Funnel
Definition
The path a customer takes from initial awareness to final purchase.
Example Use Case
A B2B software company analyzes its free trial-to-paid conversion rates to optimize its sales funnel.
A funnel describes the sequence of steps someone passes through on the way to becoming a customer — typically awareness, interest, consideration, and purchase, with retention beyond that. Because each stage loses people, the shape narrows, and the useful question is always where the largest drop occurs.
Its value is diagnostic. Measuring conversion between each pair of stages localises the problem: plenty of interest but few enquiries points at the offer, while many enquiries but few sales points at qualification or follow-up. Without that structure, a single blended conversion rate tells you something is wrong but not what.
Stage definitions need to be concrete to be useful. “Awareness” measured as impressions and “consideration” measured as site visits are different units, so the funnel should be built from events you actually track. A funnel is a model, not a description of how people really behave — real journeys loop back, pause for weeks, and arrive through several channels at once.
