The complete guide to funnels

Every potential customer is on a journey. While you may want them to go straight from awareness (the moment they learn about your brand) to conversion (the moment they become a loyal paying customer), it’s rarely that simple. Instead, they need to be nurtured, guided, and convinced at crucial moments of the journey before they arrive at that final destination.

In digital marketing and sales, these journeys are represented as funnels. 

This post walks you through the fundamentals of funnels: what they are, why they matter, and how to use them to improve your conversion rate and customer experience.

What are funnels?

A funnel is a visual representation of the journey a prospective customer takes as they progress along the steps from initial awareness to conversion. There are various types of funnels (more on that later), but they’re all used to map and guide users through predefined stages and nurture them from prospects to customers.

How does a funnel work?

Funnels can have multiple stages and touchpoints, but in its simplest form, a funnel has 3 key stages: top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU).

Alt text: Graphic illustration showing the 3 funnel stages, with conversion at the bottom of the funnel graphic, consideration in the middle, and awareness at the top.

As prospects progress through the funnel, the number of people at each stage decreases.

This narrowing is expected—not everyone who’s aware of your brand will become a customer—but it’s important to carefully track and analyze your funnels to spot any increase in drop-offs that aren’t expected. This also lets you continually improve your funnels for conversion rate optimization (CRO).

But, knowing how many people are at each stage of the funnel isn’t enough if you don’t know how to improve each stage. This is where a funnel tool becomes useful.

Using the right tool—one that doesn’t just show you where users are dropping off but also reveals why—allows you to connect the dots between your numbers and the behavior behind them. 

This lets you quickly find and fix conversion pitfalls anywhere in your funnel, so you can make data-driven, customer-centric changes that lead to more conversions.

💡Pro tip: it’s up to you how you choose to define the important steps a user needs to take as they progress through your funnels. A great place to start is to use your ideal customer journey map as your ‘golden path’.

A tool like Contentsquare’s Funnels shows you exactly which actions your users are (and aren’t) taking based on this ideal journey so you can course-correct, if necessary. 

Analysis from Contentsquare’s Funnels showing the percentage of traffic that moves along each page in the funnel

3 reasons to use funnels

Whether you’re using funnels for marketing or sales, mapping your user journey makes it easier to understand what’s working—and what’s not.

Here are 3 major benefits of using funnels.

Improve conversions

Use funnels to understand which tactics drive results and which ones need improvement. Then, learn from your highest-converting flows and replicate your winning formula to increase conversion rates.

For example, if you notice that flows with fewer steps yield higher conversion rates, you could try reducing the number of steps in low-performing flows to positively impact conversions.

📈 Metrics boosted: revenue, conversion rate

Identify (and fix) issues

Combine funnels with experience analytics tools like Session Replay and Heatmaps to get a deeper understanding of user behavior and uncover issues affecting conversions. This allows you to see where users drop off, spot UX issues in moments, and quickly make fixes.

For example, maybe users want to convert and make that purchase—but an unclickable button makes it impossible to do so. 

By contextualizing the drop-off rate in your funnel with recordings showing users’ rage clicks (repeated clicking on certain areas or elements over a short period of time), you can spot blockers and prioritize impactful fixes.

📈 Metrics boosted: customer satisfaction, conversion rate, revenue

Understand your users

Get valuable data about how real users progress through your funnels, and apply filters and create segments to compare conversion rates. Use this detailed information to create more personalized customer journeys that resonate with different user cohorts—and deliver better experiences.

For example, your funnel analysis could reveal that users coming from social media channels need more time before they’re ready to convert. In this case, you could add an extra step to the flow for users who come from lower-converting channels, giving you an extra opportunity to build trust and persuade them.    

📈 Metrics boosted: conversion rate, revenue, customer satisfaction, retention

🔥 If you’re using Contentsquare

Combine Funnels with other Contentsquare capabilities for a complete picture of customer behavior and sentiment, so you can identify actions and understand what drives them. 

Contentsquare empowers you to

1. Bring your funnels to life and visualize real user behavior with Session Replay and Heatmaps. Watch as users navigate your site and progress through your funnel (spotting any issues along the way)

2. Complement your quantitative data (such as drop-off and conversion rates) with qualitative data from Surveys and Interviews via Contentsquare’s Voice of Customer to understand how people feel, and why they didn’t convert

3. Dig deep into filters and segments and use comparisons across funnel views to understand how different factors—such as A/B tests, device type, or traffic channel—impact conversion, so you can make more informed decisions

Contentsquare’s Funnels makes it easy to compare different segments within your funnels

4 different types of funnels (and how to use them)

Every business tracks multiple customer journeys, and you can create just as many funnels. There are lots of impactful ways to use funnels at every stage of the customer lifecycle, from marketing to engagement and beyond.

