The funnel drop-off rate is a metric often used in e-commerce, particularly with a web-based purchasing process involving a shopping cart. During this process, there are generally multiple steps involved for a customer to ultimately purchase a product. For example, the customer must add the desired products to their shopping cart. Then the customer must visit the shopping cart and check out. The check-out process involves steps to enter payment information and potentially other information such as a shipping address. Finally, the customer must confirm the purchase. At any point along this conversion process, the customer may end the purchase and discontinue the process. Analyzing the funnel drop-off rate can help identify steps in the process that are causing customers to discontinue engagement and are thus areas of focus for improvement.
This recipe demonstrates how to calculate a funnel drop-off rate with respect to an e-commerce purchasing process involving a shopping cart and payment. However, the same techniques can be used to analyze any multi-step customer engagement process.