July 30th, 2009 | 3 MIN READ

A Better Way to Measure Conversion Rate

Written by author_profile_images Linda Bustos

Linda is an ecommerce industry analyst and consultant specializing in conversion optimization and digital transformation.

It's been a while since we discontinued the Friday-link-list we used to call Blogger's Digest here at Get Elastic. Blogger's Digest was a collection of the week's essential reading for ecommerce fans from around the blogosphere. In the spirit of Blogger's Digest, I'd like to point out a post that is essential reading for anyone who measures a website conversion rate.

Multichannel savant and President of MineThatData, Kevin Hillstrom, shared his method of measuring conversion rate across time. The idea is to segment visitors based on their site engagement:

  • Homepage or Landing Page Visit Only
  • Multiple Pages Visited
  • Shopping Cart Abandoned
  • Purchaser

Wouldn't you like to track whether the customers who didn't purchase eventually purchase the following month, or at least move toward conversion -- like return to the site, view more products, add products to cart, or place an order? Would you like to know how many purchasers buy again in the next 30 days?

Kevin's method maps your segments with their possible future behaviors:

  • No Return Visit
  • Homepage or Landing Page Visit Only
  • Multiple Pages Visited
  • Shopping Cart Abandoned
  • Purchaser

Here's an example grid of one month's site behavior by segment, where segments are established the previous month:

As Kevin points out, understanding customer behavior overtime gives you some context around your site metrics.

"If you know that customers who abandon a shopping cart are unlikely to come back to your website, then shopping cart abandonment is a REALLY bad thing. If you know that two-thirds of the visitors will come back over the course of the next thirty days, well, you think about abandonment with a little bit less fear."

From a targeted selling perspective this information is also valuable. If you knew that 13.7% of customers who abandon their carts will return and abandon their carts once more, you can set up rules to identify these customers (through cookies or authenticated [logged-in] session tracking) and target them strategically. If your goal is to reduce the re-abandonment stat while boosting the conversion for this segment, you might offer a live chat prompt to this type of customer (reserving your precious live chat resources for those most likely to need it). Or you may offer an incentive, a discount or free gift with purchase -- time limited.

Further segmentation of your data is also useful. What if you discovered a high percentage of customers who abandon their cart are international visitors, spooked by the high shipping charge or unable to complete purchase because of shipping restrictions. You can segment out these visitors and concentrate on the conversion rate that matters -- your domestic market.

It's worth the time to wrap your head around segmentation. It can lead to a better understanding of your customer and more intelligent marketing activities to maximize your conversion rates and revenue.

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