehension of the conversion funnel provides organizations with the necessary resources to effectively attract, engage, and convert potential customers, ultimately optimizing return on investment (ROI) and cultivating sustained prosperity.

What stages are commonly found in a conversion funnel?


Commonly, a conversion funnel consists of four main stages: Awareness, Consideration, Decision, and Action.

  • Awareness Stage: Potential customers become aware of a brand, service, or product through various channels like advertising, social media, or word-of-mouth.
  • Consideration Stage: Interested individuals engage in research and evaluation, often comparing different options and reading reviews.
  • Decision Stage: Final evaluations occur, with potential customers becoming increasingly ready to make a purchase. Offers, testimonials, and demonstrations may be particularly influential here.
  • Action Stage: The actual purchase or conversion takes place. Customers complete the desired action, such as signing up for a newsletter or making a purchase.

How can conversion rates be improved at each stage of the funnel?

Improving conversion rates at each stage of the funnel involves distinct strategies tailored to the challenges and opportunities presented by each phase.

Awareness Stage

  • Increase brand visibility through targeted advertising and SEO efforts.
  • Use social media platforms to engage a broader audience.
  • High-quality content can attract attention and initiate customer journeys.

Consideration Stage

  • Provide valuable, in-depth content like how-to guides, webinars, or tutorials that can help potential customers in their research phase.
  • Employ retargeting techniques to re-engage visitors who have interacted with the website but not yet converted.
  • Utilize email marketing to nurture leads with relevant information and offers.

Decision Stage

  • Introduce special offers, discounts, or bonuses that make the offer more compelling.
  • Showcase customer testimonials, case studies, or expert endorsements to build trust.
  • Use chatbots or live chat support to answer last-minute questions and remove any barriers to conversion.

Action Stage

  • Optimize the checkout process to minimize steps and remove friction points like complicated forms or unexpected costs.
  • Implement A/B testing to refine the user interface and experience continually.
  • Provide multiple payment options to accommodate various customer preferences.

Optional Additional Stages:

Post-Purchase Stage
  • Follow up with thank-you emails and offer opportunities for product reviews or feedback.
  • Offer support resources like FAQs or customer service contact information.
  • Suggest related products or services to encourage additional purchases.
Loyalty Stage
  • Implement a rewards program to incentivize repeat purchases.
  • Keep customers engaged through regular communication, such as newsletters featuring exclusive offers or valuable content.
Advocacy Stage
  • Encourage satisfied customers to refer others or leave online reviews.
  • Feature user-generated content in marketing materials to build social proof.

By addressing the unique needs and challenges of each stage, conversion rates across the entire funnel can be improved.

What are key performance indicators (KPIs) for monitoring a conversion funnel?

Key performance indicators for monitoring a conversion funnel often include the following metrics:

  • Entry Sources: Tracks the origin of incoming traffic, whether from social media, search engines, or direct links.
  • Landing Page Views: Counts the number of unique visits to the initial webpage in the funnel.
  • Bounce Rate: Measures the percentage of visitors who leave after viewing only one page. A high bounce rate may signal an ineffective landing page.
  • Time Spent on Page: Records the average duration visitors stay on a specific page. Longer durations can indicate either engagement or confusion.
  • Click-through Rate (CTR): Calculates the proportion of clicks on a particular link relative to the total number of page, email, or ad views.
  • Exit Pages: Identifies the webpages with the highest dropout rates within the funnel, aiding in targeted optimization.
  • Conversion Rate: Represents the percentage of successful conversions relative to the total number of visitors, serving as a critical metric.
  • Cost per Conversion: Computes the average cost incurred per conversion, usually in relation to advertising expenses.
  • Customer Lifetime Value (CLV): Estimates the total value a customer contributes throughout the duration of the relationship.
  • Abandonment Rate: Determines the percentage of individuals who begin but do not complete a process, such as abandoning a shopping cart.
  • Lead-to-Customer Ratio: Important for businesses with longer sales cycles, this ratio measures how many leads transition into actual customers.
  • Revenue per Visitor: Calculates the average revenue generated for each visitor, providing insight into the funnel’s effectiveness.
  • Funnel Throughput: Evaluates the proportion of entries to exits at various stages of the funnel to identify potential bottlenecks.
  • A/B Test Results: Collects data from comparative tests of different funnel elements to determine which versions yield better conversion rates.
  • Customer Feedback and Satisfaction Scores: Gathers qualitative data that can elucidate the reasons behind a funnel’s performance.
  • Multi-channel Attribution: Analyzes how different channels contribute to conversions, aiding in the optimization of each.
  • Page Load Time: Monitors the speed at which pages load, as slow times can deter progression through the funnel.

Monitoring these KPIs enables strategic adjustments for enhancing each funnel stage, thereby improving conversion rates and overall performance.

What tools are commonly used for tracking conversion funnels?

Tools commonly employed for tracking conversion funnels include:

  • Google Analytics offers an array of powerful analytics features, including insightful funnel visualization and comprehensive analysis of user behavior.
  • Mixpanel is a company that specializes in the analysis of user behavior across websites and mobile applications. They provide insightful funnel analysis features that can help businesses understand their customers’ actions better.
  • Adobe Analytics: Provides comprehensive analytics and segmentation capabilities, often used in enterprise settings.
  • Kissmetrics: Focuses on customer behavior and segmentation, providing a platform for detailed funnel analysis.
  • Hotjar: Offers heatmaps and user session recordings to understand how users interact with webpages, contributing to funnel analysis.

