Improving Conversions through Funnel Analysis
I’m sure you are currently using a funnel to manage the entire sales process.
But are you analyzing this funnel carefully enough?
Taking advantage of funnel analysis is essential because it allows you to identify key events throughout the customer journey. In doing so, you can find out the top reasons for churn and know what kind of content your audience likes to consume, allowing you to optimize your website and increase your customer acquisition and conversion rates.
In this post, I will talk about funnel analysis, how you should conduct it, and how it can benefit you. This way, you’ll understand why funnel analysis is the cornerstone of understanding campaign performance and product health. Once you’re done reading this article, you’ll be more aware of the intricacies of a good funnel and find success in your customer lifecycle and conversions.
What is funnel analysis, and how is it used?
Let’s start with what funnel analysis is. Funnel analysis analyzes the entire process up to the conversion point you specify, which is usually the point at which a purchase is made. It tracks user actions at all conversion points along the funnel—mobile apps, websites, and emails. Thus, it allows you to monitor users’ success at each step, highlighting the problems and points for improvement.
As your prospects travel along your funnel, they will likely encounter an experience that prevents them from reaching your goal. Leveraging funnel analysis can reduce pain points and encourage your users to move forward. Even a small optimization you make at any stage will have significant results in the later stages of your funnel.
It will be more understandable to summarize this whole process through an example. Let’s say your funnel looks like this:
- Step 1: Your prospect stumbles upon a blog post and signs up for your email newsletter.
- Step 2: They open a few emails and discover your free trial offer.
- Step 3: They click a CTA button to start a free trial.
- Step 4: When the free trial expires, they make a purchase.
Say, your prospects might be dropping off step 3 because your email marketing strategies aren’t effective enough. In such a case, you can pave the way for more prospects to turn into customers by focusing on improving the 3rd step.
Also, you need to be able to identify changes to user behavior as and when they occur. Funnel analysis lets you spot if something goes wrong and take immediate action, so you can keep converting prospects.
What are the benefits of funnel analysis?
Funnel analytics is important because it allows you to monitor user behavior and tailor the journey accordingly. Once you understand what your customers want and how they behave, you can apply it to every step of the customer journey.
While funnel analysis has many benefits for your brand, the most prominent ones are:
1. Identify where your users drop off the funnel
Funnel optimization provides a comprehensive analysis and perspective for each stage. This allows you to determine at what stage your users drop off and leave the funnel. Knowing where users are leaving on the journey will help you focus your optimization efforts on the most significant opportunities.
Funnel analysis also sheds light on which points you need to change and rearrange. Thus, each stage of the funnel provides opportunities for a smoother journey to the end of the funnel.
2. Identify which channels high-quality visitors come from
So far, I’ve mostly touched on how helpful funnel analysis is for finding issues that need fixing. But funnel analysis isn’t limited to just detecting problems. It also allows you to identify the channels through which high-quality visitors are most likely to complete all conversion milestones. In doing so, funnel analysis increases your chances of success by shedding light on which touch points you need to pay more attention to.
3. Simplify the funnel
You likely use many digital interaction points to attract prospects to your company. For that reason, you may be following your websites, mobile applications, email campaigns, and every other channel through their own funnels. Now, it’s important to consider the progression of each of these individual channels when you’re analyzing your funnels and customer journey.
How is funnel analysis conducted?
You are now familiar with funnel analysis and why you need it. But how do you do funnel analysis? Let’s take a look at an essential to-do list that you can use for this.
Map the ideal sales process
The first thing you should do as a starting point for funnel optimization should be funnel mapping. Without planning and creating all funnel stages, you cannot identify processes to improve or replace.
How would you like your prospects to decide on conversion? How can your team improve their sales deck pitch to effectively engage prospects? Or how does your sales team find and develop customers with email prospecting?
You need funnel maps to make it easy to successfully complete campaign goals like these and more. In addition, a funnel map can give you vital information to understand how potential customers connect and engage with your business.
Leverage and monitor KPIs
After drawing an ideal purchasing path and determining the process to follow, you should track the funnel’s success with KPIs and metrics. Here are some of the metrics that will help you in this process:
- Conversion rate: The conversion rate shows you how many of your total users convert i.e. complete a certain goal such as signing up for a trial or demo. This ratio is important because it gives an overall perspective on the success of your funnel.
- Time to convert: This metric shows how long it takes users to perform the desired action. If your users take longer to convert than you think, you may have a glitch in your funnel.
- Customer lifetime value: Lifetime value indicates the profit your users bring to your company while they’re a customer.
