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

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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
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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:

formula for calculating funnel conversion rate

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.