Open vs Closed Funnel

Open versus closed funnel decides whether a user enters only by doing the first step or can enter from any step; that choice changes the denominator and the meaning of the conversion rate.

In a closed funnel the user must start from the first step, and someone who entered directly at the second step is not in the analysis at all; in an open funnel anyone who does any step enters the funnel from there. This simple difference has a large effect: an open funnel makes each step's denominator larger and the per-step rates different, because it counts users who skipped the first step. The right choice comes from the question: a closed funnel is correct for measuring onboarding, where everyone must start from signup, but an open funnel is more realistic for a page users reach mid-way from direct links and search. The common trap is confusing this setting with the order rule; openness is about the entry point and order is about the sequence of steps, and a funnel can be both open and order-based at once. Like the other settings, two reports are comparable only when both are open or both closed.