The conversion funnel is arguably the most important part of every ecommerce website. It’s where the magic happens: visitors turn into customers.
And yet, as marketers we know all too well, that not all visitors who put a product into their cart end up purchasing.
Just moments away from buying, they end up having second thoughts, getting distracted, or going with your competition.
Queue the dreaded “abandon cart.”
Potential customers fail to buy for a number of reasons, but historically we’ve had to guess as to reason for an abandoned cart.
Fortunately, by using Google Analytics, we can locate where they quit.
Table of contents
- What is funnel analysis?
- Three common goal-tracking issues
- How to perform a funnel analysis
- How to segment your funnel data despite analytics’ handicap
What is funnel analysis?
Funnel analysis is a method of analyzing the different stages in the conversion funnel that visitors go through when visiting your website, in order to turn into customers.
Funnel analyses examine the percentage of users that go through each specific step in the funnel, and are useful for finding and fixing problematic areas in your conversion funnel.
How to spot trouble areas in your Google Analytics funnel
Although the initial setup of your conversion funnel is certainly important, we won’t go into technical details today (you can read more about designing your checkout flow here.)
To start, you first need to create a goal in Google Analytics. When creating a goal for a funnel, it should be a “destination” goal — meaning that you’ll set a specific web page as the goal, and the goal is then achieved when a visitor lands on a specific page.
For most ecommerce businesses, the “Thank You” page or “Order Confirmed” page is typically what defines the end of your funnel process.
Once you’ve setup your destination goal in Google Analytics, you’ll be able to see your Funnel Visualization report, an incredibly useful feature.
Here’s what it might look like:
Before you can get the most out of your Funnel Visualization reports, you must first identify the exact pages that serve as the starting or entry point of your funnel. For most ecommerce sites, product pages will generate most of the entries into the funnel. But there are others:
- Product page, landing page, or recommendation page;
- Cart page;
- Shipping and billing info;
- Confirmation screen;
- Thank you page;
No matter how many entry points you have to your funnel, the rest of the funnel should be like a single-line railroad.
Customers should only be able to initiate the journey through the funnel when and only when, they add a product to the cart. Otherwise, your conversion ratios and Funnel Visualization data will be inaccurate and unhelpful.
Three common goal-tracking issues
1. Technical errors
One of the most common goal-tracking issues happens as the result of a technical issue, such as an invalid link to the final step of your funnel.
A misplaced link, will often lead to a larger number of people in the bottom steps of the funnel compared to the total sum of dropouts and customers who proceeded to the next step.
To solve this problem, identify and eliminate the “backdoor” entry and enable only legitimate customers to get to the goal page.
2. Omitted page in the funnel
Another common issue is when you accidentally omit a page in the funnel and have a step unaccounted for.
Luckily, this mistake should be very easy to spot. Unlike with a technical issue, the sums will not add up, since you will have missed all the potential customers who dropped out on the omitted step.
To fix, simply go through the purchase process yourself and find out which step is missing from Google Analytics. Add it missing step, and like magic the issue should disappear.
3. Payment gateways
One final possible error: You notice buyers drop out at the final step of the conversion funnel, but they return to the “Thank You” page under the same order number.
This often occurs because the website uses a payment gateway (e.g. PayPal), so each time a customer goes to initiate payment, they effectively navigate away from your website to the third-party site. When they complete the payment, they are referred back to your website.
The result? A mess of funnel data, and more generally all of your analytics.
The solution to this issue is simple. In fact, there are two:
- If you’re using a third-party payment system or gateway (such as PayPal that take customers off the site to initiate and complete payment), add the third-party URL to the referral exclusion list.
You can do this in Google Analytics. Go to the Admin tab and open Property Settings. There, open Tracking Info, and you’ll find the referral exclusion list. Fill in the field with the URL you need to exclude (for example, www.paypal.com).
- Use a payment system that integrates into your cart. With this option you have everything on your own site and also preserve the integrity of the data in Google Analytics. You still retain the main advantages of your third-party payment gateway (trust and credibility), while removing the need for your customer to go to some other website to complete the payment.
Before we analyze the funnel further, there is one additional checkpoint to cover. Google Analytics has a report called “Reverse Goal Path.” Once you define your conversion goal and wait a week or two, you can check what pages people open prior to reaching the goal.
If your funnel is structured correctly, there should be no difference between this report and your goal funnel steps. Using this method, you can verify that your funnel includes the pages customers actually open to complete the goal.
How to perform a funnel analysis
Once you set up your funnel, it generally takes a week or two depending on the size of your site before your data becomes available. Ideally, you want to have about a month of data or one well-rounded sales cycle to use as your baseline.
