In one line
A funnel is the step-by-step conversion path — impression → click → install → signup → purchase — where the audience narrows at each stage, like the shape of a funnel.
Why it matters
If you want to raise conversion but don't know where to start, map the funnel. The pass-through rate between each stage shows exactly where the biggest leak is.
A common trap
The lowest pass-through stage isn't always the top priority. Weigh room for improvement × traffic volume — a stage that's already seen by a lot of users can move more total conversions with a small improvement than a low-traffic stage with a low rate.
Go deeper
How to prioritize funnel stages is covered in Funnel Drop-off Analysis.