A funnel is a defined sequence of steps a visitor is expected to take toward a goal, tracked so analytics can show the number and percentage of visitors who progress from each step to the next, and where drop-off occurs.
The value of a funnel report is in the drop-off percentages between steps, not just the final conversion number — it might reveal that 80% of visitors who reach a signup form abandon it at the payment field specifically, a detail an overall conversion rate would hide. Funnels require each step to be explicitly instrumented as a pageview or event, so accuracy depends on the steps matching how the site actually works.
A checkout funnel might track four steps — cart, shipping info, payment info, and order confirmation — and a report showing 1,000 visitors reach the cart but only 150 complete payment reveals an 85% drop-off somewhere in that flow.
Conversion rate is a single number describing overall completion; a funnel breaks that journey into individual steps so you can see exactly which stage causes the most drop-off, not just the end result.
Basic funnels assume a linear sequence, but many analytics tools support conditional or branching funnels to account for visitors taking different valid routes to the same goal, such as guest checkout versus account checkout.
Standard funnel analysis typically requires steps in sequence, though some tools offer 'open' funnels that count a step as reached regardless of order, useful when a strict sequence doesn't reflect real behavior.