01/19/2022 | Press release | Distributed by Public on 01/19/2022 11:01
Not all prospects will become customers, and not all customers will immediately find the value of your product. Funnel analysis can help you pinpoint key events along the customer journey so you can conduct tests, improve the user experience, and increase conversions.
Funnel analysis is a method used to analyze the sequence of events leading up to a point of conversion. Events within the funnel take place inside products, mobile apps, websites, emails, or other digital touchpoints. Funnel analysis lets product and marketing managers understand user behaviors and the obstacles encountered throughout the customer journey.
As users travel this digital path, they will probably encounter experiences that prevent them from reaching the desired outcome. You can improve the points of friction to encourage users to travel further down the funnel by zooming in on each step.
According to TechCrunch, "From leads all the way through to engagement, conversion and retention, understanding each step and making even small optimizations at any stage will have down-funnel implications."
As an example, let's say you're trying to convert free trial prospects into paid subscribers. Your funnel might look like this:
Many distractions or barriers can happen in between each of these steps, and there are likely patterns of behavior that can tip you off to what's working and what's not. Perhaps prospects are dropping off at step 3 because of a multi-device activation required to create an account?
Maybe you discover that if you can usher prospects past step 3, you have a stronger chance of conversion. Without funnel analysis, you'll miss these opportunities to delight customers and drive business outcomes.
At its core, funnel analysis is important because it allows you to monitor user actions and behaviors. This is critical because those behaviors reveal the intention and motivation of your customers.
Funnels are not just used in sales or marketing to create prospects, they are also important for customer retention. Once you know what your customers want, you can inject that value into each step of the customer journey.
Although every business has unique goals, funnel analysis can be used to:
Funnel analytics presents many different ways to extract insights from the data you collect. How you interpret funnel data and leverage it to achieve goals is native to your business and industry.
Oftentimes, problems in your funnel need to be approached from a unique angle or perspective. Funnel analytics provides a launchpad to start asking the right questions. Once you're familiar with basic analysis methods, you can find innovative ways to overcome challenges.
Analytics platforms are nearly indispensable for businesses that offer digital products and services. Without the right tech stack, it becomes extremely challenging to measure and improve things like conversion.
There are many options available when it comes to choosing a funnel analysis tool. The best tool for you is dependent on your product, industry, and current tech stack.
When it comes to website funnel analysis, Google Analytics is one of the most popular tools for the job. Marketing teams find it extremely useful because it can tell you how prospects discover and interact with your website. Google Analytics offers a multi-funnel feature that tracks website events, like downloading a whitepaper or filling out a form. It also tells you conversion rates for separate channels, so you can target the right ones, such as organic search, social, or email.
In contrast to other platforms, Google Analytics is somewhat limited and difficult to orchestrate. The primary challenge with Google's funnel analysis is that you can only track steps through page URLs. Also, you can only track users through page views and sessions.
Adobe's funnel analysis product is one of the more complex options, but once you become proficient, there's a lot of functionality available. Inside Adobe you can conduct several funnel reports that measure purchase conversions, cart conversions, and campaign conversions. You can also customize or segment your funnel analysis based on key metrics such as bounces, page views, cart removals, click-throughs, and more.
Adobe Analytics also offers integrations with a number of other products including Google Sheets and Tableau.
Amplitude's Digital Optimization System offers a unified suite of products that gives you an in-depth understanding of how customers experience all of your digital touchpoints. Amplitude's funnel analysis product is built for websites and products, giving a more holistic perspective on data.
Any event or user behavior can be measured and tracked, not just page views or sessions. When conducting funnel analysis in Amplitude, you can order the events of your funnel, segment behavioral cohorts, and set specific conversion windows.
To meet the needs of companies across every industry, Amplitude's funnel analysis chart is flexible and customizable, making it an ideal option for multiple teams or stakeholders. Easily leave notes for teammates or quickly share a link to a funnel view.
Many companies are taking advantage of funnel analysis because understanding the customer journey is critical to building successful products. The power of funnel analysis comes from its utility-although it's only one tool, it can be used to solve a host of various challenges. Below are two funnel analysis examples, so you can have a better idea of what's possible.
Patreon provides creators, artists, and entrepreneurs with the opportunity to earn a living through donations. Users can "pledge" donations to creators on Patreon's platform, and when creators win, Patreon wins. Patreon faced a conversion challenge-they needed to find new ways to incentivize monthly subscriptions to creator content.
Patreon discovered an opportunity to improve the pledge flow funnel through Amplitude's funnel analysis chart. Patreon tested a new feature called "blurred posts" to encourage more users to click through the pledge flow. These blurred posts concealed a portion of creator content, enticing users to delve deeper into the pledge flow funnel and ultimately subscribe. The result? Patreon was able to double pledge conversions on creator pages.
Mindbody is a digital application that connects customers with fitness experts. Users can book classes, track fitness progress, and find local deals. Using Amplitude's funnel analysis tool, Mindbody tested a new app feature, the "Activity Dashboard," to find out how it would influence the conversion rate of booked classes.
Mindbody created behavioral cohorts-groups of users categorized by behavior-to conduct their analysis. Cohorts were segmented into two groups: those who interacted with the Activity Dashboard and those who did not.
After comparing the two groups in the funnel analysis chart, they noticed a huge lift in conversions. The group that used the Activity Dashboard booked 24% more classes per week. Based on this success, Mindbody placed the new feature in the navigation bar to make it more noticeable.
In freemium marketing, product analytics are the difference between conversion and confusion (Feb. 2021) TechCrunch
Don't Throw Your Customers-And Your Business-Down The Funnel (May 2021) Forbes
Optimize Your Marketing Funnel With These Three Questions (Sep. 2020) Forbes
Designing Customer Journeys for the Post-Pandemic World (May 2021) Harvard Business Review