Measuring website conversion rates

Conversion rates have long been the determining factor of a website’s success — whether you have a fully fledged e-commerce website, lead generating website or other, your conversion rate (usually) determines the overall return and success you are getting from the website.

But what exactly is conversion rate?

Most people measure a website’s conversion rate by looking at the total number of visits or visitors that come to a website and then divide that by the total number of sales or leads achieved.

Is this the best or most accurate way to measure conversion rate?

Well, this is were I tend to disagree and based on working with many websites over the years and talking with customers and users of these websites — there is a major overlooked factor in all of this and this is something called “online purchase intent”.

What is “online purchase intent”?

Simply put if user A arrived at a website with sole purpose of getting to know more about the company behind the website then that user’s online purchase intent is negative. If user B arrived at a website with the sole purpose of trying to book a flight or look for available flights then that user’s purchase intent is positive. Positive purchase intent means that there is an intent to buy (whether that user is shopping around or not — they have the intention to possibly purchase) and negative purchase intent means that the user never had any intention of purchasing anything on the website — these users may be doing research, competitors collecting information, people getting more information about the company etc.

This is not to say that a negative purchase intent user doesn’t count towards ultimate conversion on the site — a negative purchase intent user may convert eventually, but this needs to be measured separately.

What is the easiest way to measure positive and negative purchase intent?

Quite simple actually. First use the regular conversion measure of looking at total visits/visitors to a website — let’s put this at 100 over a period of a week and then look at the total sales achieved over the same period — let’s put this at 10 sales. The resultant conversion rate will be 10% visits/visitors divided by sales.

Now let’s look at negative purchase intent. The easiest way to measure this is by only looking at the total number of visits/visitors to shopping cart or to a particular product page — this can even be a booking engine page for a company such as an airline. Then look at the total sales achieved and divide the total number of visits/visitors only to the e-commerce or lead page and divide that by total sales — you will now get to a different number. To put this in perspective your e-commerce page/section or lead page may get 50 visits/visitors over a period of a week and 15 sales — 50/35 (-1) = 42%.

The number of users you have positive purchase intent need to be measured separately using the method above and then combining this with the negative purchase intent users (this can also include positive purchase users) — will give you a much better picture of the overall performance of your website. This is only part of measuring your conversion rate — you also need to factor in the specific page performance, bounce rates etc. But this gives you a start in filtering what really matters to your business.

How are you measuring conversion rates?