To analyze your funnel, open the Funnel Visualization report in Google Analytics. There you should see something like this:
The funnel visualization represents the visitor’s path from adding the product to the cart to ending with checkout.
That means your visitor needs to complete the following steps:
- Add a product to the cart, and select different options (color, size, etc.)
- Provide their delivery address, contact information, and billing method.
- Validate that the order is correct and initiate payment.
Focusing on these steps allow you to identify any source of friction that may be causing funnel dropouts.
Below is the process I used in my specific case.
Step 1: Address dropout rates from “Add to Cart” to shipping and billing info
The first step of most ecommerce checkout funnels starts with the cart. The visitor adds a product to the cart and then clicks “Proceed to checkout.”
This first step traditionally sees the largest dropout rate of all steps. According to a Baymard study, 69% of all online customers abandon the cart in their first step, just after adding the product.
When a prospect adds a product to the cart, but does not proceed further, it’s called cart abandonment — and it represents a large issue for ecommerce retailers. The same Baymard study also gives the average rate of shopping cart abandonment in ecommerce stores at about 75%.
Given this data, it’s well worth your while to use every tool you can to address cart abandonment.
The problem with this step in the funnel is that you may not know why the customer added the product to the cart. They might be testing the water, checking the shipping price, or may even have added a product by mistake.
Without knowing why they did not proceed with checkout, it’s difficult to reduce your abandoned cart percentage.
In this example, we can see, 1,287 prospects directly exited the funnel.
Why? At this point we can only guess.
However, looking further, we see that 871 prospects exited the funnel to sign in, which indicates a possible problem that can be solved to reduce dropout rates.
By making it unnecessary to leave the funnel to sign in, a percentage of those 871 prospects may have in fact completed their purchase.
Of all the prospects that reached step 2 of the funnel, 38% of completed the entire process. If we can get those 871 people to reach the next step, 330 prospects will be likely complete the entire checkout. With an average order value per customer of $224 USD, this could increase revenue by $74,000 a month.
Three tips for removing dropout rates on Step 1
There are a few general principles that can help you lower your dropout rate:
- Provide all relevant and pertinent information about price, shipping, and other important factors on the product page. You don’t want a potential customer to get a nasty surprise later on.
- When a new visitor adds a product to the cart, consider offering a discount or additional benefit to strengthen their interest, such as free shipping.
- Offer discount codes or some other benefits in exchange for a visitor’s email address. This way, you can contact customers who abandoned the cart and re-engage them through your remarketing efforts.
As Tommy Walker put it in a previous CXL blog post:
““Free Shipping,” “Live Support,” or “Free Return Shipping” are all huge selling points, and could become the deciding factor for lower-cost cart abandoners. Harris Interactive has found that 56% of customers would be willing to switch brands based on better customer service options.
Using a service like Retargeter, you could run a campaign that leverages banner ads, video, and sidebar advertising, that highlights your customer satisfaction policies.
So if a cart abandoner leaves your site to watch a product video on YouTube, or searches a product review on a different blog, you’d be right there clearly demonstrating why your site is the best choice.”
Step 2. Address dropout rates from shipping and billing to confirming transaction
Shipping and billing information represent the first big test of your website’s credibility and trust. Before you can deliver your product to your customer, they need to tell you where to deliver the goods and how they are going to pay.
If your potential customers don’t trust you, giving away sensitive private information, such as home address, phone number, and credit card information may be all but impossible.
This step has a remarkably low dropout rate in our example. Of all the prospects, only 706 left the checkout process, and 343 left the site entirely. This is a good result, and indicates this store has few issues with trust, credibility, or friction at this step.
Aside from privacy and trust issues, you face several other potential hurdles, including payment options, shipping costs, and shipping options.
Payment options (or rather, a lack thereof) are also a frequent cause of friction and cart abandonment. If your only payment option is charging a customer’s credit card directly and you require them to provide all the necessary info, it can be expected that fewer customers will be willing to share that information.
The issue of trust can be resolved in several ways, such as placing reliable trust indicators and seals at appropriate steps of the funnel to foster the prospect’s trust. For example, you might include the Symantec Safe Site seal to show customers that your site is secure from hackers.
The issue of shipping cost is often difficult to overcome, as you may have little flexibility in changing what your shipping providers charge. It’s a constant balance between what you can afford as a business and making your potential customers happy.
Finally, shipping options can be a very large point of friction, as sometimes potential customers will add a product to the cart only to realize that it cannot be delivered to their location in reasonable time or at all.
