You've waited for it and here it is! This is the second blog post in our Conversion
Optimization series. Today we'll be discussing conversion metrics, the numbers that measure a website's effectiveness. Obtaining a higher conversion rate is the ultimate goal, but looking solely at your conversion rates doesn't paint the whole picture. If you missed the first conversion optimization blog you can check it out here.
Bounce Rates represent the percentage of visitors who leave your site from the page they land on without navigating to another page. Alternately, Exit Rates are a lot like bounce rates, except they capture the percentage of visitors who leave your website after visiting more than one page. These metrics help you determine which pages of your site need optimizing, as well as which funnels are most effective.
Average Order Value gives you an idea of how much money people spend on your site in a particular purchase. This can be very useful in analyzing the buying habits of your customers. It can also be insightful to compare this number to the Customer Lifetime Value, which tells you how much a customer spends on your site across all purchases made. If your average order value is the same as your customer lifetime value it probably means that you have a problem with customer retention. However, if your customer lifetime value is much greater than your average order value there is revenue potential and you're probably doing something right.
The Checkout Abandonment Rate is the percentage of visitors who add items to their cart, land on the checkout page, and do not place an order. Checkout abandonment plagues every website because companies often make poor decisions in designing their checkout pages. This is the place where users make their final buying decision, having links that navigate away from this page can lead to poor conversion rates. Evaluating the checkout abandonment rate on your site will provide insight into where visitors are falling out of the funnel.
Tracking your website's Traffic Sources can help you determine which ad campaigns are working and which are not. A traffic source is exactly what it sounds like - a website, banner ad, email campaign, or anything else that directs traffic to your site. Google Analytics has a very cool dashboard that breaks down traffic by source.
There are many other KPIs that businesses pay attention to and your taste in KPIs will evolve as your website does. The first step is understanding these metrics and deciding on how you want to use them internally. You may decide that customer lifetime value doesn't matter, or that focusing on decreasing checkout abandonment is more lucrative than decreasing bounce rates on your homepage. The end goal is to increase conversion on your website, but the path you take to get there depends on what you discover about your site from analyzing your KPIs.