Funnel Report Walkthrough

The Funnel Report is often your best shot for answering those “nice-to-know” questions that come up in your business. This is especially true for questions related to customer journeys.

The report captures two types of queries:

  • How many customers who did A went on to do B and then C?
  • How many customers did any combination of W, X, Y, and Z?

For example:

  • How many customers ordered a sample product on their first order, then signed up for my loyalty program, and then bought a subscription product?
  • How many customers bought a T-shirt, a pair of jeans and a hat in any order?

But the Funnel report doesn’t just answer the result of how many customers completed all steps. It gives you insight into every stage of the journey. Which customers only made it halfway? How long does it take an average customer to move between steps? Where is friction the highest?

These are “nice-to-know” questions because the answers reveal better ways of guiding your customers toward the desired outcomes at the ends of your funnels.

This walkthrough will cover best practices for leveraging the report to make these insights about the customer journeys most relevant to your business.

What are "funnels" and what can I learn from them?

A funnel (or "flow") is any sequence of steps through which you're trying to lead new or prospective customers toward a desired outcome. Funnels can have any number of steps, and you can require that they be completed in strict sequence or in any sequence. You can define each step however you'd like.

At any one time, your business will have customers at different stages of your funnel. Successively fewer customers will complete each step, and it's likely that only a small percentage of your starting customer base will progress all the way through your flow.

What can you learn by analyzing your funnels?

  • Which steps of your funnel have the highest drop-off rates? What can you do to prevent churn at these bottlenecks?
  • Which steps of your funnel have the longest average time to convert? How can you reduce friction between steps?
  • What do your most "successful" customers have in common? How can you find more customers that share these traits?
  • Which of your customers are least likely to progress through your funnels?
  • Are changes you're making to your business improving the rate at which customers progress through your funnels?

Getting started

Accessing your report

To generate a funnel report in Lifetimely, start by finding your Funnel report in the "Customer Behavior" section of your sidebar menu.

You can also access the report with this link: https://app.lifetimely.io/funnel.

Report layout

The Funnel report consists of two major sections:

  • Top section: this is where you adjust the report parameters to define the funnel you want to analyze.
  • Bottom section: this is where you view the results of the report. You'll notice the data update automatically whenever you toggle any of the report settings.

Creating your funnel

To build your funnel, let's focus only on the top section of the report. You'll see the results in the bottom section update as you change the report settings, but this can be safely ignored until you've finished defining your funnel.

There are four major factors to consider when defining your funnel: time period, customers, sequence, and steps.

1
TIME PERIOD: What date range do you want to analyze?

By default, the report factors in orders from the last six months. You can adjust this by clicking on the "Time period" field and either choosing a pre-set option or selecting a custom date range.

💡 Tip: A shorter date range will give you more current data, but be sure to allow enough time for some percentage of your customers to flow completely through your funnel. The more steps in your funnel (and the less likely they are to be completed), the more you should consider expanding the time period to loop in a greater sample size of customers.
2
CUSTOMERS: Which customers specifically do I want to learn about?

On the right side of the "Funnel definition" section, you'll see a drop-down menu to select new customers vs all customers, and next to it is a button for adding filters.

  • New customers vs All customers
    • Selecting "New customers" will only pull in customers who are new as of the selected time period. Any customer who placed at least one order before the start of the time period will be excluded from the report even if they match other funnel criteria.
    • Selecting "All customers" will include any new or existing customers who complete any steps of the funnel during the selected time period.
  • Filters - Customer tag, Country, and State are all available as filters. You can use filters inclusively or exclusively.

