A definitive guide to Funnels

Funnels are foundational-level building blocks of all digital businesses today. If you have been yearning to create one, this one-stop solution guide aims to answer every question that you might have. The covered topics include:

What is a Funnel and How Does it Work

What is a Funnel?

Think about your online business. You obviously want your prospects to visit your website, learn about what you do, check out the pricing details, and then take certain actions. This can either be completing a purchase, opting for a consultation, filling out a form, or even signing up for your newsletters.

This is where a Funnel comes in. It is an analytical method that shows you meaningful data regarding how visitors move through your website. It defines the various stages that they might go through before making a decision, such as a purchase.

But why is it known as a ‘Funnel’? Merely because the graphical representation of the method resembles one. For example, for every 100 people visiting your website, 50 might be interested in buying your service, and 20 might buy it. This top-down approach is wide at the top and narrow at the bottom, giving the concept the functionality of an actual funnel.

By dissecting every stage of the funnel and understanding the motivations that drive customers from one stage to another, you can create the right strategies and influence the outcomes at every step

How Does a Funnel Work?

Funnels consist of multiple stages or steps and show you the drop-offs and conversions at every funnel step. Here is how this works:

Grab the Attention

Being the first stage of the funnel, you begin by making as many prospects as possible aware of the existence of your website. This is represented by the number of users who are visiting your landing page over a given period of time. Strategies to attract them can range from Inbound Marketing, Social Media Marketing, PPC Campaigns, and Public Relations, among others. The central idea is to solve a problem that the buyer is searching.

Hold the Attention and Arouse Desire

This is the stage where you nurture the interest of the prospects to buy the product/service. They learn more about you and start comparing your offerings with other market alternatives.

For your website, the percentage of visitors who check out your services or sign up on your forms is a representation of their interest. This is also the point where you start tracking the conversion rates for each funnel step.

Suppose that 1000 people land up on your website and 670 of them navigate to your services page, this would represent a 67% conversion rate for this particular step.

Build Confidence and Push Decisions

This stage is where the prospect finally decides whether or not to convert. Considering the example above, out of the 670 visitors who check out your services, suppose that 310 of them are interested in availing them and they navigate to the Pricing page. The conversion rate of this funnel step would be (310/670)*100 = 46.27%

A great way to build the confidence of the website visitor is by showcasing the credibility of your brand. This will make them see the value in your products/services in a way that they decide to act on it.

Secure the Desired Action

Once the prospect has the intention to act, they perform the required action in this stage - such as a purchase. The number of website visitors that you end up converting represents the conversion rate of the final funnel step as well as the entire funnel. In the example above, if 310 website visitors check out the pricing page and 150 of them actually go on to buy your services, the conversion rate of the final funnel step would be (150/310)*100 = 48.39% and the conversion rate of the entire funnel would be (150/1000)*100 = 15%.

Optimizing every step of the funnel is how companies increase their conversions and revenues. If you have always wondered how digital companies come from nowhere and take the online world by storm, this is the underlying principle!

The History of Funnels

Here is an interesting fact - the concept of Marketing/Sales Funnels has existed long before computers even came into existence. The theory was first put forward in the year 1898 by an American Advertising Advocate Elias St. Elmo Lewis who was a marketing Guru of the time.

The funnel model eventually went on to be associated with the concept of AIDA - Awareness, Interest, Decision, and Action - in the year 1924 by William W. Townsend in his book Bond Salesmanship.

While the core concept of the funnel has remained the same in the past 100+ years, a few variations have been developed to incorporate the needs of the modern-day digital selling landscape. It is also referred to as the Purchase funnel or Buying funnel today and takes into account a few more stages such as the Repurchase Intent and changes in consumer behavior patterns due to overhauling technologies.

Types of Funnels - Marketing Funnel Vs. Sales Funnel

While the terms ‘Marketing Funnel’ and ‘Sales Funnel’ are often used interchangeably, there is a stark contrast between them.

Marketing Funnel

The Marketing Funnel deals in creating as much interest in the company’s product/service as it is humanly possible. If you have distinct Marketing and Sales departments, the bottom of your Marketing funnel is usually the top of your Sales Funnel. The involved steps in marketing often are:

Sales Funnel

To put it simply, a Sales Funnel is how your prospects go from “Who are you?” to “Yes! I will buy that!” Here are the stages of a typical Sales Funnel:

How to Create a Funnel

The key to creating an exceptional funnel is building it backward. Ask yourself - what do you want your website visitors to do? Do you want them to sign up, order your products, or avail your services? Once you know what the end-game looks like, map the process back to your highest traffic pages.

