In eCommerce, sales funnels are the foundation to understanding your business. It is a way to analyze your customer behavior in various marketing activities as steps that rely on each other for increasing conversion, retention and guiding a customer towards loyalty. Think about your ideal buyer or visitor process. Where do they land? What should they do next? What’s the end goal? Through funnel analysis, we hope to gain insights into the motivators and activators for each step in the path to an action. You can then use this to develop a strategy that nudges them towards an end goal and maximizes spend for conversions and ROI.
Depending on the complexity of your digital experience, it’s likely there’s no single way to visit your site and reach these goals. That is, you can’t guarantee a visitor will always start at your specific page, like your home page, and end up at checkout. So how do you assign a value to each possible path and where your marketing efforts are best placed? This starts with understanding there are multiple funnels within your business, and they should be measured against each other. Through comparative funnel analysis, we can identify and improve the ways a guest can interact with your experience to reach a goal.
The AAARRR model simplifies and categorizes your funnel in to 6 steps – awareness, acquisition, activation, retention, revenue and referral. Comparative funnel analysis will measure the difference between the various versions of this, allowing you to optimize spend and conversion rates.
When comparing your funnels, there are some pitfalls and innovative solutions. It’s not always apparent which of your funnels are immediately valuable and worth investing in. This can be especially hard with limited tracking as understanding completion and abandonment is crucial for optimizing funnels. Google Analytics offers flexibility with assigning various stages through “custom funnels”. This allows you to quickly define funnels as they relate to your business. Having the flexibility to create custom funnels makes it less of an investment, of time and resources, to explore additional funnels.
Marketers have also started to pay attention to “split funnel” attribution. When looking to your funnels and deciding payment, you may be duplicating vendor costs or giving credit incorrectly to a single source for your customer’s activities. By splitting your funnel, you are able to more accurately compare your funnels and identify the best channels and strategies to invest in. That way, when you compare various funnels you are presenting an accurate analysis of the influences leading to a purchase.
Comparing your funnels as a series of steps can leave out user-based analyses that help identify the best funnels based on a particular segment. By considering segments such as device, browser, country of origination, and a number of other factors that may differentiate the experience, you are able to develop paths to purchase more specific to the user. This gives you the opportunity to place customers in the most likely funnel to convert.