    To add a filter:

    1. Click "+ Add filter"
    2. By default, a Customer Tag filter will appear below. To apply a different filter, just click "Customer Tag" and you'll see your other available options.
    3. Click "=" to either include or exclude customers matching the criteria that match the filtering rule you're about to set. Options are:
      1. = equals : Include customers who match the statement, and exclude all others.
      2. ≠ doesn't equal : Exclude customers who match the statement, and include all others.
      3. **contains : This option is useful for the Customer Tag. It will pull in any customers with a tag that contains the string of text you provide, and exclude all others.
      4. **doesn't contain :  This option will do the opposite - it will exclude any customers with a tag that contains the string of text you provide.
    4. Click "Select values..." to define the filter.
    5. Click "+ Add filter" to add another filter. You can add as many filters as you like
⚠️ Note 1: The funnel report doesn't include orders that have been refunded. This may cause comparisons with other reports to be slightly different. In example, comparing the number of customers in a given cohort with an order tag with the number of orders placed with that tag in a given sequence, may render a slightly lower number of customers (if there were refunded orders). 
3
SEQUENCE: Does my funnel require steps to be completed in strict sequence, or should any sequence be allowed?
  • If you choose "Strict Sequence", the report will only show customers who complete the steps of your funnel in the order you've designated.
⚠️ Note 1: If you've chosen both "Strict sequence" and "New customers" only, then Step 1 of your funnel must be the customer's first-ever order for the customer to be included in the report.
⚠️ Note 2: A customer will still count as converting even if they make additional purchases in between steps of your funnel. For example, if they place an order between Step 1 and Step 2, they will count as converting even though Step 2 wasn't their second order.
  • If you choose "Any sequence", the report will count the number of customers who have completed one or more of the steps of your funnel regardless of order.
💡 Tip: It may help to go through a few examples in the Report Logic and Examples section below to make sure you understand which customers will and won't be included in your report based on the settings you choose.
4
STEPS: What are the steps of my funnel?

Steps must be order-based. This means that each step of the funnel must describe an order, i.e. "An order was placed matching X criteria."

You can use filters to set this criteria. If you don't apply any filters to a step, then any order (or any sequential order if you require a strict sequence) will count as a customer conversion. <GIF

To define a step:

  1. Click "+ Add filter" next to the order
  2. You'll see a new line that reads "where Product = Select values...". Note that "Product", "=" and "Select values..." are all separate blue buttons.
  3. Click "Product" to select a filter category. Options are:
    1. SKU
    2. Product
    3. Product Type
    4. Product Variant
    5. Order tag
    6. Discount code
    7. Sales channel
    8. Order Value
  4. Click "=" to either include or exclude customers matching the criteria that match the filtering rule you're about to set. Options are:
    1. = equals : Include customers who match the statement, and exclude all others.
    2. ≠ doesn't equal : Exclude customers who match the statement, and include all others.
    3. **contains : This option is useful for the Order Tags and Discount Codes. It will pull in any customers with a tag/code that contains the string of text you provide, and exclude all others.
    4. **doesn't contain :  This option will do the opposite - it will exclude any customers with a tag that contains the string of text you provide.
  5. Click "Select values..." to define the filter.
  6. To further refine this step, you can add another filter by clicking "+ Add filter" again. You can add as many filters as you'd like.

Repeat the process for all steps of your funnel. To add more steps, just click "+ Add funnel step". You can add as many steps as you like.

By the time you've finished adjusting the settings to match your funnel, the results of the report should already be on display in the bottom section of the report. Let's look at how to analyze your results.

Report logic and examples

👉 Example 1: You've chosen " Strict sequence" and " New customers" only. Step 1 of your funnel is an order that includes a pair of jeans, and Step 2 of your funnel is an order that includes a hat. Which of these customers will count as converting?
  • Customer A orders a pair of jeans, then a T-shirt, then socks, then a hat
  • Customer B orders socks, then a pair of jeans, then a hat
  • Customer C orders a pair of jeans and a hat in the same purchase, then orders another hat

Answer:

