Funnels

What do journalistic investigation, dating, sales, and hiring have in common? Each of them are funnels towards insight, partner, customer, and employee respectively. This same concept can be expanded to value generating outcomes like Conversion, Retention, Ad Click, etc.

A funnel is a series of events or actions that customers need to take leading up to a value generating outcome. You start broadly (Top of the Funnel) and then increasingly narrow down into what you want.

Why it matters: A funnel models reality and exposes steps in the funnel that need to be optimized.

How do you know it is good?

• Funnel conversion rate benchmarks vary based on geographies, product categories, and industries. Always be on the lookout for openly available benchmarks like here and here.
• For ease of analysis, use Segmentation to simplify multi-path funnels into single-path lines.

Optimizing funnels:

Actively use A/B Testing or Multi-armed Bandit to optimize your funnels:

• Increase Top of the Funnel but that costs money
• Change the user experience to drop drop-offs
• Use Propensity Modeling to provide Discounts and Promotions, etc. at the right spots
• Drop steps in the funnel much like Amazon’s one-click purchase

Build and maintain an Audience Funnel