Most web analytics practitioners define Conversion Rate as the percent of site visitors who do something the company who owns the website wants them to do. So submit a order, sign up for a email, send a lead etc.
Measuring Conversion Rate is usually the cornerstone, if not the king queen and jester of the court, of any web analytics program. It is perhaps the very first “KPI” that is measured by any good analyst and we can’t seem to get enough of it. We report it up and down the chain of command and it occupies a place of prime importance when we present to senior management.
After all why would you not, the logic is: your conversion rate is 2.2% (shop.org study Q2 2006 for retail sites) and if you improve it by 0.01% you will make a million bucks (replace that with a really high number for your company).
Yet there is perhaps there is no other single metric that is abused as much as conversion rate, none that is perhaps more detrimental to solving for a holistic customer experience on the website because of the company behavior it drives.
The behavior most observed is that people obsess about conversion rate, it is every where, massive amounts of energies are spent on getting it up a smidgen, entire site strategies exist simply to move the number up at the cost of caring about anything else.
My recommendation is that you should stop obsessing about conversion rate, put Overall Site Conversion Rate in some appendix of your weekly / monthly presentations but that is about it.
The core reasons for this recommendation are:
- Minor Reason: Overall site conversion rate (non-segmented) for your site is a nice to know metric but it is quite meaningless in terms of its ability to truly communicate actionable insights. You got 100 visitors, 2.2 of those converted, where do you start to look for what the heck happened?
- Major Reason: A minority of visitors that come to any website come to buy (minority defined as usually less than 50% of site traffic). Consider amazon.com or ebay.com or intuit.com or store.apple.com, all major “ecommerce sites”. So if a minority of people come to your website to buy why should we obsess about Conversion Rate? Are we not guilty of letting this relentless focus on conversion rate result in criminal negligence towards those other website customer segments?
The question is: If you solve for conversion rate are you solving for all your traffic and are you improving the website experience for all your customers?
My answer to that last question is a big whopping thumper of a No. We are guilty of causing sub-optimal customer focus by using conversion rate and web analytics, and I recommend that we stop that.
So what might you be missing if you only focus on conversion rate?
- Customers who will come to your website to “research”, product specific. They will never buy from your website, maybe if you do a awesomely kick butt job on the website maybe you will convert them but it is highly unlikely. An example of this is you/me using amazon to primarily read customer reviews or watch the new Bill Maher show, or wanting to read specs or print web pages with product information.
- Customers who will come to your website to “learn” about you, the company. They are looking for jobs, they are looking for press releases, they are looking for your company founders bio, they are looking for why you exist, they want your blog, they want to unsubscribe from your emails etc.
- Customers who come to our websites for “help”. This is people looking for support or looking for driving directions to your office or they want to send you a nasty email or register their product etc.
- Customers who come for reasons that we don’t know simply because we simply never bothered to ask (this is huge by the way).
All these segments, and there may be different ones for your website, will never buy from you. All these segments are not static, they change based on market conditions, based on actions your company takes (say campaigns or branding etc), based on stuff your competitors do etc etc.
Obsessing about conversion rate means a focus on the 20 – 40% of the traffic on your website that is “in the game” and solving for just that minority.
Obsessing about conversion rate means that you are implicitly ignoring major parts of the traffic that you should be creating optimal customer experiences for (pages, content, whatever).
Obsessing about conversion rate, perhaps most importantly, means you solve for the short term, the now, and just Submit Order, at the cost of solving for long term metrics like creating Net Promoters.
(And I say that knowing that perhaps for your site 0.001% improvement in conversion is ten million dollars.)
So if you take me advice and mount this coup in your company and dislodge conversion rate from the throne which metric should take its place?
Let me submit one powerful metric for the coronation: Task Completion Rate by Primary Purpose.
Figure out what the the core reasons why people come to your website (the question to ask is: Why are you visiting the website today?) and then figure out if for customers in each of those segments of primary purpose if they are able to complete their task, whatever the task the customer came for (the question to ask is: Where you able to complete your task today?). Do a little cross tab and you’re in business.
