One of the great difficulties of utilizing this funnel for your company is knowing what good conversion rates are. As you move down the funnel, less and fewer people stick around. In a given month, you might get 100k visitors, but only 1k members (1% conversion), and only 700 retained users (70% conversion). Are these numbers good? It’s almost impossible to know for many reasons:
Is your traffic from a source that would identify with your product, or are they people that should bounce as soon as they read your first headline. Certain traffic sources will always convert to members at higher rates. Does your activation goal include a purchase or are you simply trying to get an email address on file? The more you ask for, the lower the conversion rate will be.
Regarding retention, does your market usually experience high retention rates, or would it be an anomaly to have repeat users? Likewise, is your product a consumer web product that should expect to have incredibly high retention if it’s going to survive?Given all the variables that go into knowing whether you have good conversion ratios through the funnel, here are some tips to keep in mind:
Your numbers should always be improving, or you’re doing it wrong. Despite all the unknowns, you should at least be improving month over month relative to your historical performance. Some companies publish their conversion ratios for certain aspects of this funnel. If you compile enough of them, then you can begin to benchmark your performance against their metrics.
You might do something that drives up visitors by 1,000%, but by doing so, it drives down retention by .05%. If you make this change and then dwell on the fact that your retention dropped then you’d be missing the point. The retention ratio is going down, but the number or retained users are going up. Your goal is to create conversion rates throughout all the stages of the funnel that work together to create the largest overall impact. Don’t miss the forest for the trees.