PRODUCTHEAD: Conversion funnel analysis — down the rabbit hole

PRODUCTHEAD: Conversion funnel analysis — down the rabbit hole

PRODUCTHEAD is a regular newsletter of product management goodness,
curated by Jock Busuttil.

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Each customer has their own unique journey to and through your product

Conversion funnel analysis with bar charts is a conscious choice to maximise precision over accuracy

Cart abandonment is an opportunity to engage with your users

Conversion rate is a quantitative springboard to qualitative insights

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every PRODUCTHEAD edition is online for you to refer back to


Manage any product for a short period of time and you’ll inevitably start to think about how users discover, start using and stop using your product. In broad terms, this is a customer journey. But, for varied reasons, not everyone who starts the journey completes it. Understanding where you’re losing people, in what quantities and why they give up can be a valuable form of product analysis. This is sometimes known as conversion funnel analysis.

An ongoing relationship #

Many products have some kind of subscription element to them. In a subscription model, your users’ relationship with your product is ongoing, rather than a simple, one-off task. If your product has a subscription element to it, then you’ll probably also be thinking about how much your users pay you over the course of their relationship with your product, and how much it costs you to bring them onboard and to deliver that service to them.

In simple terms, you want to make sure that your product makes more money from users than it costs to acquire them and to deliver the service itself.

Different goals for conversion #

Conversion funnels are most often associated with a customer journey that ends with the user making a purchase from your company. This is the point at which your company derives some tangible value from the user in return for some product or service.

However, conversion funnels don’t have to be solely about making money. When looking at the customer journey from the users’ perspective, they’re using your product or service to achieve a particular goal. Seeing where people fall by the wayside helps you identify bottlenecks, points of frustration and dead-ends in your product. Once you understand why these problems are happening, you can find ways to alleviate them — all with the goal of helping users succeed.

Quantitative and qualitative analysis #

There are plenty of conversion funnel analysis tools and conversion rate optimisation techniques. Many focus on the quantitative analysis. They tell you how many (or what proportion) of your users make it through each subsequent stage of the customer journey.

You’re never going to have 100% clarity about your users’ journeys to, through and from your product. Tracking users is only becoming more contentious and difficult to do as users become more conscious of their privacy.

Some tools also help you investigate why drop-offs are happening (qualitative analysis) through on-the-spot customer satisfaction surveys. Often the most effective approach is simply to talk to a sample of the people you’re losing to find out the main reasons why. Then with that information, you can try out a few experiments to see whether you understand the cause of the behaviour sufficiently well to attempt to change it.

Non-linear customer journeys #

Visualising the SaaS business - Lean Analytics (Credit: Alistair Croll and Ben Yoskovitz)
Mapping out the customer journey for a typical SaaS business, from Lean Analytics by Alistair Croll and Ben Yoskovitz

Conversion funnels are often portrayed as being linear journeys, but the reality is that a customer’s actual journey is typically more convoluted. They loop back on themselves, repeat actions, get things wrong, go away for a bit and come back again. They might even begin their journey on another site entirely depending on how search engines show your content, how you advertise, and where people discuss your product.

For you this week #

If you’re unfamiliar with conversion funnel analysis and visualisation techniques, this week I’ve pulled together some articles that describe the main concepts and challenges for you.

Some of the articles are written by companies selling analytics tools who understandably have a vested interest in converting you to customers.

As is always the case on PRODUCTHEAD, I have no affiliations with any of these companies and receive nothing in return for including their articles. They just happened to be the most informative articles I’ve come across.

Speak to you soon,


what to think about this week

How to optimize your ecommerce conversion funnel: the new rules for the nonlinear customer journey

Despite all the time you’ve spent perfecting your conversion funnel, visitors still aren’t converting. You’ve invested in your site’s design and navigation, you’ve increased your marketing efforts, and you’re following all the ‘best practices’ for conversion optimization.

But if you don’t understand how real customers shop online, you’re missing an opportunity to optimize your ecommerce conversion funnel to reflect each visitor’s unique customer journey.

Real customer journeys aren’t linear


We live in a world of funnels

You think you’re reading an essay. You’re not. You’re moving through a funnel. This shouldn’t surprise you. You’ve been moving through funnels all day. This funnel is a pretty simple one. You ended up on Medium somehow, you got to this essay, you’ve read this far. Those are all steps on this funnel.

Precision and accuracy are competing goals in data visualisation

[Elijah Meeks / Medium]

How we saved our funnel drop-offs after they happened

One of the biggest problems for e-commerce, demonstrated by about 74% of users worldwide, is cart abandonment. It means three out of every four shoppers in your online store walk away AFTER they’ve put their items in the cart. If you’ve ever tried to deal with cart abandonment, you might find our story interesting — we brought back 11% of our checkout drop-offs to successfully complete their purchases.

A drop-off is not the bitter end, but a new branch out of the funnel

[Eran Kaspin / Mind The Product]

Why your conversion rate doesn’t tell you everything

Let’s take three product teams:

Team A ignores conversion metrics and focuses only on KPIs related to active users (MAU and DAU), retention (CRR), and customer satisfaction (CSAT).

Team B is fixated on product conversion rates, using the numbers as a North Star for understanding features or pages that trigger or block user actions.

Team C pays close attention to conversion rates, but as a springboard for diving deeper, getting inside users’ heads, and understanding why they do or don’t take actions that lead to conversions.

There’s a clear winner here.

Understand what users are doing and why they’re doing it


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PRODUCTHEAD is a newsletter for product people of all varieties, and is lovingly crafted from a sudden drop-off in state-run childcare.

Read more from Jock

The Practitioner's Guide to Product Management book cover

The Practitioner's Guide To Product Management

by Jock Busuttil

“This is a great book for Product Managers or those considering a career in Product Management.”

— Lyndsay Denton

Jock Busuttil is a product management and leadership coach, product leader and author. He has spent over two decades working with technology companies to improve their product management practices, from startups to multinationals. In 2012 Jock founded Product People Limited, which provides product management consultancy, coaching and training. Its clients include BBC, University of Cambridge, Ometria, Prolific and the UK’s Ministry of Justice and Government Digital Service (GDS). Jock holds a master’s degree in Classics from the University of Cambridge. He is the author of the popular book The Practitioner’s Guide To Product Management, which was published in January 2015 by Grand Central Publishing in the US and Piatkus in the UK. He writes the blog I Manage Products and weekly product management newsletter PRODUCTHEAD. You can find him on Mastodon, X (formerly Twitter) and LinkedIn.

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