Site Wide Conversion Rate Is A Pretty Crappy Metric

When you look at your site wide conversion rate, what does it tell you? What action does it inspire? What would you do differently if your site had a 1% conversion rate versus your site having a 3% conversion rate?

The answer to all of those questions is that there is no action to take. There are too many things that can happen in between a visit and an order for conversion rate to be a good gauge for what to do next. There are so many factors that can swing site conversion rate—amount of marketing investment, price of products, seasonality—that the metric has become as un-useful as looking at impressions to gauge online marketing success. (Looking at conversion rate to optimize marketing channel can be beneficial because it is tied to two actions that can be manipulated off site – marketing investment and marketing message.)

Instead of conversion rate, how about using these metrics: Basket Rate (carts/visits), Checkout Rate ( checkouts/carts) or Checkout Conversion Rate (orders/checkouts). As opposed to conversion rate (visits/orders), each of these metrics is tied closely to specific actions that are both necessary to purchase and improvable.

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