Here are some examples of common funnels to get you started.

1. Marketing funnel

A marketing funnel aims to generate leads by attracting, engaging, and converting prospects.

Some marketing funnels use the AIDA—Awareness, Interest, Desire, and Action—model, but our friends TOFU, MOFU, and BOFU work just as well here. Tactics used at different stages of the marketing funnel include email marketing, content strategy, and search engine optimization (SEO).

It’s important to note that the final bottom-of-the-funnel ‘conversion’ goal of a marketing funnel doesn’t have to be a purchase. It may be another call to action, such as signing up for a webinar, downloading a gated piece of content, or signing up for a free trial, all of which bring the prospective customer into the sales cycle—and potentially a whole new funnel.

Example of a marketing funnel in action

• Awareness (TOFU): use social media posts and an SEO content marketing strategy to build brand awareness with your target audience

• Consideration (MOFU): share case studies or customer testimonials that detail the specific benefits your customers have gained from using your product

• Conversion (BOFU): guide customers to sign up for a gated piece of content, such as a white paper, to capture their information and turn them into new leads

📈 KPIs to measure: cost per acquisition (CPA), customer lifetime value (LTV), conversion rates, conversion rate per marketing channel

2. Sales funnel

A sales funnel aims to convert leads into sales by nurturing prospects until they become paying customers.

While both marketing and sales funnels are designed to guide people from initial awareness to paying customers, the main difference between these funnels is in how the conversion stage is defined. Sales funnels are specifically designed to turn leads into paying customers, so the conversion stage of the sales funnel should reflect that.

Example of a sales funnel in action

• Awareness (TOFU): share informative content about common pain points that are relevant to your target personas

• Consideration (MOFU): use personalized email marketing campaigns to nurture leads and address any blockers

• Conversion (BOFU): schedule a demo with your sales team and incentivize a purchase by offering a discount

📈 KPIs to measure: cost per acquisition, lead generation, conversion rates, average order value (AOV)

3. Click funnel

A click funnel aims to guide users to a conversion event by providing a targeted customer journey that gets narrower as it goes on.

Click funnels are often used in conjunction with landing pages. Once a user arrives on your landing page, they generally have a limited number of ‘next steps’. 

For example, your page might have fewer clickable elements to prevent users from navigating to unrelated pages, making it easier to direct them to the point of conversion. 

As with marketing funnels—and unlike sales funnels—this conversion isn’t necessarily a purchase. For example:

1. A user arrives on a landing page for a subscription service where the only call to action (CTA) on the page is an email address sign-up 

2. The user enters their email address and is taken through to a sign-up flow, where a series of landing pages request more information to create an account. All necessary information, such as pricing, is included on these pages

3. Each page takes the user further along the subscription process, until they have successfully signed up (converted)

Example of a click funnel in action

• Awareness (TOFU): create paid ads that capture interest and drive visitors to a specific landing page

• Consideration (MOFU): include frequently asked questions (FAQs) and customer testimonials on your landing pages to proactively address concerns and build trust without requiring visitors to exit the click funnel

• Conversion (BOFU): promote add-ons or special offers directly on the landing pages in your click funnel to increase the likelihood of conversion

📈 KPIs to measure: click-through rates for paid ads, landing page traffic, drop-off rates, conversion rates

4. Ecommerce conversion funnel

An ecommerce conversion funnel aims to turn site visitors into customers by guiding them from their first visit towards making a purchase.

Ecommerce funnels can be tricky because most modern ecommerce customer journeys are nonlinear. Some people will make a purchase the very first time they see your product, while others will follow your brand on social media for months before they click ‘Add to cart’. This means you have to find strategic ways to engage (and re-engage) customers at every stage of the buying process.

Example of an ecommerce conversion funnel in action

• Awareness (TOFU): promote your product in channels your target audience engages with, such as social media or podcast ads

• Consideration (MOFU): highlight FAQs, customer testimonials, and user-generated content (USG) via social media and email marketing campaigns

• Conversion (BOFU): use sales, discount codes, and cart abandonment emails to encourage customers to make a purchase

📈 KPIs to measure: engagement with marketing campaigns, cart abandonment rate, conversion rates, conversion rate per marketing channel, cost per acquisition

Make and analyze funnels

Regardless of the types of funnels you’re creating, having the right tool to map them out and analyze them is crucial to boosting their effectiveness. 

With Contentsquare (hello! 👋), it’s easy to build and analyze all types of funnels that give you the information you need to optimize user journeys.

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