The Funnel in Numbers

Marketing is a chain of steps

Before someone becomes a customer, they pass through a series of steps. At each step some people drop out. This chain is called a funnel, because it is wide at the top and narrow at the bottom. Once you write the funnel as numbers, a vague question like 'is marketing working?' becomes a specific one like 'why do so few visitors book?'

The ratios that connect the steps

Raw numbers alone mislead. 600 clicks sounds good until you learn it took 60,000 impressions. The useful numbers are ratios between steps.

• CTR (click-through rate) = clicks ÷ impressions × 100. It shows how attractive your ad or search result is to the people who see it.
• Conversion rate = conversions ÷ visits × 100. Ad platforms often divide by clicks instead. A conversion is whatever action you count: a booking request, a purchase, a call. Always say what you divided by.
• CPC (cost per click) = cost ÷ clicks.
• Cost per lead = cost ÷ leads.
• CPA (cost per acquisition) = cost ÷ the actions you care about most. For most small businesses, that action is a paying customer.

Clicks and visits are rarely identical. Some people click and leave before the page loads. Some decline analytics cookies, so they are not counted. A gap is normal. A very large gap usually points to a slow page or broken tracking.

How to read a funnel

Look for the weakest step, not the smallest number. The bottom number is always the smallest. Compare each ratio with your own previous months, or with a sensible expectation. A low CTR points to the ad or the snippet. Many visits but few leads points to the page: no price, no clear booking button, slow on mobile. Many leads but few customers points to what happens afterwards: slow replies, no follow-up, a price that surprises people on the phone. Change one step at a time where you can. If you rewrite the ad and the page in the same week, you will not know which change helped.

The common mistake

Mixing denominators. 'Our conversion rate is 0.1 %' might be bookings ÷ impressions, which is not a conversion rate at all. Another classic: celebrating a lower cost per click while the cost per customer rises. Cheap clicks from the wrong people are expensive. The number that pays the rent is at the bottom of the funnel.

Do this now

Take one channel, ideally the one you spend money on. Write down last month's numbers: impressions, clicks, visits, leads, customers and cost. Calculate CTR, conversion rate, cost per lead and cost per customer. Circle the weakest step. That step is where your next hour of work goes. Next month, repeat the same calculation and compare the two rows.