Why Average Isn't Good Enough

Conversion rate optimisation is still a relatively new concept to many website owners and businesses. Although the actual definition of CRO is fairly well understood, it is worth looking a little closer at the term and what it really means when it comes to analysing performance.

You will often read that the conversion rate of a site is arrived at by simply dividing the number of actions by the number of visitors. The truth however, is that there is no such simple, 'catch-all' solution to working out an actionable conversion rate - only by segmenting your data before doing this final calculation can you get the true picture.

The more context you can add to your numbers, the more valuable and meaningful the conversion rate you are looking at becomes.

To explain this a bit further, let's outline some basic scenarios:

Driving Growth:

For any relatively new business, one key objective is to increase the number of people you introduce to your service who subsequently become customers. In the truest sense of the word, this is 'converting' visitors into customers.

Only by splitting out new visitors from returning visitors in your analytics package will you be able to analyse the relevant behaviour. From here you can use this segmented data to look for behaviour which hints at any obstacles to conversion and effectively plan to improve the conversion rate.

Making The Most Of What You've Got:

On the other hand, a large established company would be wise to leverage the potential value of its existing customer base. Segmenting for return visitors and visitors coming to the site either directly or on brand searches would give a better picture of how this particular user type is behaving. Looking at the conversion rates of this segment, along with other data such as content viewed, would provide the insight needed to create a strategy to increase engagement (through such techniques as up/cross-selling and email marketing).

From these two examples we can see just how essential it is to segment your data and how doing so gives you the context required to add meaning to your analysis.

Tailoring Your Strategy:

The key thing about understanding how conversion rate should be viewed, is that if you are interested in making improvements or are already in the process of optimisation, the metrics for these segments should dictate how you approach the problem - You should be making a strategy for each definable segment you can find in your traffic. By doing this you will be able create an effective conversion strategy for each group, focusing time and effort on achieving the results that are key to your business.