In the case you have multiple goals or starting points, the ideal scenario is to have a dedicated funnel for each of them. For instance, the Funnels of the Homepage and Landing Page can (and should) be different and tracked separately.

Examples of Website Conversion Funnels

Some typical examples of how website conversion funnels work are:

  • E-commerce
    Homepage > Product Page > Cart > Checkout Page > Order Confirmation Page
  • Blog
    Homepage > Blog Post > Subscribe Box > Success Page
  • Web App
    Homepage > Trial Signup Page > Interface > Upgrade Page > Dashboard

How to Define the Steps of a Funnel

Building a website conversion funnel is not an undemanding, easy task. It takes a lot of deliberation to get it right. You need to carefully scrutinize the path your visitors are taking and the type of content that is working to shape their decisions. Here is how you can define and optimize every step of your funnel to come up with a funnel that converts the most number of visitors:

Map the Ideal Buying Process

To begin creating a funnel for your online business, you need to put yourself in your prospect’s shoes and understand how they move through your website. This information can then be leveraged to map an ideal path.

For instance, the ideal path that you want your visitors to take through the website can look like this:

While this works, your visitors are also likely to follow other paths through the site. The best bet is to build multiple funnels and track all of them for maximum conversions. This will also help you understand how to visualize your funnel for the most optimum conversion scenario.

Define Conversion Goals

Define conversion goals for each step of the funnel and set up a way to track them. You can easily do this by setting up funnels with Freshmarketer and using the resulting analytical data to measure its performance. The usual metrics that are tracked at every step include:

  • Revenue - enrolling and paying for an account
  • Acquisition - creating an account or submitting content
  • Inquiry - Querying through chats and forms or contacting support
  • Engagement - sharing on social media or commenting

And Goals typically fall under categories like

  • Destination - the webpage the user is visiting
  • Duration - the amount of time spent on each page
  • Pages/session - the number of pages visited by the user in one session
  • Event - the final action that the user takes to complete the goal


Leverage the Right Content

Every page of your website, regardless of whether it is a part of your funnel, should be rich in terms of content. That's because content plays a significant role in pushing leads from one funnel step to another. It also helps you unearth new pages that you can include in your funnel for better conversion.

Content is an opportunity for you to showcase your brand in the right light, address the needs of your prospects, and distinguish your company from your competitors. Content curation ideas for each Funnel Stage can look like these:

  • Top of the Funnel (TOFU) - eBlog Posts, Emails and Newsletters, White Papers, Tip Sheet or Checklist, eBooks, Webinars,Podcasts, Slideshows, Infographics, Guides or Tutorials
  • Middle of the Funnel (MOFU) - Customer Testimonials, Expert eBooks, Case Studies, Free Samples, Demos, Product or service-based Whitepapers, FAQ pages, Product or service-based Webinars
  • Bottom of the Funnel (BOFU) - Free Consultation, Pricing Page, Live Demos, Free Trial, Coupons

Identify the Leaks

Whatever funnel stages you define or website pages you include, there are bound to be some holes at each level. Users who are not interested in converting lose out in each funnel stage and the ones who qualify make it to the next level.

You need to identify the elements of web pages that are causing visitors to drop-off. For instance, a long and complicated checkout process can lead to a high cart abandonment rate.



Optimizing every funnel stage for better conversions is how you devise the perfect funnel for your service/product and convert more visitors into paying customers. Heatmaps are a great way to identify funnel leaks. They are a visual representation of data where colors denoted values. Warm colors (red and orange) translate to high values and cool colors (blue and green) demonstrate low values.

Bring in Qualified Leads

One of the best ways to devise a funnel that actually works is by bringing in qualified leads in the first place and regularly analyze the conversion funnel metrics. The larger the net you are using in the awareness stage, the more likely it is that you will end up with non-qualified leads. Sooner or later, this is bound to interfere with the creation and optimization of your website conversion funnel.

Once you have got a working funnel set up, the last step is to overview the channels that are a major source of traffic and determine which of them are in sync with your buyer’s persona.

How to Analyze a Funnel

What is a Funnel?

Conversion funnels are where all the magic happens. Visitors convert into paying customers, fulfilling the purpose of your online business. But this can only be made possible with the help of active Funnel Analysis. It is a method that is used to measure and visualize how visitors are interacting or navigating through your website’s conversion funnel, enabling you to track the conversions and drop-offs at each step or according to specific user behaviors.

