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Why You Should Not Focus Your Website Goals Around Conversion Rate

Dustin Drees  |  April 22, 2016

Dustin Drees  |  April 22, 2016

        

“What is your conversion rate?”

“What should my conversion rate be?”

“My goal is to double our conversion rate.”

These statements are typical of the conversations I hear about conversion rate optimization (CRO), both in the industry and with clients. But I don’t like these statements and I wish this service wasn’t cataloged so narrowly around conversion rate optimization. Because in this context, conversion rates actually tell us little about the performance of your website. 

Here is a better question: which conversion rates are you currently measuring and improving?

This offers much more telling information, because now we can discuss exactly what you’re measuring. Indeed, your conversion point could be capturing a lead, and you might have another conversion point for turning those leads into customers. Or maybe you’re measuring conversions of visits to sales. And what about return visitors to sales? There are any number of points to measure the conversion rate on your website.

And did you notice what was missing in that statement? There was nothing about focusing your conversion rate on a set goal.

If you haven't read Paul Randall’s recent Decibel Soapbox article about the danger of averages, you should. In it, Paul describes how averages hide outliers that can skew your insights from data.

Understanding the danger of evaluating averages is very important when doing CRO – and, without segmenting, your conversion rate is just an average. This means you will not only have a hard time suggesting improvements, you will also struggle to achieve the goals that matter.

Here is a useful technique I use to illustrate this problem with clients. Take a look at your standard conversion reporting and find a segment that is highly relevant to your site. Often this can work with something as simple as applying the country you do the most business in as a segment, like this:

Dustin_metrics_drop_compressed.jpg

BAM! I just improved this site’s conversion rate!

However, this “improvement” had zero impact on revenue – and, ultimately, we want to grow revenue. The trouble is that standard reporting assumes all traffic is convertible. That is not true for anyone. No matter what we do, there is always traffic we can never convert.

To illustrate this, consider the impact to our conversion rate in the example above, if we suddenly received a spike of traffic from a non-US audience. We would quickly see our conversion rates going down, but our revenue would hold. In this moment, it would be crucial for you to not be watching your conversion rate as an average, so you can understand what is happening on your site.

Conversion rate is an important metric to track, but it is easily prone to manipulation from forces both internal and external. Because of this, it is not the right metric to set long-term goals around. To measure how well you’re growing your sites, goals should focus around revenue-driven numbers, for instance improving Average Order Value (AOV) and Revenue Per Visitor (RPV).

Having said that, conversion rate is a fantastic signal to identify opportunities or weaknesses on your website. Find those signals and follow them. Do they present an opportunity to test and improve? Or do they highlight a portion of the traffic you should stop investing in? Monitor the right conversion rates for your site – the ones that not only impact revenue, but also illuminate how and why that impact was made.

And when you do that, you are no longer narrowly focusing on conversion rate optimization. Instead you are using conversion rates as a tool for what you should really be doing, optimizing growth. 

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Do you agree with Dustin that you shouldn't base your website goals around conversion rates? Let us know in the comments below – or join the conversation on Twitter with the hashtag #DecibelSoapbox.

Alternatively, if you'd like to explore conversion optimization further, then be sure to check out Decibel Insight's comprehensive free guide. It's packed full of industry insight, techniques, and expert advice. Hit the image below to download it now!

Turn your website into a conversion machine

Dustin Drees

Written on April 22, 2016 by:

Dustin Drees

Growth Optimization Expert at Market8, and runs I Should Have Been an Astronaut.

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