What Are You Converting?

When most people think of "conversions," they think of large-scale or "macro" events, such as product sales or sign-ups for a service. Those are one kind of conversion, but there are many more events that fit the definition as well.

In fact, most conversion actions are incremental micro-events that reduce friction and allow a visitor to continue moving toward your ultimate desired outcome. That outcome may not occur during their current visit -- it may be delayed for months, or even years. The key criterion for defining conversion actions is that they must be measurable and have a clear value.

Examples of conversion actions along with their measurement and efficiency metrics follow:

Advertising: This includes advertising online, such as banners, text ads, and sponsor links. Measuring advertising effectiveness usually involves tracking the number of times that an ad was seen or clicked on. Another measure is the average advertising revenue per page view for alternative ad page layouts.

Click-through: Only a few parts of your Web site are mission-critical. A click-through can measure the effectiveness with which you funnel visitors to the desired actionable pages, and through the conversion process. Click-throughs can serve as intermediate gauges of progress. The CTR is the percentage of visitors who click through to a desired page.

Education: Some Web sites have ultimate conversion steps that require a lot of up-front education. They provide resources and online guides to fully explain their products and services. If education of visitors is your primary goal, the key metrics are the time spent on your educational pages and the number of page views.

Downloads and printouts: Many Web sites want visitors to take away free content without having to leave behind any personal information. Visitors may be able to download and print (where applicable) any number of items from your site: whitepapers, coupons for offline redemption, samples, or computer software. The download or printout rate of the desired content is the best measure of efficiency.

Form-fill rate: Often the conversion goal involves gathering data about the visitor. This can range from a minimum of data (e.g., asking for an e-mail address for sending future e-newsletters), to full disclosure involving a lot of personal information (e.g., a lengthy online application for a mortgage loan). Regardless of the length or complexity of the form, the form-fill rate is used to measure the efficiency of this process.

Purchase: Many companies measure sales efficiency by looking at their sales conversion rate (the percentage of unique visitors who complete a purchase), or their shopping cart abandonment rate (the percentage of people who start the checkout process but never finish it). In many circumstances, the revenue per visitor and profit per visitor are more useful metrics.

For example, if you sell multiple products at widely varying prices, you can bias the mix of products that you sell intentionally. This may mean that you choose to lower your sales conversion rate to focus on higher-ticket items. Conversely, you may seemingly raise your sales conversion rate by emphasizing smaller-ticket items.

The merit of the trade-offs involved in such situations can be evaluated by focusing on the revenue-per-visitor metric. Measuring revenue instead of conversion rate can help you make these trade-offs properly.

If the products you sell have different profit margins, the revenue-per-visitor metric can be deceiving. This can happen when you boost your revenues by selling very low-margin or even unprofitable loss-leader items. It's possible to boost your revenues while actually lowering your overall profits at the same time.

A more sophisticated metric for such situations is the profit-per-visitor. Instead of assigning the full revenue value to the sale conversion action, you use only the profit margin on the sale.

Multiple actions: The situation is more complicated when multiple conversion actions are involved. For example, your site may sell a service, offer a free trial, and have a sign-up form for a free newsletter (which may eventually lead to future sales). These three conversion actions are all appropriate, and roughly correspond to a visitor's position in the buying cycle. It's important to track and measure each of them. By assigning a dollar value to each action, you can see if your overall profit-per-visitor increases.

Sometimes visitors must make a mutually exclusive choice. For example, they may choose to fill out your information request form, start an online chat session with a customer support representative, or pick up the telephone and call your toll-free number. All three advance your agenda, and allow visitors to select the most appropriate response medium for them.

So as you can see, a conversion can be much more than the common, limited definition allows. When you're looking to measure success on your site, remember that conversion actions are any events that move a visitor toward the mission critical activities that you've identified. Measure those smaller events, and you'll know much more about what your visitors are doing than if you only focus on the end results.

Tim Ash is off this week. Today's column ran earlier on Search Engine Watch.

About the author

Tim Ash is CEO of SiteTuners.com, a landing page optimization firm that offers conversion consulting, full-service guaranteed-improvement tests, and software tools to improve conversion rates. SiteTuners' AttentionWizard.com visual attention prediction tool can be used on a landing page screenshot or mock-up to quickly identify major conversion issues. He has worked with Google, Facebook, American Express, CBS, Sony Music, Universal Studios, Verizon Wireless, Texas Instruments, and Coach.

Tim is a highly-regarded presenter at Search Engine Strategies, eMetrics, PPC Summit, Affiliate Summit, PubCon, Affiliate Conference, and LeadsCon. He is the chairperson of ConversionConference.com, the first conference focused on improving online conversions. A columnist for several publications including ClickZ, he's host of the weekly Landing Page Optimization show and podcast on WebmasterRadio.fm. His columns can be found in the Search Engine Watch archive.

He received his B.S. and M.S. during his Ph.D. studies at UC San Diego. Tim is the author of the bestselling book, "Landing Page Optimization."

Read more of Tim Ash's columns at ClickZ.