Every online business in general has a funnel.
The funnel is a flow for how you want users to get in contact with you and start becoming your new customers.
Some kind of funnel is always present.
Whether through an application form on your site, a Calendly booking form, or calling a phone number directly after finding it on your website.
The best practice is to monitor the funnel metrics for each step over time to see their results.
By seeing the results of each step, you’ll be able to see exactly which parts of your funnel work and which don’t.
The goal is to minimize the “drop-off” between each step.
Would you like to see instantly which part of your funnel needs improving?
In this post, I’ll share with you my table that monitors specifically Google Ads traffic for each step in a SaaS marketing funnel (which can be customized for any funnel), broken down by month.
What is a SaaS PPC Funnel?
The funnel is a process of acquiring leads and converting them to customers.
Here’s how it goes:
Traffic Source → Landing Page → Some Action → Final Sale → Cancel
We won’t cover the Cancel step (customer retention) in this guide, but for SaaS, it’s also an important step of the funnel to measure as how long users stay active directly affects your customer LTV, how much you can spend to acquire customers and how good your product experience is.
However, it’s more of a metric for the product team to improve their onboarding experience rather than marketing.
Here are 4 most common SaaS funnels in practice:
- Freemium funnel
Users can sign up to your tool for free with limited features.
PPC Traffic → Landing Page → Account Created → Activation
- Free trial sign-up funnel
Users have a limited time, but experience the full feature set of your SaaS.
PPC Traffic → Landing Page → Trial Start → Activation
- Lead generation funnel
Users need to fill out a form on your website to sign up.
PPC Traffic → Landing Page → Form → Email/Call Comms → Activation
- Demo/call booking funnel
Users can schedule a call with you directly on the website and schedule a demo with you.
PPC Traffic → Landing Page → Demo Form → Call → Activation
The free sign-up model is similar to the freemium model, it’s just the time that factors the difference.
The demo/call booking usually has higher friction but you get more qualified users.
Here are some examples of businesses using these funnels:
- Freemium – Loom, ClickUp, Mailchimp
- Trial Sign Up – Intercom, Supermetrics (Also offers demo/call booking), Madgicx
- Lead generation – Hubspot (Also offers demo/call booking), Backlinko
- Demo/call booking Databox, Dooly, Secure Privacy
There are a lot more funnels out there.
Another interesting type is the resource download funnel – where people offer interesting resources (e.g. eBooks) which people get by filling out a form used for generating leads.
However, you should be aware that none of these funnels happen exactly like this.
There’s a drop-off at every step.
The reason behind this is that users’ journeys are pretty messy.
After creating your funnel, it’s time to track its performance to see how it works and what can be improved.
How to Track Your SaaS Funnel?
This particular SaaS conversion funnel has 4 main steps:
- The Click (how well did our ad do at winning the ad auction?)
- Trial Started (how well did our page do at convincing the user we can help?)
- First Action (how frictionless was our onboarding process at getting the user to actually use their trial?)
- Purchase (how compelling was our offer and trial experience at winning the sale?)
Based on what we see, we can direct resources to the department responsible for that step, make appropriate improvements and monitor the ongoing effects.
1) Google Sheets Funnel Analysis
The most basic thing you can do is to manually get an overview of each step of the funnel in Google Sheets.
How to do it?
Export all your conversion events that you’re interested in from Google Ads.
Ideally, you have those already set up and you’re tracking each step of your funnel.
For some of the conversion actions like impressions and clicks, you want to be pulling the data for a specific timeframe.
Then, for the other conversion actions, we have account created, product action A, product action B, and purchase.
Product action A and B are very similar in nature, but they’re not one after another.
They’re two different key actions that we want users to take.
In the D column, we can see the conversion rate from each step compared to the previous step.
By comparing the number of clicks with the number of impressions (also known as click-through rate) we got 9%.
That means that 9% of people who saw the ad actually clicked on it.
The industry average for CTR is around 2-15%, so 9% CTR is considered good.
Then, we have the account created.
We’re looking at the number of accounts created, divided by ad clicks.
In our case, it’s around 2%, which is on the low side for a freemium tool like this.
Then we have product action A which has a 95% conversion rate, compared to the accounts created.
