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Funnels: Forking Funnels

This is part 4 of a 5 part series on Funnels.

Up until now, we’ve treated funnels like a straight line. A customer takes a series of actions that lead to a preferred result, and you are just measuring how well you convert them through that series of actions.

Funnel Fork 1However, in the real world funnels are rarely straight lines. In fact, in many cases you’ll have a series of funnels that convert into similar actions. Back to our previous example, it’s much more likely to look like the following:

Funnel Fork 2

There are two obvious problems posed by forked funnels. First, it’s impossible to tell how the interactions of the funnels may affect the end results. What if the conversion rate of credit card purchases are different for users clicking on ads compared with users clicking from emails? Second, it becomes difficult to optimize any single funnel by itself. If you improve the credit card interface, more users may opt to use that than Paypal, affecting a different fork.

How do we unfork our funnels? Segmentation.

You need to be able to tag you users with all of the relevant steps of their funnel so that you can decompose the forked funnels into individual funnels. The above forking example can be turned into a few different flat funnels if you segment your users by acquisition source (ad, email) and purchase method (credit card, Paypal). This creates four different segments which complete four different funnels:

Funnel Fork 3

Because we’re segmenting customers by these variables, there will never be any forking in a given customer segment’s experience. Now you can apply all of the standard funnel analysis techniques to optimize your funnels! Even better, because you now know the size of each segment, you can determine which of these funnels is even worth optimizing. Only a few email users might use Paypal, so it might not be worth optimizing the email to Paypal flow.

Since it might be tough to know ahead of time which funnel forks are important you can be proactive by ensuring that you tag all of your users with every action in the funnel so you can do this segmentation if and when you need it.

Quote of the Day: “When you come to the fork in the road, take it!” – Yogi Berra


The Funnels series