The answer to Primary Purpose question will look something like this: Research Products/Services, Purchase Products/Services, Look for Company Information, Register the Products I have already Purchased, Looking for Support, etc etc.
The answer to the Task Completion Rate question will be Yes or No.
If you can do this you suddenly are 1) massively aware of why people come to your website 2) just a few of them are there to buy, and how many 3) where is your website failing you.
Now you know what you need to do to improve your website experience for your major segments of customers to increase their task completion rate. It is impossible that higher conversion rate will not follow.
But as you can see the behavior you will drive in your company will be fundamentally different under this approach.
Let me close with a humble/arrogant (your choice) point of view by applying the recommendation to a real world practice.
I am a fan of Persuasion Architecture by Future Now Inc. I have had the privilege of hearing Bryan and Jeffery Eisenberg and John Quatro-von Tivadar speak, they are awesome (Future Now blog). I like the overall beauty of Persuasion Architecture, especially the Uncovery process.
Stated simply the overall approach is: Understand customers really well, create personas for customer segments and then use patented software from Future Now to redesign website to solve for those personas needs/wants leading to sales/conversion.
Based on the logic of this post IMHO the overpowering focus on Conversion (getting visitors to buy) and doing all the work to get a site visitors to buy limits the massive impact that the methodology can have.
Rather than being “Persuasion to Conversion by solving for customer needs” of just buyers there would be a exponentially powerful outcome for Future Now and their clients if it was “Persuasion to perfect Task Completion Rate by solving for all customer segments”. Everything about the architecture stays the same. Except the final goal.
It is much harder to solve for multiple goals, to move from solving for conversion rate / buying to solving for task completion for your major personas and the purposes they come to the site for. But doing that will provide long term sustained competitive advantage that would be hard to replicate by your competitors. (Besides my mom says that nothing worth valuing in life comes easy. : ) )
In the end, when the dust settles, it is about creating satisfied site visitors no matter why they come to your website and secondarily it is about short term revenue.
What do you think? Too much la – la – la? Anything I am missing in my thinking? Are you convinced and will you mount a coup in your company to dislodge conversion rate? Would you like to give me a hug? Please share your feedback via comments.
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PS: This post is dedicated to my dear dear friend Blaire Hansen, for reasons she and I know :^).
Via 
Hi Avinash,
is it possible that your examples of "what you might be missing" are more indicitive of a failure to define all the possible and *relevant* "conversions".
The problem being that the "conversion" has previously been focused on selling something, but no focus on quite successful "conversions" that don't sell something. A rose by another name…
Steve
Remember one of your first posts, Web Analytics are Dead (or something like that?) I think you meant: webmasters and analysts who care about "How many visitors did I get today?" or even, "How many visitors did I get today from my Google AdWords?" are living in the past. But there are a lot of people just like that out there and I would love to see them all start to care about conversion rate before I tried to persuade them that conversion rate by customer need was the metric to go to. (This is because we all crawl and then walk and then run.)
WRT moving those people who are measuring conversion rate to measuring conversion rate by customer intent/need — the hard part is measuring the need, the conversion is easy once you know it. Sometimes figuring out the need is easy — maybe you could say, if more than 50% of their pageviews were customer manual pageviews, they must be there for customer service. But the customer who goes to one page and bounces — did he bounce because he was at the wrong site, or did he bounce because we didn't make it clear to him that he was at the right site? And he sure didn't take the time to fill out a "What is your intention today?" form.
So will your next post be about how to measure conversion by customer intention?
Robbin
Steve: If conversion can be thought of as "someone came looking for a answer to fix error code qpc160245 from our product and found the right answer on our website and fixed the issue" then I think it would be indicative of a failure of conversions not defined.
Most often though conversion rate is connected to selling or submitting a lead etc. Hence my recommendation to use Task Completion Rate as the new metric. It could be "rose by another name" but in my mind it is a different metric that focuses on getting people to complete the tasks they came to the site for.
