User Flows & Funnel

Overview: –

Every product built, is built with an intention to be monetized and to make profit, be it with High or NO Customer Acquisition Cost (CAC). With the advent of advanced analytics and connected digital products, it has become easier to track user’s behavior and their actions on a product. This data provides useful insights on improving the product and more importantly increasing the business. While, if the same data is misinterpreted, it leads to burning resources in building features or making radical changes in the product, thereby drifting away and even losing business. So, to ensure a cost effective approach and quantifiable outputs, a method or a technique is to be used.

This is where User Flows and Funnels come in the picture.

In this chapter, we will study at length: –

• What are user flows?
• How do user flows affect businesses?
• What is funnel?
• How funnels and its segmentation can be used to improve the overall product and increase engagement and business?

Let’s start

What is User Flow?

In order to use the primary usecase of a product or perform an auxiliary task on it, users navigate through a set of screens thereby following a path.

The path which users follow to navigate the product for a purpose is called the User Flow.

Here, the user experience plays a major role as a bad user experience would waste user’s time, confusing them thereby leading a business to eventually lose the customer, have a dent on the sales and reputation as well. A better user experience will drive more value for both, the business and the user.

Product Managers should closely monitor the flows users take through their product because it is here where the experience happens.

A great user flow leads to conversion.

What is Conversion?

Let’s take Zomato’s flow as an example to understand conversion.

We know that food delivery and convenience the primary goal of Zomato which drives a huge chunk of their business along with others.

For a user to get delivered, one may do the following: –

Register/login/open app -> Home Page -> Search Dish/Restaurant to Order -> Select food to order -> Check Order Details -> Place Order -> Make Payment -> Track Order -> Receive the Delivery

You would see as a user that apart from all other flows on the app, this is the most seamless and easy flow.

Why?

Because this flow brings in business.

Now as an exercise, try reaching customer service on Zomato and notice the contradiction.

You’ll notice the flow is convoluted, inconsistent and if used after a gap of a month or two, it’s radically different making you wonder and eventually leave it.

It’s a no brainer that customer service would eventually lead Zomato to either initiate a refund or get the order canceled.

Therefore, we can say that food ordering flow is the primary flow of the application which leads to a Conversion.

Conversion is a marketing term which is the act of users performing specific actions such as buying or registering themselves.

Every product will have a set rationale and notion for a conversion and desired action.

Users go through a set of small number of paths that lead them to a certain action. Optimized flows increases the conversion rates thereby benefiting the business.

User Actions: –

When it comes to e-Commerce websites and Apps, two user actions play a very important role in getting conversions. These actions are: –

1. Browsing
2. Searching

Both actions although might navigate you possibly to the same page, but the motive and intention that drives these actions decide the conversion rate for a business. Let’s understand this in a better way.

Browsing: –

Browsing is the act of exploring on internet. If a user is browsing through an e-commerce website or an app, he/she/they are not sure what they want or even if they need something in the first place.

Searching: –

Users perform a search when they have a specific need or a want and they know what it should be or have the slightest idea about it to begin with.

By definition, a search action by the user is targeted action on the application/website to buy or look for something specific.

The search action therefore has a very high conversion rate as the users are already interested in something.

This is why we can observe across a lot of successful products and website that the search action & the search tools needed are refined and prominent on the products to optimize the flow.

User Flow (Cont’d)

A good practice by some Product Managers and organizations evidently seen is to make the product stand out but at the same time it is equally important to also consider what conversions and flows will be familiar & intuitive for users to navigate through.

If a Product has a radically different flow which is different and unique but at the same time convoluted and confusing leading users to make extra effort to work through the product, then abandonment is bound to occur, hampering the conversion rate.

What should be done in such cases and how as Product Managers should we avoid it?

The answer is our next segment, Funnels.

What is a Funnel?

In the sections above we had a look at Zomato’s food ordering flow which is one of the primary sources of conversion. It has a start and an end with a set of steps in between to keep the user hooked to the app and motive to order food.

In business, the flow for users on a product or service towards the end goal is called Funnel.

Today, with the advancements of tracking tools linked on the website and apps, businesses especially in the e-commerce space can track the funnel of all their potential customers, right from the search result or ad view all the way down to the final step of making the payment.