How do different marketing channels impact the conversion funnel?

Different marketing channels have varying impacts on the conversion funnel, each influencing the stages of customer engagement and conversion differently.

  • Organic search: Often contributes to the top of the funnel by driving initial awareness. High-ranking organic search results can bring in qualified traffic interested in products or services, setting the stage for further nurturing.
  • Paid search: Similar to organic search, paid search is a targeted method that can attract customers searching for specific products or solutions, potentially accelerating the sales funnel.
  • Social Media: Effective for both brand awareness and engagement. Platforms like Facebook and Instagram can be used for targeted advertising that can capture interest and drive traffic to various funnel stages.
  • Email Marketing: Extremely versatile and can influence multiple stages of the funnel. From initial lead capture to nurturing and post-sale engagement, email marketing can be tailored to guide prospects through the conversion journey.
  • Content Marketing: Blogs, whitepapers, and webinars serve to educate and engage potential customers. High-value content can drive top-funnel engagement and nurture leads through to conversion.

What is micro-conversion and how does it relate to the overall conversion funnel?

Comprehending the conversion funnel holds significant importance for firms due to many factors. Firstly, it offers a systematic framework for comprehending client behavior and the processes involved in decision-making. Through the process of dissecting the progression from first awareness to eventual conversion, enterprises have the ability to discern any obstacles or areas of resistance that could potentially dissuade prospective clients.

It facilitates the implementation of focused marketing initiatives. Understanding the sequential occurrences inside each stage of the funnel facilitates the optimization of advertising budgets, enabling the strategic allocation of resources to areas that yield the highest level of influence.

Gaining an understanding of the conversion funnel is crucial to optimizing the user experience. By comprehending the manner in which individuals engage with a website or application, adjustments can be implemented to enhance the efficiency of the conversion process.

The data obtained through the analysis of each stage of the funnel can be used as actionable intelligence. Organizations have the ability to utilize this data in order to enhance marketing strategies, optimize product offerings, and connect more effectively with the requirements and aspirations of their customers.

Understanding the conversion funnel can also contribute to the maintenance of consumer loyalty. The development of strategies for fostering recurring business can be facilitated with an examination of the mechanisms and rationales underlying conversions.

In conclusion, a comprehensive comprehension of the conversion funnel provides organizations with the necessary resources to effectively attract, engage, and convert potential customers, ultimately optimizing return on investment (ROI) and cultivating sustained prosperity.

How does user experience affect the conversion funnel?

User experience (UX) is a critical component of the conversion funnel. UX directly affects engagement, navigation ease, and ultimately conversion rates. A positive user experience can have a significant impact on reducing bounce rates, increasing time spent on site and elevating the likelihood of completing desired actions. Conversely, poor user experiences, such as slow load times or confusing interfaces, can deter users from using your product or service and result in decreased conversions.

It is essential to optimize user experiences within the conversion funnel to ensure that customers are able to complete their desired action with the minimum effort required from them; this will increase customer satisfaction as well as drive higher conversion rates for businesses. Optimizing UX requires an understanding of what drives customers’ behavior when interacting with digital products/services; this includes factors such as page loading speed, layout design clarity, etc., which should be tailored according to customer needs while ensuring they remain consistent throughout all pages in order for users not to get confused during their journey through your website, applications, etc.

Finally, it’s important that companies pay attention to optimizing their User Experience across different channels, including mobile devices, since more people are now accessing websites via mobile phones than ever before, thus making it even more important for companies to invest in optimizing their UX so they don’t miss out on any potential opportunities due to low-quality interactions between consumers and the digital products and services offered by them. By leveraging data-driven insights about how customers interact with online offerings , businesses can make better decisions regarding how best improve upon existing experiences, leading greater success down entire sales pipeline and resulting in increased ROI

Can A/B testing improve the effectiveness of a conversion funnel?

Yes, A/B testing can significantly improve the effectiveness of a conversion funnel. By comparing two different versions of a webpage or element, insights are gained into what drives user engagement and conversions. A/B testing is an invaluable tool for digital marketers who want to optimize their websites for maximum performance and profitability.

A/B testing involves creating two variations (elements) on a page—A” and “B—then showing them to different users in order to determine which version performs better in terms of desired outcomes such as clicks, sign-ups, or purchases. This allows website owners to identify weaknesses within their pages that may be preventing visitors from converting into customers or leads; they can then make changes accordingly based on the data gathered from the tests.
By using A/B tests regularly with your webpages, you can ensure that each stage within your conversion funnel is optimized correctly by fine tuning elements such as call-to-action buttons, headlines, images, etc., giving you more control over how efficiently people move through it towards completion and leading to higher conversion rates overall.

Finally, it should be noted that while effective use of A/B Testing does take some time initially, learning how to best utilize this powerful tool will pay off greatly when used correctly as part of its wider marketing strategy, allowing businesses to gain greater insight into customer behavior while also improving both the user experience and increased revenue potential.

Koray Tuğberk GÜBÜR

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UX

What is the Conversion Funnel?

by Koray Tuğberk GÜBÜR time to read: 14 min
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