How Marketing Funnels Work
July 28, 2022
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If digital marketing is interesting or relevant to you, you have undoubtedly heard about the concept of a marketing funnel. You may, however, wonder precisely what a funnel is, what they do, if they are essential, and how you can use them. Let’s examine and answer all those questions and more.
What Is a Marketing Funnel?
Before we can clearly articulate what a funnel is, we need to have a common definition of the word conversion. A funnel is both a path toward and a tool to achieve conversion, so let’s start with that.
Conversion, as the term is used in marketing, describes the act of moving a potential customer from someone just browsing a website to someone making a purchase or reaching a stated goal. We’ll discuss conversion goals later in this post. Making a purchase is a common goal, but there are many equally legitimate conversion goals. The purpose of your website will dictate what conversion means for you.
Be careful to keep the concepts of goals and funnels separate in your mind. The goal is the desired result. It is the sale, the email signup, or lead generation. Conversion is complete when the user reaches your goal. The funnel is the vehicle you have devised to carry the user from your first interaction with them all the way to the goal.
While a funnel describes the path a user needs to take to count as a conversion, it is also a measuring tool to help you monitor and guide their progress along that path. By outlining the steps that lead from browsing to purchasing, you can visualize and quantify where your website users are along that path. You can watch for bottlenecks and obstacles that may lead people to fall out of your funnel.
When thinking about your marketing funnel, think less about a restraint that forces what’s in the funnel to the bottom (like using a physical funnel to pour water into a bottle) and more about a snapshot of where all your website users are along the path and how they got there.
You could say that your marketing funnel exists whether you are aware of it or not. There is, even if not clearly defined, a path that users can follow to purchase on your site. Using a Google Funnel Visualization report enables you to monitor and adjust that path purposefully, so the largest number of people will make it to conversion.
Why Are They Called Funnels?
The moniker funnel is a bit ill-fitting. In the physical world, a funnel directs everything put into its mouth out through the bottom. In the world of digital marketing, however nice that would be, it is not realistic to think that everyone that lands on your website will follow the steps you’ve outlined and end up making a purchase. What we call a funnel has the characteristics of a filter, or even a sieve, more than a physical funnel.
It is called a funnel because of its shape. Wide at the top and narrow at the bottom.
You construct a funnel by creating or identifying a list of steps that lead to conversion, but that list will be quite linear, not funnel-shaped. The term funnel describes the shape of the mass of people you are trying to get to follow your linear list of steps. At the beginning of the process, there are a lot of people. As they continue along the path, some will wander off, and others will drop out altogether.
Why a Funnel is Useful
A funnel provides visibility into the behavior of your website visitors. Without a funnel, you will be flying blind and hoping for the best. Because a funnel is primarily a tool for achieving your marketing goals, it would not be an exaggeration to say that funnels are essential for effective marketing.
A well constructed and continuously monitored funnel will allow you to fine-tune your website and purchasing process. This process will yield results well worth the effort required to understand and work with funnels.
We stated earlier that one of the characteristics of a funnel is that of a filter. Everyone that your advertising and marketing nets can gather in enters into the top of the funnel. Only interested buyers will continue to the next step. The filtering that happens along the funnel is a good thing. No one wants to expend resources that will never result in a purchase.
The effectiveness of your advertising campaigns largely determines the quality of what goes into your funnel. Click here to learn more about how to find success with your Pay-per-click advertising campaigns.
What Does a Funnel Look Like?
A basic funnel with the end goal of making a purchase may have the following steps:
- Visit Site
- View Product Page
- Click on Product Details
- Add Item to the Virtual Shopping Cart
- Proceed to Checkout
As you can see, the top of the funnel (visit site) will have the largest number of website users. As you look down the list of steps, you are sure to lose users along the way.
As you might expect, there are very close parallels between digital funnels and the physical-world purchasing process.
A funnel provides a method by which you can view and monitor the customer’s movement through your virtual store. Wouldn’t physical-world shop owners like to have that visibility?
If you can, over time, come to rely on a certain percentage of the people entering into the top of the funnel completing the process by making a purchase, you have a good baseline from which you can measure changes you make as you try and improve your website’s performance.
Depending on the product or service you offer, conversion can mean different things. As we said earlier, many people measure conversion in terms of purchasing. But, this really only applies to eCommerce sites or with sites that provide the option to purchase online.
Your product or service may be such that online purchasing is not your objective. The purpose of your website may be to generate leads for your salespeople to follow up. Maybe your goal is to get people to sign up for your newsletter, watch a video, or download an app. All of these goals can be the objective of conversion.