I am pessimistic that if we keep the metric the same, conversion rate, and now say we are focused on helping all customer segments complete their task on our website for all the main purposes for which people come to the site for.
Staying with Conversion Rate might still promote the short term focused behaviour from company employees. What do you think?
Thanks so much Steve for taking the time to comment.
Robbin: I want to stress that I am not recommending measuring Conversion Rate by needs. Please see my reply above to Steve.
I am being bit of a smart ass here but: In most Central Asian countries they never had land line telephones, they went from Morse code to cell phones and progress came faster, cheaper and more efficiently.
In my mind if there are people who are new and don't care as much about conversion rate I would much rather they got brainwashed into mindsets like Persuasion Architecture to learn about their customer needs and then focused on measuring what the Task Completion Rate is by Primary Purpose on their website. They will make much more money.
Here perhaps I am being too optimistic. What do you think?
Thanks so much for taking the time to comment.
PS: Robbin I would caution against measuring "need" based on page views. All web analytics applications would be sub optimal at that.
(My next post, to reply to your last thought, is on basics and best practices for measuring conversion rate, because I don't want people to think conversion rate is not important, it is but just not as much as all the hoopla that exists. I finished drafting it last night, would love to know what you think of it.)
Avinash, your post today reminds me of Jared Spool's presentation from Emetrics 2005 (I believe) where he said (I paraphrase) "Conversion Rate is Dead!" Instead, for online retailers, he evangelized the use of "Revenue per Visit" and "Revenue per Visitor" … what do you think about those metrics as top-line for online retailers? Do you think they're suffering from the same lack of segmentation and specificity or do you use them at Intuit to keep an eye on the big picture?
As always, your devoted reader.
Eric T. Peterson
http://www.webanalyticsdemystified.com/weblog
Eric: Jared's guidance was excellent and takes us further along the journey. Both of those metrics are good. But they potentially fall short.
Measuring Revenue Per Visit is sub-optimal when a minority (less than 50%) of site traffic comes to buy. We are inflating the denominator and making ourselves look worse.
This might be better: Revenue Per Visit for Visitors who came with the Remotest Intention to Buy. That would be cool, but nearly impossible without chips implanted in our visitors brains that communicate to us their intentions.
My advocacy is for a step away from the whole "revenue" mindset to a "task completion rate" mindset.
For customer segments who come to buy, or with any intention to buy, measure conversion rate and revenue and all that good stuff (task completion rate will give you a similar feel for segments who are there to buy).
But for other customer segments don't measure any revenue metric because that is not why they are there, try Task Completion Rate. Then we solve holistically and for the long term.
Does this make any sense? : )
Thanks for commenting Eric, it is so great to hear from readers of the blog.
Interesting! Our site does not sell anything so our "conversion rates" have never been about making a sale anyway. We do use personas and then at that point we do think about what we want those personas to be able to do. A career seeker would be considered to have converted if they accessed our job database or submitted a resume, for example. That is what we have called "conversion rate" from the beginning. There is a bit of a difference in that we still ask, what do we want them to be able to do, instead of are they completing the task they came to do.
As always, an avid reader!
Kathy
Hi Avinash,
Excellent post and a lot to think about here; I also read the comments which were also very helpful.
I have found that a particular metric – conversions / task completions are best defined in partership with the site owners – just as keywords for your pages need to be defined by the site owners/stakeholders in partership with your SEO/SEM person.
The ability to segment your visitors in ways that are meaningful to your site is probably the most important step prior to measuring the conversion (ie: segmenting by intent or segmenting by industry, etc). If we can figure out who the visitor is and what segment they belong to – then what we'll call the conversion or task completion comes into view.
I'll see if I can write a post on this tonight on Webmetricsguru.com; pulling in my own experience and ideas. One thing I'd like to see dealt with is the effects of Multi Channel Conversions (as I wrote about in http://www.webmetricsguru.com/2006/07/measuring_multi_channel_market.html ).
I'd be curious to see what weight is put on the various points that lead to a conversion – in this case awareness that leads to seeing a movie.