Studies, such as this one on Practical ECommerce or this one on CXL, have shown that promising short delivery times, same-day shipping, or overnight delivery will increase conversions. There’s a reason why Amazon become one of the biggest online retailers in the world.
Discovering the precise issue at Step 2 is not easy, but something that can help is triggering an exit-intent survey to get some qualitative feedback.
At this step, having a remarketing strategy where you can offer additional benefits is often effective.
Offering things like free shipping, additional items that complement the one the prospect was interested in, and discounts can all help change a prospect’s mind.
Step 3: Address dropout rate at the payment confirmation step
While this step is usually viewed as a mere formality, this is only true if you’ve communicated all the information about the costs, shipping, and other store policies up front.
At this point, the customer should already know the final price tag, delivery time, and other potential qualifiers. If you add additional qualifications for price such as requiring a purchase of some other product to use it or get it delivered at the last second, don’t be surprised if they jet.
We can see that 196 prospects left the checkout here. Although this is an insignificant number, those are still people who were willing to fill out the shipping and billing form, and then quit at the point of payment.
You can prevent this by providing all pertinent information up front. If the particular product requires your customer to make other purchases, clearly state so on the product page itself. Never leave this sort of information until the end, bait and switch is not a winning strategy.
Here is a breakdown of the most frequent reasons for cart abandonment according to Baymard research.
A full 55% responded that they did not complete a purchase because of high additional costs.
Additionally, some 21% quit because of hidden costs. While abandon carts will always happen, much of what causes abandon carts can be prevented with clear communication.
This is why you must carefully think through your checkout process and identify areas that can reduce friction. Avinash Kaushik, Google Analytics guru and analytics advocate, suggests putting yourself in your customer’s shoes:
“Investigate if there are simple things people are looking for — information that is only in the cart or checkout process that could “falsely” get people into that process. Two examples:
- Shipping Costs: If people just want to know the shipping cost, make it easier for people to find shipping than by having to go to checkout or add to cart. Not only will this reduce abandonment, and give you your real abandonment rate, but it also sucks for your customers that you make this painful.
- Delivery Schedule: How long will it take me to get the product? Do you have it in stock? Let’s not wait until the end to share this nice information.
Check that your website is carrying out promotions correctly and reiterates in the cart and checkout process (in bold, gigantic letters) the discounts that your customer was promised in the offer, or on your affiliate site, or your product pages or in your campaigns. It is amazing how many websites don’t do this simple thing well.”
How to segment your funnel data despite analytics’ handicap
Now it’s time for some bad news.
Unfortunately, unlike most other reports in Google Analytics, standard goal Funnel Visualization cannot be segmented (though you can overcome this with enhanced ecommerce funnel visualization.) This can handicap your research, since you will not be able to see how different groups of your customers behave in the funnel and compare the patterns.
This sort of information can be very helpful for personalization or identifying whether your target audience converts better, as well as showing you how well the acquisition channel(s) convert, and if your marketing message is aligned with the offer.
Fortunately, there is a roundabout way to segment funnel data. It may take a bit more time to analyze and derive information, but it is worth it.
Introducing the Goal Flow report:
This report can be segmented using the Advanced Segments feature, which allows you to see useful information that would otherwise be missing.
For example, you can check how mobile traffic converts, and what represents the great issue for that segment:
By examining the behavior of individual visitor segments in the funnel, we can uncover what can be improved to help improve conversions.
Here, it looks like the mobile traffic has trouble going through to the billing and shipping step. This may also mean that mobile visitors add goods to the cart using mobile, but complete their purchases using their desktop computers.
If the former is the case, than you simply need to improve your mobile checkout experience. By making your website more responsive to mobile users in general, you can solve this problem and capture an important audience segment.
Your checkout process will never be perfect, but you can always keep working to improve it.
For most sites, Google Analytics enables you to structure your funnel by the goals and steps a customer must take to complete the purchase process (single page applications are a trickier situation, but that’s for another article).
While Google Analytics can’t tell you exactly why a user quits, the position of the step in the funnel enables you to make an educated guess. And by analyzing where visitors go after they quit, you’ll get further insight into what may have gone wrong.
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The article is very good analysis, help me to understand more about google analytic, Thanks
You are welcome. Glad to hear you find the post useful. I am always happy to help.
Hey, great article. I am working on visualization for a funnel report and I would like to make a similar chart to your first example of funnel visualization report.Is there a js plugin that would give me a similar chart? or where did you get that example from. Thank you.
All the funnel visualizations in the article come from Google Analytics. All you need to do to have the visualization available is to set up a destination goal in your Analytics account and assign steps and Google Analytics will create the funnel visualization automatically.
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