The classic web analytics funnel analysis is simple indeed.
The key metric is the percentage of times the process is abandoned on each step. The implicit assumption is that steps with the highest abandonment rates are the biggest problem.
When you actually do this type of measurement, the most common finding is that the conversion funnel step abandonment rates look like a big U. The first step of a form process often has a high-abandonment rate, followed by a series of steps with small and relatively similar abandonment rates, concluding with a final confirmation step that also has a high-abandonment rate.
Different design philosophies and implementations will produce different curves, but this is the pattern I’d describe as “classic.” Given this common pattern (or the existence of any common pattern other than an equal rates), is it meaningful to suggest that the step with the highest exit rate is reflective of a problem? Not really. That would only be true if the natural forms abandonment model was that each step had an equal chance of abandonment.
Once you discard that assumption, it's obvious that no particular level of step abandonment is positive evidence that the step is somehow broken or worse than any other step. Thinking the issue through, it should also be obvious that no particular level (or even change) in step abandonment is necessarily evidence of a problem.
This is a similar point to one I’ve made before many times about reporting. Just as no one Conversion Rate (or even an improvement in Conversion Rate) is positively good, a step abandonment rate must be viewed within a larger context.
Let me give you an example. Suppose you have form process with four steps and you produce a report like this:
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