When considering conversion in web analytics, you almost immediately encounter the notion of a conversion funnel. The idea is simple. Getting people to accomplish some goal on your site requires them to progress through a series of web pages (assumed to be hosted on your site). The mouth of the funnel is the first page in the sequence. The goal conversion goal is considered to be reached when the visitor reaches the last page of the sequence.

So, for instance, a newsletter signup funnel might consist of your site's homepage where there is a link to sign up, several intermediate steps where the user fill out a form as they are signing up, and a final thank you page once the user has completed the sign up. The mouth of the funnel is the homepage, and the goal is the thank-you page. Every time time the user moves from one page to the other is called a funnel step.

Generally speaking, you lose visitors at each funnel step.

The problem with this approach for most small organizations is that it assumes they are hosting all of these steps on their own site. It further assumes that each step is accompanied by a new page load. In the past 4 or 5 years, advances in web architecture have significantly negated both assumptions.