How to Conduct a Marketing Funnel Analysis

The marketing funnel (shown below) is the classic marketing concept that reflects how consumers progress toward conversion in a set of logical steps that mirror the consumer decision-making process. Funnel analysis (top, middle, and bottom) involves assessments at each stage of the funnel with the notion of both increasing the number of entries into the funnel and easing the flow resulting in higher conversion rates and profits. Analyzing the chain of events from start to end to identify and optimize the performance at each stage in the process is called marketing funnel analysis.  In today’s post, we focus on how to conduct a marketing funnel analysis.

brand awareness
Image courtesy of Visme

 

What is marketing funnel analysis?

Funnel analysis is used to analyze the sequence of events leading up to a point of conversion and even beyond to customer satisfaction, loyalty, and retention.  Marketing funnel analysis helps marketing managers understand the aggregate behaviors of consumers as well as differences across consumer segments to better understand the obstacles they encounter throughout the customer journey that keep them from making a purchase. A better understanding of these obstacles is the first step in removing them to gain a higher conversion rate and more profits.

Modern website analysts favor a version of the funnel based on elements of cognition and emotion called the see, think, do process. Below, you can see a version of that model, which mirrors the traditional construction of the marketing funnel, as well as website metrics you might use to monitor your performance at each stage of the process and marketing tools to aid efforts to improve your performance. Later adaptations of this concept add feeling to the stages. Unlike the traditional funnel construction, this option, integrating ctv advertising, provides a great starting point for analyzing performance along the funnel.

marketing funnel analysis
Image courtesy of Occam’s Razor

What does your funnel look like?

As you might imagine, the prototypical marketing funnel doesn’t reflect all consumers nor does it reflect all product categories. For instance, the funnel for impulse buying relies on emotional elements more heavily hence the process looks more like see-feel-do. In other cases, consumers might get into a loop of thinking, especially when decisions involve risk or when too many options are available. Academic researchers, like Tversky, found that the optimal number of choices to give a consumer to ease the decision-making effort was three, while practitioner-focused experts recommend seven plus or minus two as the perfect number of choices. This is the reasoning behind e-commerce sites providing filtering so that consumers quickly get to a manageable number of choices rather than facing too many choices that often lead to indecision.

Hence, the first step in analyzing your funnel is to know what the typical funnel looks like to your target market. You may even face several slightly different funnels with different segments of your target market.

Significance of the Marketing Funnels Analysis

  1. Marketing funnel research is crucial because it gives useful insights into the customer journey, helping firms to enhance the customer’s experience.
  2. Funnel analysis may help organizations discover specific points in the customer journey where consumers are bouncing off or facing issues, allowing them to fix these loopholes and boost conversion.
  3. Businesses may obtain a better understanding of what motivates users to convert by watching user behavior at every level of the marketing funnel and using this knowledge to design and implement more successful marketing efforts.
  4. Organizations may boost their return on investment (ROI) from marketing efforts by streamlining the customer journey.
  5. Businesses may test multiple methods and make data-driven choices to optimize the customer experience and improve conversion rates over time by continually measuring and evaluating the funnel.
marketing funnel analysis
Image courtesy of Taboola

Types of Funnel Analysis

Businesses may use different types of marketing funnel analysis to track and evaluate the customer expedition. The common types of analysis are as follows:

  1. Website funnel analysis – The website funnel analysis follows a customer’s path through a website, from the first-page view until the conversion. It may assist organizations in identifying specific pages or portions of their website that are driving people to leave.
  2. Sales funnel analysis – This type of funnel analysis monitors the customer journey from initial lead generation to final sales. It may help firms in identifying key phases in the sales process where prospects are dropping off or having difficulty.
  3. Marketing funnel analysis – This marketing funnel analysis follows multiple marketing channels, such as social media, email, and search advertising of their users. It may assist firms in determining which marketing channels are generating the most traffic and conversions and then optimizing their marketing efforts accordingly.
  4. User funnel analysis – User funnel analysis involves various user behaviors, such as sign-up, onboarding, and engagement. It helps organizations in understanding the customer’s view from the standpoint of a product or service.
  5. Multichannel funnel analysis – This funnel analysis evaluates the funnel across numerous channels or touchpoints, such as a website, social media, and email to apportion credit for the sale across these various channels as well as to evaluate the effective handoff of the funnel across channels.

How to perform funnel analysis and steps for the marketing funnel analysis?

