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Why Conversion Rate should be your numero uno KPI?

English: Window shopping in Cowbridge These la...

English: Window shopping in Cowbridge These ladies are making use of the umbrella on a damp March afternoon in Cowbridge. (Photo credit: Wikipedia)

Conversion rate is defined as the goals converted per unique visitor. I use unique visitor and not unique visits because i do not believe in the fact that every time someone visits your website that he/she is there to buy.

Most visits are just for browsing like window shopping. People come, check out the stuff and move on. But yes, what really matters is the fact that how many goals are getting converted and how many people are involved. The total no. of cumulative goals matter not the no. of people.

For e.g your website has 100 unique visitors, and every visitor can do two things i.e two goals; 1: subscribe to emails and 2: buy something. Lets assume out of the 100, over the period of 1 month 25 did nothing, 50 just subscribed to emails, 15 bought one item and 10 bought more than one item and out of the 25 who bought something 15 also subscribed to the emails. There total no. of unique visitors who did something was 75(50+15+10) but total no. of goals converted was 90, therefore your conversion rate will be 0.9(50+15+10+15) and not .75!

Though it might be a little confusing because only 75% of the people did something the figure is showing a higher number, but then what really matters is the goal conversion and not visitor conversion because there might be people who might have landed on your website randomly!

It is always better to follow the marketing theory rather than the sales theory…its more about understanding the consumer, his/her requirements and higher levels of engagement(goal conversions) rather than simply pushing every person to buy!!

See the figure below for easier understanding:

No. of Unique Visitors Did Nothing Subscribed to emails Bought only 1 item Bought more than 1 item Bought items+ subscribed to email Conversion Rate
100 25 50 15 10 15 0.9

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