Omniture Summit 2010 – Is Measuring Your Conversion Rate Pointless?
Last week saw the return of the Omniture Summit EMEA at the Hilton Metropole hotel, London. Following the success of last year’s summit for Logan Tod & Co we followed in a similar vein, as Gold Sponsors, meaning that we have our own booth in the sponsors showcase AND our CEO, Matthew Tod, gets to entertain a room full of delegates in one of the break out sessions.
This year we invited client Martin Smith from Premier Inn to join Matthew on the stage. The topic this year: Is Measuring Your Conversion Rate Pointless? As always Matthew kept the room alive with stories such as one from the Logan Tod early days, when a typical day consisted of a 999 call to the office with a client in panic mode because “their conversion rate had dropped 0.5%!” Cue Matthew, briefcase in hand, off to said client’s office to try to work out why this terrible event had occurred!
Eight years on, and over 150 clients later and Matthew’s presentation at the summit gave a slightly different picture…
1. The secret life of the average conversion rate
The Secret Life of the Conversion Rate
This chart demonstrates that the Average Conversion Rate is impacted by too many factors to make it useful. This slide prompted a few funny tweets!
2. Average Conversion Rate masks good business results, for example
Average Conversion Rates mask good business results
In this example the average conversion rate is the WORST descriptor of the success of this online business! So why are we still measuring it?
3. Matthew showed that your Average Conversion Rate is useless for benchmarking by using the Comscore Top converting sites data.
4. The growth in internet access is adding to the complexity of tracking and making conversion rate even less useful
The growth in access is also adding to the complexity
This chart demonstrates that the growth in multi channel purchasing journeys means that conversion rates cannot reflect consumer behaviour.
5. So Conversion Rate has no diagnostic value when looked at in isolation.
But it’s not all bad news. Whilst there’s no other single better metric Matthew went on to describe ways in which you can use some approaches which will help:
- Use your web metrics to support the fundamentals of acquiring more customers and generating more revenue from existing customers
- Micro conversion rates are useful if they can be managed and improved
- Compare your Average Conversion rate to your “No-Change Conversion rate to see the real difference you are making
The presentation ended in a lively debate with the resulting conclusion that your average conversion rate is not a valid KPI; there are just too many issues to make it useful as a standalone metric and there is so much more you can do that is more impactful!