Hey, Avinash — great post as usual! But I like it when you share this with everyone in the Web Analytics Forum, too!
My goal is to try to measure conversion along the funnel between each step of the customer lifecycle: unaided awareness, awareness, positive perceptions, consideration, intent, customer, satisfied customer, loyal customer, and advocate.
Of course, these can be combined into fewer steps, and measurement is always problematic, but just the act of thinking about the customer's lifecycle in these terms has been helpful to us (even when we violate what you and others said at eMetrics — sometimes we measure things even though we can't make decisions based on them, d'oh!).
What do you think?
Wandering Dave
Great post and great comments.
Avinash, would you say that it would be a valid approach to try and understand visitor intent by looking at referring keywords? I.e. perhaps have some kind of "bucketing" mechanism whereby you would group such keywords according to visitor intent? So, keyword "buy Canon sku xyz" might go in the "Sales prospect bucket" whereas "review Canon" might go in the "Browse/research" bucket. And once you have those buckets in place you can then start addressing the needs of those different types of visitors.
Cheers,
Michael Whitaker
In response to the last post by Michael Whitaker – there's been a lot of work done to qualify search queries by intent. IBM has done a lot of that work, and Bill Hunt and Mike Moran cover it in SeoINC, their search marketing book published by IBM Press.
The problem, as I see it, is to scrape all of your query logs and segment the search terms by the categories that are meaningful to your business. You might actually have to go several thousand terms deep (ie: in Surfaid – now CoreMetrics) you can go down 50,000 deep for a background report. If there was a way to write a program that would take your query log and segment it into say…..LEARN, SHOP, or BUY….and then tie it to the pages the searcher landed on …. you'd have something very intersting to look at.
That would be a major program – and has yet to be written.
WDave Rhee: One should always "play" with the data and experiment and if in the end we don't make any decisions we chalk one up for Lady Experience. :)
I apologize for not completely understanding the concept of conversion between steps of the funnel and being unable to reply.
But your thought on measuring different stages, lifecycle, is absolutely the right thing to do. I was in a presentation at another company yesterday and saw them use the lifecycle: Learn, Shop, Purchase, Support. Very focussed, targetted and helpful.
My caution would be not to infer any kind of "conversion" from a page view. So "you come to my site, we detect you don't have a cookie, you saw the page for Gateway NX100X, you exit and so you are in the intent or consideration bucket."
Potentially that would be sub optimal. There are alternatives to measuring if people who are truly "consideration" are moving along the life cycle and I would recommend some non-web analytics options.
Hope this is helpful. Thanks so much for taking the time to comment, it is clear you are doing some great stuff at Gateway.
Michael W: Your idea is fantastic. Marshall has pointed out one caution in his reply to your comment, how do you deal with volume (this is specially true in big companies like IBM).
But for many websites the tail is really long but in reality around 10 to 15% of keywords represent a majority of the traffic, in which case your idea will work perfect. The challenge, IMHO, is to find enough keywords in our top 10% where we can attribute intent because mostly traffic is driven by generic brand and category terms (which makes is harder to attribute intent).
You could go one better, if you have a truly dynamic platform, say like we have with ATG, it can detect that you came on "buy Canon sku xyz" and the platform can change content on the page to be a bit more targeted to what you need. So you don't run around creating landing pages (and I am not implying that you do :)), the page stays the same, content changes on detection of intent as defined by you for keywords.
Thanks for commenting, that was a great suggestion.
Hi Avinash and other commenters – very interesting posts! I have always thought of a conversion as "the site visitor doing whatever it is you want them to do" (and this could be purchase, download, or offline action, or something more brand-awareness oriented), but I have never thought of it as "the site visitor doing whatever it is THEY wanted to do." (It sounds strangely altruistic!)
What I love about this is that it expands the "conversion" concept to include people like learners, who are in the research stage of a process. However, I guess my concern would be that if you can't tie the happiness of the learners back to the Bottom Line (ie, earnings for your business) in more than just a theoretical way, then it's going to be hard to use these metrics to justify spending or make budget-based decisions.