How Funnel Analysis Can Help Your Business

Funnel Analysis provides you with a clearer sense of where your website visitors are dropping off and helps you unearth newer opportunities for growth and optimization. Funnel Analysis can help your online business to:

Steps Involved in Funnel Analysis

Making educated guesses about the funnel without adequate data to support it can be a recipe for disaster. Here is how you can set up a reliable Funnel Analysis process and begin driving actionable and dependable insights about website optimization.

Monitor Crucial KPIs for Your Business

Every stage of a funnel can involve numerous metrics working in the background. You need to define which metrics are crucial for the success of your business. Some of the common KPIs that you can keep an eye on are:

While this works, your visitors are also likely to follow other paths through the site. The best bet is to build multiple funnels and track all of them for maximum conversions. This will also help you understand how to visualize your funnel for the most optimum conversion scenario.

Leverage Heatmaps to Understand User Behavior

Funnel visualization tools with integrated heatmaps are a great way to further understand user behavior (especially in real-time) and derive insights about every working element of the web page. Heatmaps are defined as the graphical representation of data in which the individual matrix represents stored values as colors.

Heatmaps show you where the most activity occurs on your website. You can then take these areas into account while optimizing the web pages.

Visualize Your Funnel

Once you have the conversion details about every funnel step, the best way to dive deeper into the analytical framework is to visualize the funnel. This will provide you with a bird’s eye view of the funnel, and you can accordingly analyze it to take scalable decisions regarding optimization.

Funnel Reordering

Visitors might not always navigate linearly through your website. Reordering is an excellent way to analyze funnels for their flexibility and explore every possibility that can improve the conversion journey of the users.

By rearranging the funnel steps, you can get powerful insights about who traveled through the other pages in the funnel along with the percentage drop-offs for each page. Once you have set up the funnel steps, wait for the data to populate to understand if you need to reconsider the steps of your funnel.

Freshmarketer provides you with dedicated reports about the functioning of every funnel step including the capability of rearranging steps without pausing the tracking function.

How to Get Actionable Insights from Your Funnel

Before we jump into the details, it is essential to set some goals for your website. You need to answer questions like:

  • What are the visitors looking for when they land on your website?
  • What types of website conversions are important for you?

Not only will this set up a proper foundation for improvement, but it will also help you deliver a better user experience.
There are three primary ways to derive useful information from Funnel Analytics.

Bottleneck Check

The aim here is to look out for areas in the funnel that register the most amount of drops. But it is important to understand that some steps have a tendency to clock naturally clock a churn rate. For instance, an e-commerce website may have the following funnel: 
Landing Page >> Registration Page >> Product Details >> Cart >> Payment Page >> Order Confirmation Page 

If you notice in the metrics of the landing page that 90% of the visitors go on to register on the platform, but only 10% of them check out the product details, this might indicate a bottleneck in the funnel, such as a complicated placement of the product page. On the other hand, the payments page will always be associated with a significant churn rate since it requires the user to enter/share banking details.

Time Delay Check

Every funnel step involves a certain amount of time delay on the part of the website visitor. This is defined as the time the visitor takes to move from one funnel step to the next. For example, it can be the time taken by a visitor to add a product to the cart from the moment he/she arrives on the product page.

Analyzing the reasons behind this delay can tell you a lot about the quality of your product and the communication strategies being used.

User Segmentation

Segmenting your website users by demography or behavior will help you understand why some user-segments are more successful at specific steps than others. This will answer some important questions for you such as:

Strengths and Limitations of Funnel Analysis

While funnel analysis and optimization remain as key components of all major marketing and sales activities, they also come with their fair share of flaws. Let’s take a look at both the ends of the spectrum:

Benefits of Funnel Analysis

  • Helps you to pick out critical moments in user experiences that are making them drop-off from the funnel.
  • Can pinpoint specific instances of content on the website that are driving the maximum amount of conversions.
  • Enables the creation of web page iterations for A/B testing to determine the best possible flow of traffic through the website by comparing drop-offs and measures of uplifts.
Limitations of Funnel Analysis

Best Practices for Funnel Analysis

Think of your website’s conversion Funnel Analysis as the process of making a delightful sandwich. You need to define specific fundamental steps and time the ingredients perfectly to savor the taste.