So I haven’t put a status here, instead, I put a note to check the tracking on that, to see if it’s firing correctly or whether it’s firing immediately on initial login.
Still, that’s suspiciously high, considering that there would likely be users who abandoned their account creation and never logged in.
We would expect a 10 or 20% drop-off from people creating their accounts to logging in, especially if SaaS doesn’t have a welcome email or an onboarding sequence to get them started.
Product action B is very similar to A but we’re seeing a much lower conversion rate on that.
So I’ve put a label there that it could be better in terms of actually getting them to use the product.
Moving on to the purchase.
Purchases are being compared to the accounts created.
Essentially, what’s important for us is how many users started, how many have created an account, and how many purchased.
We can see that our conversion rate is around 1.73%, which is quite a low percentage of users who became paid customers.
There’s not a simple recommendation to improve this, but it needs attention.
A few things that need to be looked at:
- Could the onboarding sequence be better?
- Could we have a better onboarding flow inside the software to get the users started?
- How many daily active users do we have?
- How many daily active users do we have as a percentage of our total signed-up users?
- How many users are using the tool’s free plan?
If you have many users on the free plan, the offer would need to be changed to increase the number of purchases.
However, if not, you’d want to improve the free experience.
2) Google Ads Custom Columns
Custom columns can be built into your Google Ads accounts and displayed in your main view dashboard.
They are one of the ways to track your final performance.
The way we verify or check the performance of the campaigns is by building out our funnel in Google Ads.
In this funnel, the process is that users will go to step one, then step two, and after that sign up.
So in step one, they will have to enter their information, then for step two they’ll have an option to include the payment details, and step three will be where they enter all the required information and get the free sign-up.
To start making the custom columns, go to Columns then go to Custom.
You can create custom columns here.
Select the Custom columns and let’s go with step 1 of our funnel.
Now let’s click on Columns, then Conversions, and All conversions.
Now we’ll select the Signup step 1.
That’s how we created the first step of the funnel.
For step 2 and the signup, we’ll go through the same process.
Steps 1 and 2 are secondary conversions, while the signup is a primary conversion.
In the custom columns, we can also create some formulas.
We’ll use our Step 1 conversion rate as an example.
With this custom column, we can see the percentage of people signed up for step 1 based on the number of clicks.
Another example of the usage of custom columns can be calculating the drop-off rate for each step.
As you can see, we got the drop-off rate for step 1 by dividing the number of conversions to step 2 by conversions to step 1.
And with that, we can see the percentage of people that haven’t continued to step 2.
High drop-off values point out that the step needs to be optimized.
✏️If you want to track your budget easily within Google Ads, here’s our handy Google Ads budget tracker template.
3) Looker Studio
Funnel Tracking Table
Our third analysis will be done in Looker Studio, a free reporting tool connected to Google Ads data.
Our funnel tracking table is very simple. It’s just a weekly or monthly breakdown of all our final steps.
We’re tracking the metrics similar to Google Sheets.
Creating this table is actually quite straightforward, as long as you have your goals set up in Google Analytics.
Once you have that set up, it’s just a matter of adding those metrics to your Looker Studio table.
To find the conversion rates between each step, you can make custom fields just in that table or for your whole data source, which finds the percentage of one step versus the other.
Just bear in mind that you have to do the SUM of the metric divided by the SUM of the other metric.
Otherwise, it would divide every instance of that metric by the other metric.
Time Series Chart
Within Looker Studio, we can also track each step of the funnel with time series charts.
I’ve done this for new users, pricing, step one, step two, created an account, and purchases.
You can see how each of these goals from Google Analytics is being monitored.
It’s important to monitor each step, to make sure that there are no sudden flatlines.
You can see that we had some emergencies, luckily in terms of just the tracking in this case.
If it was in terms of performance, you could also spot those relatively quickly.
If you need help with setting up a conversion action and funnel drop-off analysis, feel free to reach out.
4) 3rd Party Tools
Here’s some paid dedicated 3rd party software that can help you track your funnel steps:
There you have it, all you need to know about a SaaS marketing funnel. Once you find the type of funnel that suits your business best, it’s important to remember to always keep optimizing.
As the saying goes, what gets measured, gets managed, and only by measuring how well each step of your funnel does, you’ll be able to optimize it and get the most out of it.