What is Funnel Analysis?
Measuring stepwise conversion through an ordered series of events to find where users drop off. Funnels turn vague activation complaints into a specific step with a specific leak to fix first.
Example
A checkout funnel of viewed pricing to started trial to added payment to subscribed shows the steepest drop between trial and payment, so the team tests payment-step copy before touching pricing.
What people get wrong
Averaging conversion across all traffic. Blended funnels hide segment truths; split by source, device, and new versus returning users before redesigning anything.
Frequently asked questions
How many steps should a funnel have?
Three to six covering one job: more steps usually means you merged two jobs and should split the funnel.
Related terms
Event Tracking
Recording user actions as timestamped events with properties, the raw material of product analytics. Clean event tracking answers what users do before asking why; replays and surveys explain the motivations behind the counts.
Cohort Analysis
Grouping users by shared start time or behavior, then tracking each group retention or revenue over its own lifetime. Cohorts reveal whether product changes help new users or just reflect older, stickier ones.
Conversion Rate
Visitors completing a goal divided by total visitors. The metric that turns traffic into money; intent-matched pages convert multiples higher than mismatched ones at equal volume.
A/B Testing
Comparing two or more variants on randomized audiences to measure causal impact on a chosen metric. Valid tests need a written hypothesis, sufficient sample, and guardrail metrics so wins do not hide damage elsewhere.
Autocapture
Automatic collection of clicks, pageviews, and form interactions without per-element instrumentation. Fast to start but noisy: retroactive data comes with vague names and mystery events that explicit tracking would have labeled.
Explicit Events
Hand-defined tracking calls placed at meaningful product moments: signup completed, checkout started, invite sent. Explicit events cost engineering time upfront and pay back in clean names and trustworthy funnels.