This may also be a case of people being a bit afraid of knowing the truth about their website- ie, that a large percent of the visitors may *never* be paying customers!
Gradiva
http://www.yourseoplan.com/
I've been reading your articles- great stuff! However, I'm trying to understand what is a good conversion % of impressions clicked? Any suggestions on how to build that higher and with more traffic so when I get that 2.2% sale conversion it didn't take me 6 months for the ppc traffic of 100 clicks?
Purrinlot: I am not sure of a easily available benchmark.
But my recommendation is that you benchmark against yourself, i.e. are you getting better over time? It is not perfect but atleast something you can use.
The other idea in your specific case to improve conversion is to ensure there is "scent" between your ads / impressions and your landing pages. This is one of the biggest causes of low conversions (and high bounce rates) – ensure that your ads are "not writing a chq that your website cannot cash".
To improve that you might already be using something like the Google Website Optimizer to do a/b or multivariate experiments. It takes only six and half minutes to set up a a/b test and it is one of the best ways to improve conversion rates.
More here if you are interested:
Experimentation and Testing: A Primer
Build A Great Web Experimentation & Testing Program
Hope this helps a little bit.
-Avinash.
I think you have hit on an important and often overlooked factor that there are multiple types of "conversions". The goal is for users to be able to get the information that they are looking for, whether they are a buyer right now or not.
Of course, if they are a buyer, we want to convert them. :)
Thanks again,
Vi Wickam
http://www.PrincipalWebSolutions.com
This is exactly what i'm talking about. You have made clear that seo is pointless if your website does not convert…Great blog! Better than mine.
Hi Avinash,
Great Blogpost! I read your book the other day, because it's compulsary reading at my study and i must say its great!
Based on your book we must write a Online Strategy for our company and i'm now trying to find out some more in-depth info about some pragmatic metrics like "task completion rate" and with which tools to measure it.
Thanks for this post and keep publishing please!
Wow! Thanks for writing this article, this has given me some new incentive and ideas, Thank you! LT
Even though this is a really old post I feel that this is still very apt. I think this makes great sense for companies whose main objective is to measure how much and what they sell. Although its equally important to measure the task completion rates for the visits whos intention is not to buy.
Do you have any recommendation on how you would identify the visits who do not have an intention to buy?
Raghu: One simple strategy would be to use Site or Page level surveys to measure Primary Purpose. That should help understand why Visitors come to your website. From that isolating the "no intention to buy'ers" is but a small step.
For one method see this post:
~ 4Q – The Best Online Survey For A Website, Yours Free!
See the reports on that page.
Avinash.
Such a great post Avinash, even four years later! I came to this one after your post on microconversions. Now I just have to convince the team to abandon conversion rate, which, unfortunately, I convinced them to adopt. Learn. Change. Rinse. Repeat.
Thanks Avinash for this post.
I'm moving my company to this direction. Stop looking at the conversion rate and looking more and more to the conversion rate of what I call my "qualified visits" for more info on this please refer to my post: bit.ly/eW3Tq8
Thanks again! Loic
Hi man,
As the responsible of CR and UX for my company, I think you definitely have more than a point, but with this fire you made a huge mess on terminology. How could you say that focusing on Conversion leads to sub optimal users' experiences, when tweaking the CR is the process of improving UX based on real user data!
I think this article is referred more to all these wannabe guru online than to real CR, but you made your point really well Avinash.
Hello, Avinash! You have got quite an angle here and this is the first time I have read something like this when it comes to conversion rate niche.
You got me with the "Obsessed" bit in your title, and although I am quite confused, I do see and quite get where you are coming from, although you cannot really stop owners from obsessing about their conversion rates as one of the biggest telltales of their businesses' health.Your article did give me something to think about.
I know that there are just fundamentals things you need to do in order to make sure that you get a continuous stream of conversion, and one of that is ensuring that your website is fast when it comes to loading time and that you can offer the best user experience possible.
Another article that I can recommend on how to improve one's conversion rate is this one. This one cited Spotify's massive success on converting their trial users into loyal customers.