Marketing funnel
The model of the path from stranger to customer - awareness, consideration, preference, purchase, and in modern versions retention and advocacy. A simplification everyone argues with and everyone still uses, because it gives teams a shared map of where buyers drop and which activity works on which stage.
Where it's used
Used for planning, reporting and team alignment. Good for a shared picture of where people drop off, and it misleads when treated as a real path.
How to calculate it
Step conversion = People at this stage ÷ People at the previous stage
Worked example
Illustrative numbersIn one quarter a SaaS ad reaches 500,000 people. Of those, 20,000 visit the site, 1,000 start a free trial and 150 pay.
Ad to site visit
20,000 visits ÷ 500,000 people = 4%
Site visit to trial
1,000 trials ÷ 20,000 visits = 5%
Trial to paid
150 customers ÷ 1,000 trials = 15%
What it tells you
Compare each step with a benchmark to see which is out of line. One extra point of trial to paid is often cheaper than getting the same result from more media.
We wrote about this
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