  • Customer A is included because Step 1 (jeans) came before Step 2 (hat), even though there were orders in between
  • Customer B is not included because by the time Step 1 (jeans) occurred, they were not a new customer
  • Customer C is included because Step 1 (jeans) came before Step 2 (hat), even though Step 1 also matches Step 2 criteria
👉 Example 2: You've chosen " Strict sequence" and " All customers". Step 1 of your funnel is an order that includes a pair of jeans, and Step 2 of your funnel is an order that includes a hat. Which of these customers will count as converting?
  • Customer A orders socks, then a pair of jeans, then a hat
  • Customer B orders a hat, then a pair of jeans, then another hat

Answer:

  • Customer A is included even though Step 1 (jeans) wasn't their first order, because the report considers pre-existing customers in addition to new customers
  • Customer B is included because Step 1 (jeans) and Step 2 (hat) occurred in sequence, even though a hat was purchased in the past prior to the first jeans purchase
👉 Example 3: You've chosen " Any sequence" and " New customers" only. Step 1 of your funnel is an order that includes a pair of jeans, Step 2 is an order that includes a hat, and Step 3 is an order that includes a t-shirt. Which of these customers count as converting?
  • Customer A orders a T-shirt, then socks, then a pair of jeans
  • Customer B orders socks, then a hat

Answer:

  • Customer A is included and will show as having completed 2 out of 3 steps
  • Customer B is included and will show as having completed 1 out of 3 steps as long as their first ever order (socks) fell within the selected time range, even though first order wasn't one of the steps of the funnel

Analyzing your results

Now that you know how to build your funnel and understand the nuances of which customers will or won't be included based on your settings, let's move on to the results of the report.

The results are provided in both chart and table format. The data is presented a bit differently depending on if your funnel requires "Strict sequence" or "Any sequence".

Report results - Strict sequence

Below are sample results for a three-step funnel that requires steps to be completed in strict sequence:

The chart lets you know:

  • How many customers completed each step, and how many customers dropped off between each step
  • The average number of days it took converting customers to progress from one step to another
    • In this example, among the 48 customers in the funnel who completed Step 2, it took an average of 44 days to convert. Among the 20 customers who went on to complete Step 3, on average it took another 38 days. The average total time to complete all steps was 82 days, which you see in the far right column of the report.
  • The conversion rate for each successive step
    • Note that the first step will always be 100%, because customers who don't meet first step criteria are excluded from the report
    • In this example, 15% of the 311 customers who completed Step 1 also completed Step 2, and 6% of those 311 customers also completed Step 3
    • The funnel conversion rate metric you see in the far right column is the average unweighted total conversion rate across all steps

The table presents mostly the same data, but in a different format.

One thing to note is the difference between the "Total conversion %" and "Previous conversion %" columns:

  • Total conversion %: The percentage of customers in the entire funnel who have completed a given step. In this example, 6% of the 311 customers in the funnel converted all the way through Step 3.
  • Prev. conversion %: The percentage of customers who have completed a given step among customers who completed the previous step. In this example, 42% of the 48 customers who completed Step 2 also completed Step 3.

Report results - Any sequence

Below are sample results for a four-step funnel that allows steps to be completed in any sequence:

The chart lets you know:

  • How many customers completed (at least) any number of steps
    • The report shows how many of your customers completed any number of steps regardless of which steps were completed. For example, a customer who completed Step 1 and Step 2 and a customer who completed Step 3 and Step 4 will both count as having completed 2 steps.
    • Customers are counted in all columns up to and including the column matching the number of steps they've completed. For example, referring to the chart above, the same 355 customers who completed all 4 steps are counted among the 1504 customers who completed at least 3 steps, the 3857 customers who completed at least 2 steps, and the 5518 customers who completed at least 1 step.
  • The conversion rate of customers completing an additional step
    • Again, note that the first step will always be 100%, because customers who don't complete at least one step are excluded from the report, and by definition, any customer who has completed multiple steps has also completed at least one step.
    • In this example, among all customers who completed at least 1 step, 6% completed 4 steps. On average, 35% fewer customers complete each additional step.

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