Introducing the Funnel

This is first in a multi-part series on the eCom Funnel

I use a funnel to pour iced coffee into my IKEA glass swing top bottles so I can take it to work.  Usually I still make a mess, but without the funnel it would be way worse.  I realize that for some people this is eliciting a Liz Lemon level eye-roll because you know this article is actually about a different kind of funnel—one that we talk about all the time.  Nonetheless, I think it still pays to begin by defining a funnel (the non-eye rolling readers will appreciate it).  Technically when we talk about a funnel we are talking about a conversion funnel.  The conversion funnel is all the steps in the journey from innocent bystander to adoring customer.  Let me elaborate.

First, what’s conversion?  Withhold your eye-rolling on this one.  Conversion is not necessarily the user making a purchase.  Conversion is the goal of a user flow.  Usually conversion is shorthand for the user making a purchase (the raison d'être of eCommerce), but in different context that is not always your goal.  If I am working on a registration flow when I talk about conversion I am talking about people successfully creating an account.  We have not made any money, but we have a achieved a goal that in the larger picture contributes to revenue (this abstraction is covered more thoroughly in the next article).  Conversion is contextual.

There are in an infinite number of possible steps in the journey, so the funnel is really of our own making.  Your funnel can look slightly different depending on how amazing (or lackluster) your analytics setup is, or how intimately you are acquainted with your users.  I will focus on the funnel that I regard as eCom Funnel Classic.  Of course you can get more intricate than this, but since this is introductory we should start with the basics.  The eCom funnel is as follows:

  1.  Have a Session
  2. View a Product
  3. Add a Product to Cart
  4. Start Checkout
  5. Complete Checkout

Boom.  Five easy steps and we're making money.  How could this eCommerce thing be so hard?  So now you know the funnel is a journey to a goal and we sub-divide the journey into steps.  The steps are subjective, but above is a common outline.  

To close this section, I will be explicit about where the reference to funnels comes from.  First, funnels are used to pour things (in one end out the other).  Similarly, the five steps I described are linear in aggregate.  You certainly can view a product after you add a product to your cart, but you cannot complete checkout if you don’t start checkout.  Likewise, you cannot start checkout if you never added anything to your cart.  Finally, you cannot add a product to the cart unless you see the product.  The is a good example to also highlight that there is not necessarily one way to complete each step in the funnel and proceed to the next.  Viewing a product can take multiple forms (a quickshop or a visit to a detail page).  The steps in the funnel are buckets of analogous actions.  The mechanics of how you can shop on your site governs how you define what gets included in each of these steps.  Of course you will also at some point want to do a deep dive into these individual paths, but that is a topic for a more in-depth funnel analysis.  

Second, a funnel is large at the top and small at the bottom.  Once you can ascribe a number of users who make it to each step in the funnel you will see that the numbers get smaller and smaller with each step.  People wander off along the way for various reasons; reasons lots of people—myself included—spend their careers fretting over.  There is a skosh of irony in that the purpose of a funnel is expressly to prevent losing fluid along the way, but you can take it to mean that the funnel is an aspirational model.  So in short, we are talking about a linear flow that starts large and gets smaller ultimately resulting in a bottle full delicious iced coffee. 

eCom Fan Fiction