A personal recommendation is actually to use both, goals and funnels. The key a funnel is that you need to have successive steps that occur in some order. With regards to metrics tracking this is absolutely needed, but typically you may have 1-2 total funnels with many steps in your site versus goals where you could have 10-15 single goals. For Registry Stop we’ve structured our site so that our earlier stage goals become the same as steps in later stage funnels. For us in almost all cases the first part of the funnel is the visit, the second is registering for an account. We do have independent goals for visits and registrations as well, but we do not have funnels on those goals.
A key to getting the most use out of your funnels is to know that there is a workflow to follow to getting to that end goal. To highlight this slightly more visually let me walk through an example:
The parts of your funnel will be:
For setting up your funnel as we mentioned above its generally a set of page views. A very key item is the check box next to the first item in your funnel. If you check this is means any other steps in the funnel are not counted unless you the first step is completed. If you have a very structured 1, 2, 3 workflow this makes sense. However, if there are various ways for the goal to complete then be very careful about selecting this.
For this same goal above we have a corresponding funnel to track in detail how our conversion flows. The funnel itself looks like this once setup:
This results in a funnel report that looks like: