Conversion Metrics: Not just for E-commerce
Acquisition - Conversion - Retention. No matter what type of website you are running, any marketing or communications strategy you have in place for your organization will be focused on these activities. Well, at least it should be. Making sure you are measuring the proper metrics for each will be critical for effective decision making. Whether you are the VP looking to drive strategy, or marketing program managers or product managers looking to drive demand generation, or sales, or you are trying to A/B test designs or click-paths, you should all be looking at some version of conversion metrics for decision making.
Some may not be familiar with these terms - or need a refresher - so it's definition time. Stay with me if this is something you live with every day.
- Acquisition - the activity surrounding bringing new (and returning) visitors to your website through a variety of methods that could include: online advertising (i.e. Display, Pay per Click), Social Media, seo, linking, smoke signals, etc. Anything that creates awareness of your website or the products and/or content within and brings people to your site.
- Conversion - the event or action that occurs on your website that evokes some element of success in the eyes of the people who built it. It could be as simple as signing up for a newsletter, or as committed as making an actual purchase, or somewhere in between. Conversion will look different for your organization's site based on its purpose. The cool thing about conversions, and the activity that happens before them - is that it helps you understand what type of behaviour your ideal visitor has on your site as they make their journey from start to finish - and repeat if lucky.
- Retention - the activities and content that you have put in place to support an ongoing relationship with this visitor you spend so much energy bringing to your website. Retention depends on many things - did you deliver on what you promised (something Google search looks for to determine if it did a good job in delivering value to its search engine users) - did you delight the visitor when they were on the site - did you give them a reason to stick around or come back on a regular basis - does your offline activity reinforce the values that brought someone to your site in the first place so they will return.
Many of you will have heard (starting back in the bricks and mortar days) it costs twice as much to acquire new customers than it does to retain or keep existing customers. The same goes for online - visitors, followers, donors, customers...
This post is focused on conversion metrics, but the metrics that address acquisition and retention, are as important to look at when understanding the performance of your activities and the website at the centre of it all.
From a measurement perspective, what should your organization be looking at with regard to measurement and analytics? Here are eleven conversion metrics I like to keep track of - and use to support the work the different members of the team do so the website is successful. Remember that these metrics are important from the technical as well as product and marketing perspectives. They can be as much a sign of the demand for your offering - as they can for the technical effectiveness of the website - or the way the offering is communicated or marketed. Note that these are higher level metrics - each has many layers of deep dive on click intentions, actual clicks, hovers, etc. that your technical team will use to understand - technically - what is working and what isn't.
- Conversion Rate - what percentage of your visitors complete a transaction or take the action that you are tracking for. This rate can be influenced by a number of metrics that will be indicative of how well your website is performing for you and your audience. This, in many cases, is all about your specific business or organization and not always transferrable.
- Traffic Source - how many visitors are coming from organic or paid sources and how are these different sources influencing the rate of conversion.
- Visitor Type - new vs returning visitors behave differently for different types of sites so knowing who you need to target to improve conversion is important.
- Device - if your website is not mobile optimized, but you attract a high percentage of mobile visitors, your conversion rate will be negatively affected.
- Search Keywords - what are search engine visitors that are most likely to convert, looking for.
- Conversion Rate by Campaign Type - which campaigns are converting at a higher rate than others.
- Value per Acquisition Type - which acquisition type brings in the most value (this may not necessarily be the best conversion rate as some channels may be more effective at bringing in higher value donors or customers.
- Cost per Conversion - similar to the conversion rate above - what is the total cost of converting new vs returning visitors. This helps keep your retention spending in line with the potential revenue upside - or chance of a visitor taking the ultimate action you wish.
- New Visitors
- Returning Visitors
- Value per Visit - if a monetary value can be derived on your website - what is the total revenue for a time period divided by the number of visits. This can be either all visits - or only those where a transaction is completed.
- Value per Customer - what is the average sales or donation value for each customer or donor. Total amount collected or sold divided by number of donors or customers.
- Value per Acquisition Source - which source of new visitors, brings in the most revenue. Simple. The next step is ROI - total value divided by cost of each source.
- Cost per Retention Revenue - how much does keeping a repeat customer or donor cost on a per transaction basis - or for each dollar earned.
- Coupon Redemption Rate - using discounts and coupons are a great way to bring new and returning visitors to your site to complete a transaction.
- Conversion Abandonment - what percentage of visitors who start a purchase or donation or sign-up or other type of conversion - abandon it in mid-process. For e-commerce, this is generally called 'Shopping Cart Abandonment'.
- Social Sharing Conversion Rate - what percentage of business comes from friends and social network sharing. This is an important metric for a site I work on where we know that visitors coming from friends that share links (through email) - generally convert at a higher rate than any other visitor. Knowing this, means we are constantly trying to improve this function on REALTOR.ca.
There are many other metrics that relate to the different aspects of conversions that can be considered, but these cover the important ones in my opinion. As you can see - most of these call all be applied to both e-commerce as well as other types of sites for charities or government or real estate portals, etc.
What conversion metrics are you tracking for your website? Please let me know if you have any questions or comments. Thank you.