What is a conversion funnel?
A conversion funnel is an ordered sequence of steps toward a goal. How to define the steps, read drop-off, and avoid the mistakes that flatter the numbers.
What is a conversion funnel?
A conversion funnel is an ordered sequence of steps a visitor takes toward a goal, measured by how many people reach each step. It converts one conversion rate into a map, so instead of knowing that 2% converted you know which specific step lost the other 98% and roughly why.
The formula.
Step conversion = (users reaching step N / users reaching step N-1) x 100
- step conversion
- The pass rate for one step. This is the number that identifies the problem.
- overall conversion
- The product of every step conversion, which is the headline figure.
Overall conversion is multiplicative, so a five-step funnel where each step passes 80% converts at 33% overall. Small per-step losses compound quickly.
A worked example.
A SaaS trial signup funnel over 30 days.
| Viewed pricing | 9,400 |
|---|---|
| Clicked start trial | 2,820 (30%) |
| Submitted the signup form | 1,974 (70%) |
| Verified email | 1,145 (58%) |
| Completed onboarding | 985 (86%) |
Overall conversion = 10.5%, and the worst step is email verification at 58%
The 42% lost at verification is the cheapest thing to fix on the whole list: a clearer send, a resend button, a shorter wait. Recovering half of it adds roughly 240 activated users a month without touching the product.
What a funnel report shows you
The value of a funnel is that it turns an opinion into an ordering. Everyone has a theory about why conversion is low; the funnel says which step to work on first.
Read it in two passes. First the per-step rate, to find the step with the worst pass rate. Then the absolute count, because a bad rate on a step almost nobody reaches is worth less than a mediocre rate on a step everybody reaches.
The steps that reward attention are usually boring: an email that lands in spam, a required field nobody expected, a card form that rejects a valid number, a validation error that does not say what is wrong.
Building a funnel that tells the truth
- 01
Start at the last step and work backwards
Define the goal first, then ask what necessarily happened before it. Funnels built forwards tend to include steps that are optional in practice.
- 02
Keep it to three to six steps
Every extra step adds a place for a definition to be slightly wrong. Long funnels are usually two funnels pretending to be one.
- 03
Decide on the window
Must the steps happen in one session, or within seven days? The answer changes the numbers substantially, so state it on the report.
- 04
Segment once it works
The same funnel by source, by device and by landing page is where the actionable differences live. A mobile-only collapse at one step is a layout bug, not a messaging problem.
See it on real data
The live demo is a fully populated dashboard with real demo traffic. No signup and no card required.
Open the live demoWhere funnel analysis goes wrong
Steps that are not really sequential
If people can reach step 3 without step 2, the funnel will show impossible rates. Model it as two paths rather than forcing an order that does not exist.
The wrong time window
A same-session funnel applied to a purchase people consider for a week will show a catastrophic drop that is really just people coming back later.
Averaging incompatible traffic
Paid social and organic search behave nothing alike on the same funnel. Blended, they produce a middle number that matches neither.
Stopping at the number
The funnel identifies the step. It does not say why. Watching a handful of sessions that died at that step usually answers the why in minutes.
Funnels in Mrkr
Funnel steps in Mrkr can be pageviews or custom events, so the same funnel can span a marketing page, an app screen and a server-side purchase confirmation.
Within-session funnels work fully in the default cookieless mode, since a session does not require cross-day identity. Multi-day funnels need identity that persists, which means the optional per-site cookie mode, with the consent requirement that brings, or your own user id.
Where session replay is enabled, the sessions that dropped at a given step are one click from the funnel, which shortens the gap between finding the step and understanding it.
Questions, answered.
Related terms.
- What is conversion rate?
Conversion rate is the share of visits or visitors that completed a defined goal, such as a signup, a purchase or a demo request.
- What is exit rate?
Exit rate is the share of views of a given page that were the last page of the session.
- What is session replay?
Session replay reconstructs a visitor's session as a playable recording of what happened on screen.
- What is landing page?
In analytics, a landing page is the first page a visitor sees in a session, whatever page that happens to be.
- What is event?
An event is any recorded action beyond loading a page: a button click, a form submitted, a video played, a subscription upgraded.
Where this shows up in Mrkr
- Build funnels from pageviews and events in Mrkr
Drop-off per step, segmentable by source and device.
- Watch the sessions that dropped at a step with session replay
- Browse the full analytics glossary
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