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I want to track user sign up using Google Analytics (not universal). Below is the step-by-step process:

1) User enters email

1a. if email record found they get redirected to repopulated form

1b. if email is not found they get redirected to a blank form

2) User gets redirected to a confirmation page and is prompted to check their email

3) User clicks the email link and lands on a page to fill in passwords

4) User is redirected to their profile page.

I would like to put this into a goal funnel so I guess using Events is not going to work? Does that mean I have to use Virtual Pages views on each step? If so what would be the best way to set this up.

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You'll have to create virtual pages for each step, and set up a goal funnel accordingly. So on each step you've described in your question you'll have to send a pageView on each event. In case of an actual redirect you really don't have to send the event manually.

My advice would be that you should streamline the steps into one javascript function, that way you can control the full process, and send custom pageView on the key points. With universal analytics, you can even do this on the server side of the site. By sending the pageViews you'll still see the drop-offs from the start to the goal achievement, just as you would in a more classic environment.

For sending a virtual pageView you can use this snippet

_gaq.push(['_trackPageview', '/registration/email-entered']);

In case of universal

ga('send', 'pageview', '/registration/email-entered');

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