What Is Funnel Conversion Rate? What To Know + How To Improve Yours

What is funnel conversion rate?

A funnel conversion rate is the percentage of users who complete a specific action or set of actions along a marketing or sales funnel.

Your marketing or sales funnel visually depicts a customer’s journey through your buying process. It also helps you see where customers get stuck and where they convert. Knowing how many customers convert — and what path they took to get there — will help you improve your marketing efforts and grow your business.

This post will break down the basics of funnel conversion rate, including the following sections: 

• What is funnel conversion rate? 
• What does funnel conversion rate measure? 
• Why does funnel conversion rate matter? 
• How to measure funnel conversion rate
• What should my funnel conversion rate be?
• How to improve your funnel conversion rate

Read on to learn more! And, if you want more marketing tips and tricks delivered to your inbox, sign up for our email newsletter below! 

What is funnel conversion rate?

A funnel conversion rate is the percentage of users who complete a specific action or set of actions along a marketing or sales funnel.

What does the funnel conversion rate measure?

Funnel conversion rate is a key performance indicator (KPI) that measures the percentage of users completing a desired action at specific points in the buyer’s journey. These actions move them toward an established macro-conversion, such as making a purchase. This formula can also include micro-conversions, like convincing your prospect to provide contact information, open an email, or click on your ad.

Generally, conversions correspond to a particular funnel stage — awareness, interest, desire, and action. You can measure your success at each stage by tracking the percentage of users who complete the requested action. 

Why does the funnel conversion rate matter?

Your funnel conversion rate helps you assess the effectiveness of your marketing, user experience, and sales approaches by revealing opportunities to optimize your efforts. Tracking your funnel conversion rate provides you with meaningful, actionable insights to:

• Spot bottlenecks: A high conversion rate at the awareness stage becomes less impressive if leads stagnate there. This pattern can indicate issues like inefficient sales practices, bad design, or poor calls to action (CTAs).  Further investigation can help determine the precise causes so you can develop solutions.
• Identify improvement opportunities: Similarly, analyzing your conversion rate across touchpoints helps you uncover areas where you can improve your efforts. For example, a significant drop-off during a specific stage may show that your website is missing the mark with visitors and needs tweaking.
• Make data-driven decisions: Measuring your conversion rate takes the guesswork out of knowing what’s working and what’s not. You have precise information about the success of strategies like customer segmentation and pay-per-click advertising. You’ll also get data-based feedback on the effectiveness of any adjustments you make.

How to measure your funnel conversion rate

So, now you know what a funnel conversion is and why it’s crucial to your efforts. Let’s learn how to measure it by digging into your analytics.

The formula for funnel conversion rate is: 

(Number of users who completed the desired action) / (Total number of users who entered the funnel) x 100

First, determine the different conversion points along your funnel and align them with the appropriate stage. Then, identify how many users came in and how many completed the steps you wanted them to take. 

Divide the number of users who visited your site by the number of users who took the next step, then multiply the result by 100. 

For example, suppose you use content marketing as part of your lead generation strategies. If 500 users visited your page for a gated piece of content, and 20 provided their contact information for a free download, your funnel conversion rate for this touchpoint is 4%. 

Here’s the calculation:

(20500) 100 = 4%

You can complete this calculation for each conversion in your buyer’s journey to gauge success at each step in the conversion funnel.

What should my funnel conversion rate be?

While the average conversion rate generally falls around 3%, your percentage can differ based on factors like your industry and the user’s stage in the purchasing process. Some additional investigation into norms within your sector will help you benchmark your performance against the competition.

How can I improve my funnel conversion rate?

Here are the top 6 ways to improve your funnel conversion rate: 

1. Set up tracking correctly
2. Use remarketing
3. Optimize your CTAs
4. Test your strategies
5. Grow your organic traffic
6. Invest in conversion rate optimization (CRO)

Let’s go over each below!

1. Set up your tracking correctly

Programs like Google Analytics 4 form the foundation for accurately tracking your conversions. Ensure you’ve set up the program correctly to get the most value from your data. That can get more complex when you’re tracking conversions across multiple channels.

Here’s what a typical report for key events in GA4 will look like: 

Note that the conversions are labeled as “Key Events” in GA4.

Verify your tracking works correctly, and test your setup by acting as a site visitor and executing a desired action. If the stats don’t appear as expected in your analytics, you may need to adjust the events within GA4.

2. Use remarketing

Remarketing is retargeting those who’ve visited your site without converting. With the phasing out of third-party data, you must find ways to learn about your audience without cookies. One way to do so is collecting personal information where you can and communicating with users that way. 

For example, if a user signs into your site and saves products to their cart without purchasing, you can send them a reminder email about what they left behind: 

3. Optimize your CTAs

Another way to improve your funnel conversion rate is to optimize your CTAs. Here is a short list of ways to do so:

• Use buttons with clear, specific text
• Be precise with what users can expect from links
• Keep forms short and easy to fill out
• Don’t ask for more information than necessary
• Make your checkout process easier
• Place your CTAs higher on the page

Your goal should be to tell customers what they need to do next, so keep that in mind as you look at your CTAs.

4. Test your strategies

If you aren’t sure what strategy is working best, test it! A/B testing your landing pages, content, and CTAs can help you narrow down options to what consumers like the most. 

You can also ask users directly for feedback regarding your website. Considering their opinions is the best way to ensure that you are providing quality content that converts.

5. Grow your organic traffic

Sometimes, your conversion rate will drop if your overall traffic does. That’s where search engine optimization (SEO) comes into play — people can’t convert on your website if they can’t find it!

Try performing an SEO audit to assess your current SEO and make any necessary changes to improve your rankings and traffic. From there, you can work on leading users through the funnel as they land on your website.

6. Invest in CRO

High drop-off rates at specific points often indicate an issue with an action. CRO tactics involve a focused approach to discovering and eliminating these pain points. Once you identify the issues, you can create a better user experience to help resolve challenges. 

For example, a thorough website redesign can improve page load speeds, implement more user-friendly navigation, or make your website more accessible for users with different abilities. The process also frequently includes methods like A/B testing, good visual design practices, and optimizing your calls to action.

Heighten your funnel conversion rate with WebFX!

Still feeling lost with how to improve your funnel conversion rate? We’re here to help you.

With WebFX, you get access to a full-service, award-winning digital marketing partner with a global footprint. You can boost your conversion rates and bottom lines through custom CRO services that target your website’s weak points.

Learn more about how we can help by requesting a free quote!