Funnel
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Definition
A funnel is a defined sequence of steps a user passes from entry to a target action. At each step conversion is measured: the share reaching the next step out of those reaching the current one. A funnel answers where exactly the audience is lost, not just how many reached the end.
How to compute
Define steps by events and a time window. Step conversion is the ratio of those reaching a step to those reaching the previous one; overall conversion is the product of step conversions or the direct ratio of end to start. Fix the denominator of each step explicitly, or the numbers are incomparable across reports.
Pitfalls
The classic mistake is measuring every step against the first, not the previous one. Unfinished cohorts understate later steps. The time window between steps must match real behaviour. Dropping out of a step does not always mean abandoning: some traffic simply leaves by another path.