What is Funnel Analysis?

A funnel is a sequential series of steps that visualize a user flow to conversion. Funnel exploration lets you visualize the steps your users take to complete a task and quickly see how well they are succeeding or failing at each step.

Businesses use funnel analysis to trace the user journey throughout their website, optimize it, and see how many visitors end up in each stage of the funnel.

In the above we can clearly see the drop-offs. And thus we can find what needs to be done to optimize the funnel.

Defining a Funnel

Depending on the complexity of a product, or the question you’re trying to answer, a funnel can be incredibly simple or overly complicated. Which is why defining a funnel correctly is extremely important to ensure accurate insights from your analysis. 

Consider a media and video sharing product. As a product manager you’ve been given some feedback — many people find the short form content on your platform unpleasant. Funnels lets you validate this feedback with data; you can start by creating a simple funnel with the following steps:

  1. Sign in
  2. Watch video
  3. Dislike video

But, this funnel considers all videos on your product. To count only short form videos, you can add a filter to this funnel — we added one for videos with a watch time of less than five mins, but Mixpanel lets you be more specific by filtering based on whatever video duration you consider as “short form”.

To truly get an understanding of people who dislike short form content however, you’ll need to exclude users who “liked” a video after watching it before they disliked a separate video. This can be done by adding an exclusion step between steps 2 (watch video) and 3 (dislike video), so you can narrow down the funnel even more.

This gives us more accurate numbers on exactly what we’re looking for. 

Seems like 29% of users that view short form content and react to it instantly dislike it. Having learned this, you can benchmark it against the dislike rates across other video categories and see if this is indeed higher than normal for your product.

Ultimately, every product and analysis is different, and to get to real insights you need to ensure you’re answering the right questions accurately. Funnels empower you to do so with many controls to tweak your funnel exactly the way your analysis needs:

  • Counting method: You can count users that entered your funnel as “Totals” or “Uniques”. Uniques counts all actions by the same user as one, while Totals considers each action separately (which is useful for calculating repeat conversion, like in a purchase funnel).
  • Conversion window: Determines the amount of time a user has after entering the funnel to be counted as a conversion.
  • Conversion ordering: The flexibility in the sequencing of a user’s actions. “Specific order” funnels users to complete each funnel step in the exact order you define, while “Any order” funnels show the conversion rate for all users in your funnel—regardless of the sequence of steps they take.
  • Exclusion steps: The actions you don’t want users to take between funnel steps. Users who do these actions are excluded from your funnel.
  • Constant properties: Holding a property constant in a funnel ensures that conversions are only counted for users that retain a constant value for a given property or attribute (like a page url, or a device ID) for each step in order to convert.

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