Conversion Rate: Why I Disagree With Avinash And Matt Jacobs

August 02, 2006
By Robbin Steif

Recently, Avinash addresed how we should stop obsessing about conversion rates, and today, Matt Jacobs put another nail in that coffin. And while both posts are excellent and I read the blogs religiously, I am not ready to bury conversion rate because most customers are just starting to understand them.

The concepts that Avinash and Matt put forward are wonderful. Let’s measure conversion rate by intent, Avinash says. Did they just come here because they needed customer service info, for example? If so, why are we including that customer in the denominator when we computer conversion rate? Matt points out that conversion rate is only one success metric and perhaps a poor one at that. He does a great 2×2 matrix on the cost of acquisition vs cost of retention of a customer and I think the point is, each quadrant’s conversion rate should be looked at separately. (He is dying to add a third dimension, profitability, but doesn’t understand that all of business is a 2×2 matrix. )

But the concepts are hard, the measurements are sometimes impossible to get, and most customers just aren’t there mentally and emotionally. OK, maybe Intuit is there and Lands’ End is there and Amazon is there but most website owners are saying, “Web Analytics, now, do I have those?” And when they have them and care, they say, “Now how do I use these?” And then you teach them basic concepts like conversion for all customers (“Oh gosh,” they say, “99% of people leave without buying?”) After that, you teach them less basic concepts like conversion by marketing channel, for example. (“Oh gosh, when the customer comes directly go my site, they buy 5% of the time, ditto for when they type my company name into Google, but when they come in on a Google AdWord, they only buy 1% of the time?”) And finally they might be ready to look at conversion by intent, but you still have to figure out what the intent is.

If the visitor only looks at customer service pages, like “How to fix your HP printer,” do you think their intent is to fix their HP printer? You bet it is, no matter how many web analytic seers say that pageviews are a lousy measurement. But if they read all your whitepapers and they listen to your webinars, was their goal to educate themselves about your industry or to learn about your product? I’m not sure and if you are, I’d love to hear from you.

So while it’s a great idea, taking conversion rate to a really high level and segmenting by intent, I’m not jumping up and down with excitement. That’s because customers are way behind web analysts and even when they are right by your side, intent is still hard to measure. Maybe impossible.

Robbin Steif
LunaMetrics