What a funnel measures
The classic e-commerce funnel:
- Visit, landed on the site
- View product, viewed a PDP
- Add to cart, added at least one item
- Begin checkout, entered the checkout flow
- Purchase, completed an order
Each step has a conversion rate (% who progress from previous step). Multiplying them gives overall site conversion rate. The leakiest step is usually where the most improvement is available.
Funnel + dimension
A funnel viewed across all traffic hides a lot. The same funnel split by:
- Device, mobile vs desktop often differ 2-3× at the checkout step
- Channel, paid social vs organic search often differ dramatically at PDP
- First-time vs returning, first-time conversion rates are routinely 4-5× lower than returning
- Cohort, recent cohorts may convert differently than older ones (campaign quality, audience saturation)
Most funnel improvements come from spotting where a slice underperforms versus the average and figuring out why.
Funnels at different scopes
Three common scopes:
- Acquisition funnel, ad impression → click → visit → conversion. Mostly lives in the ad platforms.
- Site funnel, visit → product view → cart → checkout → purchase. Lives in analytics tools.
- Lifecycle funnel, first purchase → second purchase → subscriber → loyal customer. Lives in CRM and customer analytics.
Each scope answers different questions. Optimising the site funnel doesn’t fix a broken acquisition funnel.
Common funnel patterns
A few that show up in many e-commerce businesses:
- Bounce on the PDP, bad imagery, bad UX, bad load time, mismatched audience
- Add-to-cart but no checkout, pricing surprise, shipping cost shown late, account requirement
- Begin checkout but no completion, payment friction, address validation issues, perceived security concerns
Funnel data points at the symptom. User research finds the cause.
Beyond the conversion: retention funnel
Lifecycle teams build the post-purchase funnel:
- Day 0 (purchase)
- Day 30 (email engaged?)
- Day 60 (returned to site?)
- Day 90 (second purchase?)
- Day 365 (loyalty cohort?)
Each step has its own conversion rate. The retention funnel is what compounds into LTV.
Common mistakes
- Aggregating funnels across cohorts. A funnel based on six months of data hides whether recent cohorts are getting better or worse.
- Optimising one step at a time. A 10% lift at PDP might cost 5% at checkout. Watch the full funnel.
- Funnel without segmentation. The leaky step in the average funnel often isn’t the leaky step in any individual segment.
FAQ about Funnel
What is a marketing funnel?
A funnel is the sequence of steps a user moves through from awareness to conversion, visit, view product, add to cart, begin checkout, purchase. Each step has a conversion rate. The cumulative product is the overall site conversion rate.
How do I find the leakiest step in my funnel?
Plot the conversion rate at each step. The step with the lowest progression rate (relative to industry benchmarks for that step) is the leakiest. Investigate by device, channel, and cohort to see where the leak is worst.
What is a retention funnel?
A retention funnel tracks post-purchase progression, first purchase → second purchase → loyal customer. Compounds into LTV. Different from the acquisition funnel but uses the same step-by-step measurement pattern.