Conversion Question

I was asked the following question recently and I thought it was worth sharing my answer in case anyone found it useful. The question is in italics and my answer follows.

Hello Steve,

Last year i saw your talk on designforconversion on that lovely boat in A’dam.

I’ve been thinking about the defintion of conversion rates and i think it’s flawed. I would like to hear your opinion.

The defintion i use now is a) number of users that completed a specified action / b) number of visits

a) makes sense
b) to use visits instead of visitors also makes sense because every visit is an opportunity to convert

However with visits that takes less than 10 seconds (bounce) there is not a chance for conversion. So it’s not fair to add these visits to total visits.

If you want to influence visits < 10 seconds your best chance would be to work on offsite promotion. F.e. your branding, seo/sea etc. The only onsite thing you could change to influence this metric is faster load times, design of the site (first impression) and clear headlines mayb. So that could be a reason to count these visits as well when calculating conversion rates.

What do you think?

Hi,

Your definition is fine for specific purposes. I often use conversion rates segmented by engagement variables like time spent and single page views. However I stick to the standard WAA definition when someone asks for general reasons. Visits/converting visits or visitors/converting visitors.

To quote the document notes from conversion rate;
“Calculation of conversion rate requires consistency between numerator and denominator, both with units (visits or visitors) and with segments. For example, if a conversion is defined as “the number of visits where a purchase was completed,” then the appropriate conversion rate would divide those conversions by the total number of visits where a purchase could have been made (typically, total visits is used). If you had counted conversions as visitors who purchased, then the denominator would be total visitors. Further,if you are considering the number of visits from affiliate links that completed a purchase, then the denominator would be total number of visits from affiliate links.

More info can be found in the WAA standards document which can be found on the Web Analytics Association site.

Saying it’s not fair to add bounced visits is controversial. Bounced visits could for instance indicate a really strong disconnect with the search marketing advert and the landing page for instance or other poor relevance. In other words if your conversion rate is low because of high bounce it could be that you’re doing a bad job converting people.

This is where good design, but more importantly effective and clearly relevant messaging between advert and landing page is important. In my experience customers want to know the adverts that work and the ones that don’t and bounce is be a good KPI to pay attention to for that reason.

Hope this helps

Steve is a well known analytics specialist, author and speaker. A pioneer since 2002, he established one of the first European web analytics consultancies (Aboavista), later acquired by Satama (now Trainers’ House) in 2006. In 2008 he wrote his first book Cult Of Analytics published on May 14th 2009. He currently serves as CEO at Quru and has presented and keynoted web analytics topics across Europe. These include The Internet Marketing Conference (Stockholm), The Search Engine strategies (Stockholm), IIH (Copenhagen), the IAB Finland (Helsinki), Media Plaza (Amsterdam), Design For Conversion (Amsterdam) The eMetrics Summit (London, Munich, Stockholm), Divia (Helsinki) in addition to sitting on dozens of panels.

Posted in Conversion, General, Metrics/measurement, SEO, Web 2.0, Web Analytics
3 comments on “Conversion Question
  1. To me, the basic conversion rate is utter useless and most often confusing, and a basis for making wrong decissions.

    First of all, it’s an average over how all trafic is performing through all of your site. It’s like saying that if you stand with one leg in a freezer and the other on a hot plate, on average you’re okay :-)

    What you need to do is to expand the concept of Conversion Rate into a Conversion Funnel. And start measuring where exactly it is people drop out your webshop, and start optimizing that.

    A basic conversion funnel could consist of the following steps:
    1) Visits
    2) Non-bounces (Visits – bounces)
    3) Visits to the beginning of the checkout process.
    4) Conversions
    (your could add a 3a, each checkout step)

    That way you’ll get a clearer view of where exactly it is you are going wrong with your site/shop. And you can start optimizing towards lowering the dropout rate for each of the steps. Don’t pay too much attention to the overall CR, take it in steps.

  2. @Soeren;
    Conversion rate is a KPI. If it’s too low on average you need to do something about it.

    I agree with your concept of looking at where people are leaving a funnel and optimizing that. In my book (due out in April) the Insight model describes similar steps to do a conversion assessment.

    I look at exit rates, bounces and poor engagement as defined by the goals of the site to pinpoint areas to optimize conversion. That’s why I said that bounce is important to measure. It is a direct measure of an irrelevant visit to a page.

    It surprises me that so many people are discounting bounce rates from their conversion optimization process. It’s basically where you should start and one of the easiest things to find from the tools.

  3. i think overall conversion can help as a benchmark for other conversions. The freezer/hotplate example ‘it gives you more perspective on how cold is cold and how hot is hot’.

    I kinda like the idea of breaking down overall conversion into small steps. By isolating steps it’s easier to see where opportunities lies. It makes me thinking of Business Driver Dialogue.

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