The following are the general procedures to conduct marketing funnel analysis for your company:

  1. First, identify the business goals before doing a marketing funnel study. The question is: what do you want to gain from your marketing funnel analysis? Is it to raise conversions, increase traffic, or improve client retention? Measuring and monitoring KPIs can be easier when specific goals are set.
  2. Then determine the various stages of the marketing funnel. This might include awareness, interest, consideration, conversion, and any other stages particular to the organization. By establishing clear criteria and outlining the steps involved in transitioning from one stage to another, businesses can effectively evaluate and optimize their digital marketing services funnel.
  3. After setting up the analytics tools, collect data on user activity at each level of the funnel. Metrics like traffic, click-through rates, conversion rates, bounce rates, and time on site are included.
  4. The next stage is to examine the data to discover areas for improvement in the marketing funnel. Keep an eye on consumer activities, such as high bounce rates or poor conversion rates, and utilize this data to improve the marketing plan.
  5. Organizations may improve their marketing funnel analysis based on thorough research and by adjusting the website, content, or marketing efforts.
  6. SEO services are offered on the market by firms and other organizations. A decent SEO of the website may boost its ranking in search engines and aid to optimise the marketing funnel analysis.

Marketing funnel analysis is an ongoing activity. It is critical to test and update the marketing approach on a regular basis. Try to experiment with multiple marketing techniques using A/B testing and other methods, then follow the results to find what works best for the business.

Moreover,

These are the general steps of the funnel analysis. Marketing funnel analysis entails useful insights into the consumer journey and improves the marketing efforts by following these above steps.

Based on unique needs, goals, and situations regarding your market or product discussed earlier, organizations may utilize several forms of funnel analysis to track and evaluate the customer journey.

Tools to conduct marketing funnel analysis

Analytics, either in sales or marketing, is an indispensable part of any organization. It is one of the necessary areas in marketing to achieve the business goal and to perform this thorough research is required.

Major tools for funnel analysismulti-channel attribution

A variety of tools exist for conducting a funnel analysis. Below are some common options:

  • Adobe’s funnel analysis product
  • Google Analytics (such as the one to the right)
  • Heap
  • Mixpanel

Below are a few examples of tools that were used in the process of conducting research and conversion funnel analysis. There are no better tools on the market for research purposes and product analysis than those listed above. Businesses use marketing funnel metrics to track and evaluate the customer journey through a given process to discover areas for development or optimization. It entails breaking a bigger procedure down into smaller, specific phases and measuring conversion rates to find where consumers may be slipping off.

For example, a corporation may utilize a digital marketing funnel to measure the conversion rates of website visitors from initial visits to purchase fulfillment. By breaking the process, such as add-to-cart, checkout, and payment confirmation, the organization can see where consumers are abandoning the process and take action to increase conversion rates at each level.

There are several analytical tools available to measure user activity and conversion rates at each stage of the funnel. It may assist firms in identifying points of friction, such as slow-loading websites or perplexing user interfaces, and making data-driven decisions to optimize the customer experience and increase conversion rates.

To follow the website’s activity, funnel analysis is just as crucial as SEO marketing. There are various firms and organizations in the market that provide SEO services for websites, as well as a range of marketing and sales funnel analysis and research services for businesses.

Next steps

Obviously, analyzing the funnel is just the first step. Next, you must optimize performance by identifying tactics that generate easy flow through the process and reducing the friction that slows or stops progression. For instance, you might identify the most effective calls to action – CTAs (maybe through A/B testing) and reproduce those with the highest conversion rate. Test the CTA button color, words used (the offer), where you place the button on the page, and anything else related to the CTA. Also, test the copy surrounding the CTA to ensure it hits both the hearts and minds of visitors to encourage them to click.

Removing obstacles is equally important. For instance, reduce the number of clicks necessary to convert and don’t collect information unnecessary to fulfill an order. Share accurate pricing up front so there’s no surprise in the checkout process, such as added shipping charges. Maintain up-to-date inventory so you don’t promise something that isn’t in stock.

Final takeaways

Finally, completing a marketing funnel analysis is an essential step for any company (startup or enterprise) trying to optimize its marketing approach and increase conversions. This marketing funnel analysis can assist you in understanding the approach (marketing or sales) firmly. Organizations also adjust the marketing funnel to better suit the aim of their business and the expectations of the target audience with continual monitoring and optimization. It will probably drive more traffic, generate leads, and boosts sales.

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