Conversion Rate: Why I disagree with Avinash and Matt Jacobs


Recently, Avinash addresed how we should stop obsessing about conversion rates, and today, Matt Jacobs put another nail in that coffin. And while both posts are excellent and I read the blogs religiously, I am not ready to bury conversion rate because most customers are just starting to understand them.

The concepts that Avinash and Matt put forward are wonderful. Let’s measure conversion rate by intent, Avinash says. Did they just come here because they needed customer service info, for example? If so, why are we including that customer in the denominator when we computer conversion rate? Matt points out that conversion rate is only one success metric and perhaps a poor one at that. He does a great 2×2 matrix on the cost of acquisition vs cost of retention of a customer and I think the point is, each quadrant’s conversion rate should be looked at separately. (He is dying to add a third dimension, profitability, but doesn’t understand that all of business is a 2×2 matrix. )

But the concepts are hard, the measurements are sometimes impossible to get, and most customers just aren’t there mentally and emotionally. OK, maybe Intuit is there and Lands’ End is there and Amazon is there but most website owners are saying, “Web Analytics, now, do I have those?” And when they have them and care, they say, “Now how do I use these?” And then you teach them basic concepts like conversion for all customers (“Oh gosh,” they say, “99% of people leave without buying?”) After that, you teach them less basic concepts like conversion by marketing channel, for example. (“Oh gosh, when the customer comes directly go my site, they buy 5% of the time, ditto for when they type my company name into Google, but when they come in on a Google AdWord, they only buy 1% of the time?”) And finally they might be ready to look at conversion by intent, but you still have to figure out what the intent is.

If the visitor only looks at customer service pages, like “How to fix your HP printer,” do you think their intent is to fix their HP printer? You bet it is, no matter how many web analytic seers say that pageviews are a lousy measurement. But if they read all your whitepapers and they listen to your webinars, was their goal to educate themselves about your industry or to learn about your product? I’m not sure and if you are, I’d love to hear from you.

So while it’s a great idea, taking conversion rate to a really high level and segmenting by intent, I’m not jumping up and down with excitement. That’s because customers are way behind web analysts and even when they are right by your side, intent is still hard to measure. Maybe impossible.

Robbin Steif

Our owner and CEO, Robbin Steif, started LunaMetrics twelve years ago. She is a graduate of Harvard College and the Harvard Business School, and has served on the Board of Directors for the Digital Analytics Association. Robbin is a winner of a BusinessWomen First award, as well as a recent Diamond Award for business leadership. You should read her letter before you decide to work with us.

  • Avinash Kaushik

    Robbin: This is a great perspective and I agree with the challenge you highlight for customers.

    I’ll put forth two points of view from that particular blog post:

    1) The emphasis is to stop obsessing on conversion rate. If we drive our companies or life by conversion rate we are only solving for short term revenue and that is not how companies become magnificent.

    2) Measuring intent is easier than we imagine. At least getting started is, I suggest the exact question to ask in my blog post.

    Finally, I am careful not to say that conversion rate is sub-optimal. The emphasis is not to obsess about it. To highlight my “commitment” 🙂 I followed up my “don’t obsess” post with this one:

    Excellent Analytics Tip#5: Conversion Rate Basics & Best Practices

    Thanks again for taking the time to provide this real world perspective. I appreciate that very much (as I am sure do your other loyal readers like me).


  • Anonymous


    I’m not sure what is meant by, “He is dying to add a third dimension, profitability, but doesn’t understand that all of business is a 2×2 matrix.” Hoping you can expand on that a bit…

    My contention is that conversion rate actually doesn’t matter in any of those quadrants for the things I listed that I’m often tasked with (as many consultants are held to, since they must show results).

    Conversion rate is essentially meaningless at the end of the day against those objectives, and those objectives are quite different from the “mid funnel” task completions Avinash spoke to.

    The third dimension, profitability, is mission critical. If you don’t look at profitability in each of those quadrants when tasked with those objectives, you are failing outright.

    Strong words?

    Perhaps, but I challenge anyone tasked with those goals to prove that optimal results for a company’s bottom line can be accomplished without profitability in that 2×2. I’ve seen plenty of people try….

    They have a 100% failure rate.

    The horrific part is that I’ve seen people use conversion rate in their attempts, speak to it at conferences (I usually get their clients shortly thereafter), and others even preach about it as Avinash pointed out. They learn the hard way – as many of us have done in web analytics – and I think there’s value in that, so long as they’re not disrupting a company’s bottom line in the process. When you’re tasked with the bottom line, conversion rate isn’t your answer. It might be a metric along the way, but that’s about it.

    I agree with the attitudinal bias you mentioned – especially with regard to “intent” and “likelihood.” That’s an area where the vast majority of web analysts lack experience but desperately need more…

    Matt Jacobs

  • LunaMetrics Blog

    Avinash: OK, the question you suggested was, “Why are you visiting the web site today?” The statistical bias is enormous because only the people who are interested in answering will answer. And even those who answer won’t necessarily answer truthfully. And where do you ask that question — on the thank you page (the better not to interrupt the sale? But of course not, most of those people probably have the intent of buying, so it begs the question.) As a popup on the second page they navigate to? (yuk). Alan Montgomery, a professor of clickstream data here at Carnegie Mellon University, works in the area of passive web analytics and he posits that you can learn a lot more about intent from what people do than from what they say.

    You really make a lot of good points , but I would be delighted to see some companies (even big public companies) start to drive websites by conversion rate. Instead, they are driving their websites by number of visitors. Or worse yet, they drive them by visits, think they are unique visits, and call them “hits.”

    Matt — I went to a b-school where they only teach in 2×2 matrices. I always forget that not everyone gets the joke, i.e. only business school profs think that the world is that simple.

    Your post is very interesting now that I finally understand it. I wish you wrote more often.


  • Jacques Warren

    Hi Robin,
    In my case, I solve the theoretical/philosophical question by watching two numbers: the general conversion rate, just so that I have an idea of the general output of a site (while clearly understanding that NOT everybody is there to “be converted” on each particular visit), and the more important process conversion rate (the % of visits where some stronger will can be deducted from the level of engagement (say, “add to shoping cart” and so on)).
    As a consultant myself, I totally agree with your approach that respects where clients are at. I have been involved in Web marketing for over 10 years, and I know it doesn’t “pay” to be 5 years ahead of what the market can integrate in its day-to-day practices. So, OK, we can debate the intrinsinc values of conversion at length, but it’s a darn good heuristic concept for now, and something actionable that brings light to a lot of people for the time being.

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