Conversion Funnel Analysis

Conversion funnel analysis involves determining your conversion goal, mapping out the conversion journey, tracking the relevant metrics, identifying key drop-off points, analyzing user behavior with analytics tools, testing and adjusting your strategy as needed, and continuously monitoring your progress.

1. Determine Your Conversion Goal

Determining your conversion goal is always the first step in conversion funnel analysis. 

Without a goal, you cannot measure your success.

• For example, on an eCommerce site, the conversion action takes the form of a sale.

• For content-focused websites, conversion actions take the form of content subscriptions or email signups. 

• SaaS businesses identify conversions as user signups and downloads. 

Once you have identified your goal, identify the various stages required to complete it, and lay out the entire process in detail.

This will help you understand which metrics need to be tracked and monitored in order to assess results.

At this stage, you should also be determining what your ideal conversion rate is. 

A “good” conversion rate can range between 2-5%, so do your research and set your ideal conversion rate target. 

2. Lay Out the Conversion Journey

Once you have determined your goal, lay out the entire conversion journey for users. This should include every step of the process, from entry to completion.

The average conversion funnel is made up of four main stages:

• Awareness

• Interest

• Desire

• Action

With these stages in mind, map out the steps that the average user will take to interact with your site and arrive at the conversion stage.

Outlining steps in this manner helps you in identifying key points in your strategy to concentrate on.

3. Track the Relevant Metrics

Once you have determined your goal and mapped out the conversion journey, it's time to track the relevant metrics associated with each step in order to assess user behavior.

These are some of the most important metrics to focus on:

• Retention rate: This metric measures the percentage of customers that you retain after they perform the conversion action.

• Customer lifetime value: This is the total amount of money that you make from each customer over their lifetime. Tracking your CLV helps you determine whether you should focus your efforts on customer retention or customer acquisition.

• Click conversion rate: This metric measures the percentage of clicks that result in a conversion.

• Conversion rate: This measures the total number of conversions (actions taken towards the goal). A high conversion rate is always a good thing for your marketing, as this indicates that users are making purchases and engaging with your website.

4. Identify Key Drop-Off Points

Key drop-off points refer to the stages in the conversion journey where users are most likely to abandon the process and not complete the conversion.

Identify these points and take note of any potential weak spots in your conversion funnel, enabling you to implement the necessary changes for improvement.

For example, a significant drop-off point in eCommerce websites takes the form of cart abandonment, where a user does not complete the checkout process.

If the cart abandonment rate is too high, then there is a problem with the checkout process that is hindering sales. 

The average cart abandonment rate sits at about less than 70%, so anything above that is cause for concern. 

Once the changes have been implemented, keep a consistent track of these points over time to identify areas for further improvement.

5. Use Analytics Tools to Analyze User Behavior

Analytics tools are the key to understanding user behavior and optimizing conversion funnels.

They help you track the metrics mentioned above as well as other relevant data, including:

• Page visits

• Time spent on site

• Bounce rates

Heatmaps and screen recordings are also useful tools for understanding how users interact with your website and identifying patterns that can help you improve the user experience.

Using these tools can drastically improve your conversion rates, as you can quickly identify what works and what doesn't.

6. Test and Adjust as Needed

No matter what strategy you implement or change, you should always take the time to test it.

A/B testing is a great way to determine the best approach for your website.

• Using A/B testing, you can test two variations of the same page and see which one performs better. 

• This helps you quickly identify what works and what needs to be adjusted in order to optimize your site for maximum conversions.

Testing also allows you to gain insight into user behavior and identify areas that need improvement.

7. Continue Monitoring Your Progress

Once you have implemented the changes and tested them, it's important to continue monitoring your progress.

• Reevaluate your goals on a regular basis and track key metrics to quickly identify any issues with the conversion funnel.

• Make sure to also review customer feedback, as this can provide valuable insight into how users are responding to your website.

Using the data you collect, make the necessary adjustments to keep your conversion funnels optimized and effective.

Wrapping Up: Conversion Funnel Analysis

Here are the seven steps to performing conversion funnel analysis:

• Determine your conversion goal

• Lay out the conversion journey

• Track the relevant metrics

• Identify key drop-off points

• Use analytics tools to analyze user behavior

• Test and adjust as needed

• Continue monitoring your progress

By following these seven steps, you can ensure that your conversion funnels are optimized for success.