Conversion Funnel
A conversion funnel is a model that illustrates the user’s journey from the first point of contact with a company to the target action: a purchase, request, registration, or subscription. It’s called a “funnel” because at each stage, a portion of the audience drops off, and fewer people reach the final action than started at the beginning.
What Does a Conversion Funnel Look Like?
A classic example:
- Ad Impressions — 10,000 people
- Website Visits — 1,000 people
- Add to Cart — 300 people
- Order Completion — 120 people
At each stage, some users leave, so visually the model resembles a narrowing funnel.
What Stages Make Up a Funnel?
The structure depends on the type of business, but most often includes:
- Reach or impressions
- Website visits
- Interaction with content
- Add to cart / request submission
- Purchase or payment
- Repeat purchase
In the B2B sector, stages might include:
- Request submission
- Lead qualification
- Presentation
- Commercial proposal (quote)
- Deal closure
How is Conversion Calculated?
Conversion at each stage is calculated using the formula:
Conversion = (Number of users moving to the next stage ÷ Number of users at the current stage) × 100%
For example: Out of 1,000 website visitors, 120 placed an order.
Website conversion = (120 ÷ 1,000) × 100% = 12%
Why is a Conversion Funnel Needed?
It helps to:
- See where users most frequently drop off.
- Identify weak stages in the sales process.
- Improve the user experience.
- Increase overall conversion rates.
- Forecast revenue.
- Allocate the marketing budget correctly.
If you see that many people add items to the cart but don’t pay, the problem might lie in the checkout process.
What Metrics Are Analyzed Alongside the Funnel?
- Conversion rate by stage
- Customer acquisition cost (CAC)
- Average order value (AOV)
- Revenue per user
- Sales cycle length
- Traffic sources
It’s important to analyze not only the overall metric but also segments — by channel, device, region.
Typical Mistakes
- Analyzing only the final conversion without breaking it down by stage.
- Lack of audience segmentation.
- Ignoring offline stages (calls, meetings).
- Incorrect goal setup in analytics.
When is a Funnel Especially Important?
- In e-commerce stores.
- In SaaS and IT products.
- In B2B with a long sales cycle.
- When scaling advertising efforts.
Key Takeaway
A conversion funnel shows not just the number of sales, but the entire customer journey leading to them. The better a company understands exactly where it loses users, the easier it is to increase sales without growing the advertising budget.