With such degree of tracking at disposal for Product Managers to analyze the data, it enables PMs to identify the parts of the product or experience which might have left users to abandon the flow. Then, by working together along with design, marketing and engineering, the flow can be improved thereby reducing the abandonment and increasing conversion.

Improving Flow of Funnel : –

Let’s understand this with the help of Ironman’s flow

We will take into consideration a user who’s visiting Ironman for a first time visitor.

Here are a few images from the site for the flow: –

Let’s assume, 10000 visitors landed on Ironman in a month. The table below depicts the conversion by taking into assumption conversion rates for the sake of explanation.

The act of improving the funnel is simply to decrease the abandonment and increase the conversions. This can be achieved by improving the part of the flow with the lowest conversion rate in the flow.

As we see above, the part of flow with lowest conversion rate is Sign in/Registration part with 10% conversion, which leads users to registration flow.

To explain improvement better, let’s consider improving Product Page or Add Clothes to Iron page for improvement. Keeping everything else same, we improve this page, this is what we’ll notice

From 11 customers who ended up placing an order, now 13 users place an order, when 10000 users land on the site.

Now, let’s improve Sign-In/Registration Page with previous figures: –

We observe a very stark difference. The number of users placing the order went up from 11 to 42 which is almost 4X the current flow.

The Sign-In/Registration flow which initiates through the checkout page for guest visitors may have been improved by: –

1. Skipping the flow in the first place and allowing Guest User ordering by simply providing address
2. Making the UX better with minimalistic flow for registration.

Funnel Segmentation: –

Taking a leaf from the same example discussed above, let’s extend it further to understand funnels and its segmentation.

User A landed on Ironman by searching on Google for an online laundry service, while

User B lands on Ironman using the address, rather typing it.

Although both land on Ironman’s home page, both will have different conversion rates.

User B who comes to the site is probably aware of what Ironman is, the services offered and the quality of delivery. User B has a specific intention to use Ironman. User B is most likely to make a purchase than User A who may have heard about the company or the product while also being skeptical about the service quality having never experienced it in the first place.

Mixing these two in one funnel will be misleading.

If the group where User B falls in converts twice as much as the group of User A, then their combined stat will hide the conversion rate of User A.

The most convenient way to then segment the funnels will be according to their source from where they arrived to the site – be it via advertising, organic or direct.

What do Funnels mean for Product Organizations who sell products that function to lead users into doing an Activity than make a Purchase?

Think of this question from the view of Microsoft selling you its Office Suite or Dassault Systemes (My former employer 🙂 ) selling Catia, or Atlassian selling pain, sorry.. JIRA etc.

Here, the user makes the purchase at the 0th step where he/she buys the product to use it. The user can range from a single user to a large corporation.

In such products, if the flow to do an activity is tedious, cumbersome or convoluted, then the user(s) either get frustrated or eventually get used to it. When users get used to a complex flow, it becomes difficult for the product orgs to change the flow or even improve it because users simply hate it after having given effort to use the product.

The worst outcome in such cases is that the user or the organization may simply migrate from the product to another product thereby leading to a huge loss to the Product Org who sold it.

Hence, such organizations work on constantly working alongside users to improve the product, train them and ensure they never switch the platform.

Important Fundamentals and Considerations for User Flow, Funnels and Conversion : –

It is pretty evident from what we’ve learnt so far that if a user does not make it down the funnel, then business does not make a sale.

If a particular step or part in the funnel is performing low or way below the expectations, then the Organization and the Product Manager should work on investigating the issue at the earliest, build an optimized solution and release it to avoid abandonment and loss of business.

On the flip side, user abandonment doesn’t necessarily mean or indicate that there’s a problem with your ecommerce platform or the product. It can also mean that users abandoned the site/product because they were not interested in buying, got even distracted or didn’t like what was being sold and hence never made a purchase

You as a Product Manager will find yourself (if lucky) in such a conundrum on how to utilize the resources available in order to either improve the flow or improve the product as a whole.

We’ll close it at this thought.

Summary and Takeaway: –

We studied what user flows are, what’s conversion and what are funnels. We discussed this using the product, Ironman which I like to say is being built in front of you as we take these lessons.

In the next chapter, we will study at depth What is Product Strategy?