Continuously monitoring and analyzing your funnel with KPIs allows you to stay up to date with the overall health of the pipeline. Thus, you can actively observe the success of each stage and make amends immediately when there is a problem.
Examine customer behavior
With user behavior analytics, you can be aware of the ways your users interact with your business. Thereby, you can understand your users’ encounters with the process and identify their pain points.
You can start by using different tools to understand user behavior properly. For example, you can quickly identify your top converting touchpoints with a tool Hockeystack. Complete with visualizations and unified data from different departments, you can identify where users are the most likely to drop off. So, you can optimize your website or other touchpoints to minimize churn and maximize engagement.
You can also combine this information with data points you collect from your CRM tool. For example, you can track recipients who open your email and visit your website.
Long story short, the most important thing to focus on at this stage is to gather as much relevant information as possible from the appropriate data points. The more data you get, the more likely you are to detect problems and come up with solutions.
Be aware of issues at each step
The metrics and KPIs you monitor will reveal issues at each level of your funnel. Identify all these issues and prioritize them to resolve.
For example, let’s say your blog posts are vital in your funnel. In such a case, you should be concerned if your blog posts are not being read by your target audience and improve your inbound marketing efforts to ensure this isn’t the case.
But does this mean that you should only focus on the big problems and ignore the others? Of course not! What I’m saying though is that prioritizing your problems and creating a to-do list will prevent confusion in solving problems and will lighten your load a lot.
Evaluating and resolving key low points in your funnel will significantly increase your overall conversion rate. But remember: This is an evolving and continuous process, not a one-time practice. Continually make adjustments, evaluate the results and take the necessary action.
Improve your funnel with comparisons
When doing funnel analysis, whether you’re confused or need some inspiration, one of the best things you can do is identify and examine a competitor’s funnel. Comparing your funnel with that of a competitor helps you see how others in the industry convert their users.
As you compare your funnel to your competitor’s, observe which channels your competitor uses effectively and what calls to action they leverage to convert users. Try to identify which touchpoints may be successful and which are pain points. Analyzing another funnel as an outsider can reveal problems in your own funnel that you may not have discovered at first glance.
The funnel comparison will provide you with a lot of valuable information that you wouldn’t otherwise be able to get. But keep in mind that this is unlikely to yield relevant data about conversion rate at every stage of the funnel.
Improve your conversion rate with Hockeystack
If there is a part that I have repeatedly underlined in this article, it’s how important funnel analysis is for everything from streamlining your marketing efforts to optmizing your sales cycle. Analytics platforms are, therefore, almost indispensable for analyzing and optimizing the funnel as measuring and improving metrics like conversions without the right technology can be extremely difficult.
Hockeystack allows you to create near-perfect funnels by simplifying each step of funnel analysis.
So how does it do that?
Let’s take a look.
Mapping your funnel
First of all, Hockeystack lets you map your sales funnel. This way, you can easily observe each stage in your funnel on Hockeystack. What’s more, it allows you to track the success rate of each stage of your funnel monthly.
By mapping your funnel, you can monitor how many users passed to each funnel stage that month and how many dropped off on a single dashboard without typing any code.
Monitoring KPIs and metrics
HockeyStack allows you to track many metrics to stay aware of the current situation of your funnel and explore possibilities for improvement. You can create interactive dashboards to measure all these metrics and customize these dashboards according to your needs.
You can visit the live demo here to examine Hockeystack’s dashboards in more detail.
Examining customer behavior by integrating different tools
You need many different tools to optimize your funnel and create touchpoints as needed. Hockeystack brings all these under one roof, thanks to its integrations with countless tools, from email marketing platforms to CRMs.
Acquiring and converting users is critical to driving growth in your user base and customer lifetime value. That’s why ensuring these processes are as effective as possible is the most important thing to focus on.
Funnel analysis improves users’ experience, making user experience and conversion rates near perfect. With all these benefits, funnel analysis is an enormous starting point for what you need to focus on.
But conversion rates aren’t the only thing you need to be concerned about. Once you acquire and convert your users, you need to understand how to increase their loyalty and maximize retention.
As a result, the best way to achieve all this is to monitor multiple metrics and gain an in-depth understanding of user behavior. With a robust analytics tool like Hockeystack, you get the power to do this and more.
There are many tips for improving the funnel conversion rate. For example, you can run more personalized campaigns. Or, you can create more real-time interactions.
To analyze your sales funnel, you must first clearly know all the stages of the funnel. Afterward, you measure all these stages with appropriate metrics and KPIs and determine the pain points of the users. So you can focus on improving them by identifying the levels where your users drop off the most.