The same stands for Funnels. Let’s take a look the best practices that will help you devise and analyze a funnel in a way that aids your digital business with the maximum possible capacity:

Capture the Movement

It goes without saying that website conversion funnels are always in motion. You need to analyze them to understand the direction in which it is headed to make accurate forecasts for the future. You can do this in two ways:

At the same time, capturing the Conversion Rates for every step of the funnel is important to understand how it can be optimized for the most ideal conversion scenario. You can do this by:

Measure Funnel Velocity

Funnel Velocity is the rate of change of a prospect into a lead or a customer (depending on the goal of the funnel). Measuring this metric gives you an account of how fast prospects are moving through the funnel and how productive your funnel actually is. In addition to a bird’s eye view, you should also look at the velocity of each individual stage of the funnel to pinpoint bottlenecks and spot opportunities.

Evaluate Sub Funnels

Marketing and Sales funnels can also consist of certain sub-funnels, which can be defined by slicing the data on the basis of key variables such as volume, conversion rates, velocity, and more. This will help you to identify the changes that can lead to more effective revenue growth.

Some examples of sub funnels include:

Determine Funnel Momentum

Once you have the idea of funnel velocity, movement, conversion rates, and the involved sub-funnels, you will be able to connect the dots and have a better idea of the future. Correctly forecasting the future results of the funnel by analyzing the impact of every possible change made to it should be your next step.

Execute Cross-Funnel Comparisons

Your website can (and should) have multiple versions of the conversion funnel based on the various paths users are taking through the website before converting. To completely understand the areas which can be optimized, you should undertake an active cross-funnel comparison analysis. This will help you understand the variables of the business that you should focus on and the impact they would have on the overall revenues.

How to Optimize your Funnel

Once you have defined your website conversion funnel and the elements that it constitutes, it is now time to optimize it for better conversion rates. Here is how you can start optimizing every component of your funnel and pinpoint the negative spots within your website’s Funnel Analysis:

Funnel Goals

The process of optimization begins as soon as you define the goals of your funnel. Every subsequent and resulting data will then be used to reach these goals by tweaking the website for the most optimum results. A well-defined goal consists of two elements:

Example: “User Subscriptions” and “Whitepaper Downloads” can be two distinct goals of two individual funnel steps.

Additionally, the Lifetime Value of a customer who ends up subscribing can be $100, 50% more than his/her acquisition cost. Thus, the Goal Value of the goal “User Subscriptions” can be defined as $100.

Landing Page Elements

One of the very first steps of funnel optimization involves refining the landing pages. Here are the elements that you should test:

Example: All possible combinations of Headlines A, B, C and Images A, B, C can be tested to determine the impact of each duo on the overall conversion rate of the funnel step. The best performing combination can then be used.

User Behavior

How are users interacting with every element on every page in your web pages? This can only be optimally answered with features such as dynamic heatmaps (included in FreshMarketer) which make it possible to track every click and scroll in real-time along with engagement counts with elements like sliders, drop-downs, and images. Details that heatmaps provide you with and can be used to optimize your funnel include:

Usability Testing

Nothing can test the usability of your webpages better than receiving direct feedback from website visitors in real-time. You can start by focusing on pages that contribute the most towards conversions and eventually move to capture the complete funnel. This can be done with the help of real-time polls with an aim to come up with design alternatives for every web page in the funnel.

Example: You might have an ecommerce website where real-time polls have been set up to capture feedback. An abundant amount of users report the UX experience to be unsatisfactory. The analysis suggests that the color of the ‘Buy Now’ button blends with the background, making it hard for users to find it immediately. Fixing this immediately improves the conversion rates by 12%

What to Look for in a Good Funnel Analytics Tool

The right Funnel creation and Analytics tool can help you discover possibilities that you never even thought existed. But how can you find one? Simply look out for these features:


As mentioned before, heatmaps are an absolute must if you want to truly tap into the minds of your visitors. Not only will you understand what is working, but you will also realize what your visitors are expecting.


Whether is it a click, scroll, conversion, or drop-off, the ideal tool should be able to track it all. This calls for the tool to be a one-stop solution for conversion optimization.

Visual Editor

Optimization is a lot about making changes to websites and a Visual Web Page Editor can streamline this process by saving you a lot of time and taking away the need for technical expertise.

Custom Targeting

You should also be able to track the behavior of specific users and target them for better conversions. Targeting factors can range from geolocation and language to page visits and device types.


A Funnel Analysis tool can be rendered obsolete if it cannot be integrated with the present tools that you are already using, including CMS and other analytics tools. The end goal is to sync all the visitor data in one place and leverage technological capabilities in a collective manner.

Freshmarketer is an all-in-one conversion optimization suite that provides you with all these features, among others. It enables you to create funnels and analyze your web pages with highly robust conversion optimization techniques.

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