Analytics best practices?

Google Analytics is a great starting point. I've found it's a good tradeoff between cost (obviously), setup effort and off-the-shelf visibility into what's happening, especially if the funnels can be measured from page-to-page (v.s. event-to-event).

I suspect the parts that make funnels complicated for GA are tough to avoid regardless of tooling (i.e. no matter what, you've gotta make sure the site/product is instrumented. And whatever tool you're using to visualize needs to know which steps make up the funnel).

This is maybe overkill for your use case, but Segment is my goto setup after that (e.g. if you need to track events and not just pages). I'd second @blakerson's comment on future proofing, because it's trivial to add in other tracking services and, more importantly, to save the raw events in a datastore like BigQuery/Redshift. This gives flexibility down the road with however you'd like to visualize / analyze, since tools like Datastudio, Looker, etc. tend to play nicely with BigQuery. As an added bonus, if you're comfortable with SQL, asking ad-hoc questions of the data is also super easy.

Google Analytics is pretty much the standard these days, but there are some interesting startups around privacy-focused analytics (including a few companies here)!

You can use Google's URL builder to create custom links for different campaigns that you can then track in GA: https://ga-dev-tools.appspot.com/campaign-url-builder/.

I would also recommend building a custom Google Analytics Dashboard with the KPIs that you want to track after setting up goal conversions and other things and setting up GA in Google Tag Manager (GTM) if you go that route.

Google has free courses on how to use Google Analytics here:
https://analytics.google.com/analytics/academy/

They're a great starting point and get fairly technical in the advanced courses.

Shameless plug: If you're using content marketing, we've also built a free template on Google Data studio that you can use for more in-depth insights: https://www.wordreturn.com/#templates.

Hey @goddamnyouryan, great questions. I have an email course that answers several of these questions (particularly, what is standard software, and how to track referrals effectively) but let me address your questions directly first:

Referrals

Referral tracking works "out of the box" in GA (using domains) but I endorse the use of referral parameters mentioned in other comments, so that you can understand traffic from places that don't have a referring domain (email and Slack are two very big ones). I specifically recommend UTM parameters. The URL builder mentioned by @automatizo helps build valid UTMs but you will need to learn what each property does.

Funnels

Google Analytics is very versatile but has a weakness in funnels specifically. Still, you should keep it since it's an industry standard that will come in handy in other places.

If you need funnels specifically, Mixpanel does the job. So does Amplitude, I believe.

Industry standard tools

Segment is an excellent choice - it makes your analytics implementation in code future-ready. It can be used in tandem with GA and Mixpanel.

Fullstory may be seen as relatively privacy-unfriendly, as it records entire user sessions.

Simple Analytics is an IH community product, and is privacy-friendly, but is relatively limited in its functionality compared to other industry standards.

The email course

I have a free email course that has four quick wins (including answers to "what tools should I use?") and one day dedicated entirely to referrer tracking with UTM parameters.

Why me? I've spent the last 8 years in the analytics industry, building scalable, billion-dollar analytics for PlayStation, Rakuten, and a chunk of the Fortune 500.

Here's the link to the email course. Oh, it also includes a cheat sheet to quickly get going with my recommended tool stack: https://signup.analyticsforindies.com

And/or, follow the product here on IH (but the freebies come with your email signup):
https://www.indiehackers.com/product/analytics-for-indies

Google Analytics is the most popular analytics tool and will work well but privacy is becoming increasingly important and a huge disadvantage of Google Analytics is the invasion of your users' privacy. I think we should be moving towards privacy-focused solutions and stop giving our data to large corporations. A good privacy-focused alternative is getinsights.io. Tracking funnel events with Insights is simple, you just set trackEvent() in the code to track (and label) any event on your code and referrals are tracked automatically from referrer headers.
You can also use getinsights.io along with GA because Insights doesn't use cookies so if you have a reject/accept cookie banner and users click reject you can still obtain your users' aggregated data with Insights.