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Picture this: you are in a grocery store, shopping around, filling your cart up with bread, eggs, and other goodies. You finish shopping and are ready to pay, but after making your way to the checkout line, you find a huge line that is nearly going out the door. Frustrated, you leave your cart by a magazine rack near the line and walk out of the store, abandoning the whole purchase.

Unlike brick and mortar store owners, who have difficulty identifying why walk-in store visitors may abandon purchases, as ecommerce merchants we have a lot more power in the online world to quantify where and why visitors abandon purchases and forms. Conversion funnels help website owners understand the online behavior of visitors during a conversion process.

Conversion Funnel Basics

Generally defined, a conversion funnel is a structured path that a visitor takes on a website, such as a checkout process, to achieve some goal. This may include reaching a "Thank You" confirmation page or some other conversion event. Note that a conversion funnel is importantly different from an unstructured path analysis, which is defined loosely as the general process of examining sequences of pages visited during visitor sessions that lead to conversions, and is generally thought of as far less insightful.

As analytics tools, conversion funnels work by identifying where visitors drop out of the conversion process. They also identify the number of visitors that progress through the various self-identified steps, and on which pages they abandon the conversion process, as well as the final small number of visitors that convert. The value of conversion funnels lies in that they offer actionable information to identify where a website conversion process is hemorrhaging in converting visitors and potential revenues. Specifically using Google Analytics, you can also create funnels using time-on-site and bounce rates. Some common examples for structured conversion paths or conversion funnels include ecommerce purchases, lead form fills, and charity donations.

Most analytics tools, including Google Analytics, Omiture Site Catalyst, Clicktracks, and Clicktale, identify the steps in the conversion process where visitors exit or abandon. The most important thing to keep in mind when analyzing a conversion funnel is the need to identify which page has the highest exits. By identifying which pages are causing you the deepest losses of visitors, you can do further exploration into which features of the page are the culprits. Some things to look at once you have identified this crucial step in your conversion process are overall usability and presence of a clear call to action. If usability is the suspected cause of the loss, split testing or multivariate testing can be done for that page to help reduce exits and improve conversions.

Creating & Troubleshooting a Conversion Funnel In Google Analytics

Setting up conversion funnels using website analytics software such as Google Analytics is very straightforward. To begin in Google Analytics, simply create a goal and at the bottom of the form used to create a goal, click the a checkbox for, "Yes, create a funnel for this goal." However, despite the ease of setting up a conversion funnel, there are some problems that can occur. Here are some things to keep in mind to help troubleshoot common conversion funnel issues in Google Analytics.

When publishing analytics code on a website, make sure that all the pages are tagged. Specifically, add tracking code to all confirmation pages. Be sure that the first step of the funnel is a page that is common to all visitors working their way toward a given conversion. For example, if a given site is an ecommerce site and the subject of analysis is user flow through a checkout process, exclude product pages as a step in the conversion funnel.

Google Analytics features the ability to use regular expressions to define conversion funnels. One popular way that regular expressions are used in a conversion funnel is to use wildcard characters and other regular expressions for matching more than a single URL for a given step. One important thing to keep in mind with using regular expressions in your conversion funnels is that backslashes must be escaped, or the funnel will not work. When creating a conversion funnel using Google Analytics, there is an option to make a "required step." This means that the step identified is a necessary step in the actual conversion process. Make sure that is the intent when defining a step as such.

Tips for Leveraging Conversion Funnels

Analyze Funnel Backwards

Imagine a funnel with four steps. As analysis proceeds deeper down the funnel, there are fewer variables that need to be accounted for, including visitors, pages, keywords, and so on. It is common when one first begins a funnel analysis to start at the top of the funnel, but counterintuitively, there are often more fruitful insights to be found by starting a conversion funnel analysis on the page that people are converting on, and then working up the funnel. By starting at the bottom of the funnel, you will have a lot more context as you work your way up to the highest levels of the funnel.

Compare Your Funnel Results to other systems

When it comes to any kind of analysis of Internet marketing, it is always wise to use multiple tools together, in order to gain deeper insights. Conversion funnels are no exception. If you are doing any lead generation, compare the conversions in your funnel to your CRM system. You can do analysis in your CRM to see how qualified the leads are, and identify ways to qualify leads better, or improve the conversion process on your website based on the features of customers you have already converted.

Converting more visitors is one of the best ways to increase website revenue without having to invest in increasing overall traffic. Conversion funnels are a great starting point for identifying conversion opportunities that may be otherwise missed, and blunders that may be invisibly hurting your overall website profits. Analyzing the conversion process on your site can help you identify the small changes that will make a big difference for your top line.

Author Bio:
Bonnie Stefanick is the Search Marketing Manager at Internet Marketing Ninjas. Internet Marketing Ninjas is a full service Internet marketing company, specializing in link development since 1999 and based in Clifton Park, NY.