Measuring Conversion Rate
I recently read Avinash Kaushik’s post Excellent Analytics Tip #8: Measure the Real Conversion Rate & “Opportunity Pie”. I like the approach in general but I have a differing view on point #1 and point # 3 in this article. In my opinion almost every real visitor who lands on your site provides an opportunity for conversion.
Point #1, Avinash states that we should disregard those users who view only a page or stays on the site for less than 10 seconds when calculating the real conversion rate opportunities. In my opinion not everybody who bounces (views 1 page or views the site for less than 10 seconds) can be discounted. These users do present a fair change of conversion. Let me show you why I think that’s the case.
Let’s take an example of a visitor who searches on a keyword on a search engine and lands on the site, three things can happen before leading to the bounce.
1. User spends 5 mins reading the page and then leaves the site. (Assume this is a content site and we are collecting email addresses) Maybe the user will come back maybe he/she won’t.
2. User is so lost when he/she land on the site that she leaves (site is so disorganized or the landing page content or value proposition does not matches with the keyword he/she searched – even though site might very well have that content or product somewhere else)
3. User lands on the site which is not worth his/her time and leaves.- Wrong Site.
In the above 3 scenarios your can only discount number 3 but not number 1 and 2, 1 and 2 provide an opportunity to convert. (Note: Scenario No 3 is also worth looking at; not from conversion point of view but why and how did users land on your site when it was a wrong site for him/her).
Number 1 shows you that user was indeed interested in the site and can possibly sign up for email newsletters had your page provided him proper links or path to conversions. Discounting this user is a big mistake, considering how deeply linked sites are these days and users have lot of information on their finger tips. Users generally won’t spend time to find a path to get converted unless you can convince them, but these user provide an opportunity. This is especially true for lead generation sites, where visitors come to read something specific and they might read only one page in their visit but are valid conversion opportunity.
Number 2 shows that your site’s landing page was not well optimized to lead user to a conversion, you can’t discount the users and ignore this fact. This will be huge opportunity lost.
Note: Time spent on the site is calculated by time lapsed between 2 page views, so when a user views only one page they are automatically excluded from this calculations (not sure if there are tools that can calculate actual time spent even when a user views one page). So don’t discount users with one page views, think about why they only viewed one page what you could have done better to convert them
Regarding customer intent (Point # 3) Avinash says that “One of the biggest mistakes business make is thinking that every visitor to the website is fair game, conversion fodder”. Again, in my view there is always an opportunity to convert visitors to customers. In brick and mortar case I have seen my dad (who owned a retail store in India) converting those people who stopped by in front of his shop for 10 seconds or less or just stopped by to say hello or talk about a product they bought earlier or even to complain about a product they bought in past. If he had taken this approach of deciding that it was not worth his time to pursue those people with no intent of buying then he would have lost a lot of revenue and long term customers. For site which sells lot of retail items this is very true. For example a user comes to the site to gain some information about a product he/she bought in past, say information on how to setup up email on the cell phone, with no intention of buying a new cell phone or an accessory, this visitor can still be converted if the value proposition is there or site does a good job of selling. You can’t discount this fact.
Another thing that should be looked at, in calculating real conversion opportunity, is the effect of cookie deletion on visitor conversion. Cookie deletion inflates the number of visitors and hence your conversion potential. For example, a user comes to the site every day views few pages at the end of the each day deletes the cookies. This user will appear as 30 unique users when you look at the whole month but as you know this is only user. So you only have one conversion opportunity when you use visitor as your denominator.
You don’t have to agree with everything I said but let me know what you think.
Anil has over 10 years of experience in Consulting, Business Intelligence, Web Analytics, Online Advertising and Behavioral Targeting. Anil helps companies use Web channel data to improve online business results (lead generation, conversion, retention and self-help metrics). Anil has helped several fortune 500 customers effectively use web analytics and increase their ROI on the web. Anil has worked with customers such as Microsoft, SmartMoney.com, ESPN, T-Mobile, Hoovers, Realnetworks, Starbucks, and TheStreet.com
Anil holds a B. Tech in Electronics and Communication Engineering from India and an MBA from University of Washington, Seattle.