Analyze and optimize your funnel for conversion

Product Marketing Beginner

Made by Segment

In this recipe, you'll learn how to analyze your marketing funnel, and then optimize it to boost your conversion rate by 2-3x.
What do you need?
  • Your funnel events must be tracked: “Signed Up”, “Viewed Item”, “Completed Order”
  • An analytics tool like — we’re using FullStory in this example
  • A screen recording tool — we’re using FullStory i
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When new users sign up for your product, it’s inevitable some will get stuck. Maybe they’re confused by your UX and aren’t sure how to proceed. Maybe they don’t know what pricing plan is right for them.

Whatever the reason, our customers have found that a little bit of user testing can have out-sized effects on your funnel, increasing your conversion by 2-3x. Here’s how to do it.

Step 1: Analyze your funnel events

For most products, there is a sequence of steps you’d expect new users to navigate through to achieve an ultimate goal or conversion.

The first step is to map out these events and start tracking those in Segment.

To start, make sure you have a Javascript or Mobile source which is tracking your key goal or metric and the steps leading up to it.

If you don’t know what your key goal or metric is, we suggest reading our article on choosing the “one metric that matters”.

Whatever yours is, make sure it ties to some meaningful part of your businesses’ revenue.

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Once you have the one metric that matters, make sure you’re tracking the 3-5 steps which lead a user up until that point.

For example, for a company like Netflix, their steps might look something like this:

The end goal is to become a paying customer, but there are a few steps before that happens which are important to get right. In general, there are a few tips we have to get this right:

  • Track impressions as well as events. You want to see how many people filled out your form, but also how many people got there in the first place. Make sure you are making page calls or tracking events when a user first enters a funnel step as well as when they leave it.

  • Take it slow. Don’t agonize over getting individual steps in your funnel exactly right. what’s most important is that you have a definition of the funnel that you can iterate on over time.

  • Minimize the effort of each step. The best funnels we’ve seen balance the value the user gets from the cost to complete that step. If the cost is too high, users will drop off.

Once you have your funnel, it’s time to start analyzing it.

You can do this in many different tools, but for the purpose of this recipe, we’ve chosen Amplitude.

Start by creating a new “Retention analysis” chart. In the upper left of the screen, you’ll want to add in the particular events you are collecting in sequence.

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Once we have added our five conversion events, we can visualize them and see the drop-off. Each bar in the chart below shows the number of users who have made it to the next stage and gives us a sense of the fall-off.

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Amplitude also gives us a view of the individual users who fell off at each funnel stage. When we click in to “View Users”, we can then see the individual user records.

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Of course, this will leave you wanting to know more about what’s happening with these specific users. Beyond those events, what’s stopping those users from getting to the next step?

Step 2: Watch 5-10 specific user journeys

Fortunately, there’s another tool that can help you do this. FullStory is a digital analytics tool that helps you analyze individual user journeys and “follow along” when a user hits a speed bump. Simply head to your Segment UI’s Destinations page, and add FullStory as a destination.

Once your data is flowing into FullStory and the FullStory’s recording snippet is initialized onto your page, you can filter for a particular User ID in FullStory.

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From there, you can playback the full user session, and see when and why users are hitting issues. The below example is FullStory recording of a user navigating the Segment web app.

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We can then take this one step further by searching for the exact events we’re tracking in FullStory. We can measure the user’s progress and “follow along” to see exactly where they got de-railed.

After watching even 5-10 of these recordings, you can get a good idea where users are dropping off.

Step 3: A/B test and measure

Once we’ve identified the biggest opportunities for improvement in our funnel, it’s time to A/B test some different techniques for getting users back into the product.

Here are a few of the ideas we’ve found to be successful:

Optimize the first mile of your product

When a new user signs up, assume they have little to no previous knowledge of your tool.

It’s much better to:

  • Limit the options of what new users can do. If there are more than 3-4 paths new users can take it’s too many! Limit the first steps your users can take to just a handful, to ensure they can make continued progress later on.

  • Optimize your “blank slate” experience. Because it’s their first interaction with the product, most of your new signups will be met with a “blank state” — a screen with no activity, history, or data. Design for this state with things like dummy data, tooltips, or interactive walkthroughs so new users aren’t crippled right out of the gate.

On that note…

Use in-app walkthroughs with Appcues or Intercom

We’re big fans of the principle of “show, don’t tell”. There are some really useful tools in the Segment catalog like Appcues and Intercom which will let you create interactive onboarding walkthroughs and guide new users through your conversion funnel.

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Email is a powerful tool to bring people back

If all else fails, email is one of the most powerful ways to bring users back. We’ve seen our conversion rates increase substantially thanks to a few well-timed emails.