You may have multiple funnels, measuring progress toward various goals on your website. Figure out what you want people to do on your site and build a funnel to measure its effectiveness.
You can not set up a funnel until after you select a goal. Before you save your goal, you have the option of adding a funnel by following these steps:
- Select the Use Funnel checkbox
- Enter URLs and names for the funnel steps – these are the pages you have decided should be included in the path to your goal
- Select the “Required Step” checkbox for the first funnel step
Step 3 is often recommended for generating more straightforward funnel data but is not required. If you do want the Funnel Visualization report and the Funnel Conversion Rate to count entries into the funnel at a point below the first step, keep “Required Step” unchecked.
How Can You Improve Your Funnel?
There are myriad ways you can improve your funnels. The fact that they can be improved upon is precisely why they are an invaluable tool. The ability you have to enhance them is why a funnel is more than just a measurement of the end result.
You can refine your funnel. If you find, by reviewing the Funnel Visualization report, that users that skip a certain step have a higher conversion rate than those that include that step, you might reexamine the usefulness of that step altogether. Or, you might make it a required step, but improve the content on that page.
You can “widen the funnel.” Widen the funnel is an expression used to describe bringing more people into the top of the funnel. Visualize making the top of a funnel wider – it would necessarily catch and bring in more. Expanding your advertising to different vertical markets, geographic locations, or interests are all ways of widening the funnel.
Whatever will bring additional users to your website – if that is the first step in your funnel – widens it. Remember, however, the goal is at the other end of the funnel, so if you lose all those new users along the path through the funnel, then the widening was not effective.
Funnel Visualization Report
Knowledge is power, and the Google Funnel Visualization report provides you with the information you need to assess the steps in your funnel. Simply monitoring the final purchase point doesn’t offer enough information for many websites. People that convert on your site do so by following a set of steps, but what were those steps? Were they the ones you carefully designed and set up in funnel setup steps? Or did some of them find another way to get to your goal?
More importantly, what about the conversions that didn’t happen? Where did you lose those customers? Were they close to making a purchase?
To keep your funnel steps refined and practical, these are questions you need to answer. The Funnel Visualization report can give you this information.
The Funnel Visualization report allows you to take a step beyond merely looking at total conversions and overall conversion rates as a part of website performance analysis. When setting up a conversion to track, be sure to think about all of the funnel steps that you can also follow in the process.
Multiple Page Views
For your funnel to be useful, you need to know where each user is along the funnel path you have designated. If a person visits your product details page more than one time, for example, you don’t want your funnel distorted by reflecting that the additional visits were more people visiting that page. That person only represents one potential sale, so your Funnel Visualization report needs to indicate that. If it doesn’t, you will have a difficult time trying to determine your correct conversion rate.
Non Sequential Page Views
The Funnel Visualization report does not indicate the order in which a user views your funnel steps. Analytics scans through each session and checks if those specific steps were viewed. If they were, it increments the count for that step.
Not all visitors will follow the steps along the funnel path in the order you intended, and that is often just fine. If a user has done their research elsewhere, they may go directly from your landing page to the purchase page and skip some intermediate step you have in place for gaining additional information. Construct your funnel to be okay with nonsequential visits.
The entrance to the funnel is always assigned to the step in the user’s path that was highest in the funnel (i.e., the step with the smallest number), even if the user entered lower in the funnel. The exit to the funnel is assigned to the step in the user’s path that was lowest in the funnel (i.e., the step with the largest number), even if the user exited higher in the funnel.
Backfilling Middle Pages
What happens if someone skips one of the steps in the funnel? The Funnel Visualization report backfills any skipped steps between the step at which the user entered the funnel and the step at which the user exited the funnel.
When a user on your website reaches a goal you have established, be it making a purchase or some other goal, that is called a conversion.
A funnel is a tool used to track and visualize the user’s progress along the path you have set out for them. You can have as many funnels, leading to as many goals as you like. Each funnel can have as many steps as you need to understand the user’s behavior.
The Google Funnel Visualization report provides the insights and feedback needed to continually refine the steps in your funnel. This refinement will make your website more effective and increase the number of visitors to reach your goals.
Within the Funnel Visualization report, you can define how you want to handle user behavior like looking at a page more than once, viewing pages in an unexpected order, or skipping some pages all together.
About THE AUTHOR
After working for multiple digital advertising agencies and managing hundreds of client accounts and spending millions of dollars via Google Ads, Facebook Ads, Native Ads and Direct Media Buying, I took things out on my own and started SparrowBoost. Now, my tight-knit team and I continue to get smarter and more efficient at running our own campaigns and we share our knowledge with you.Learn more about SparrowBoost