Website Conversion Metrics
Author: Kevin Gold
Published: Monday, November 8, 2004
Conversion Metrics 101 - “Defining Success”
“If I told you once, I’ve told you twice, I’ve told you a thousand times” was my mother’s remark when it appeared that I wasn’t listening to her advice. To my defense, I often was listening but the amount of advice exceeded my capacity to process it. It was like drinking water from a fire hose.
As Internet business owners, we face a similar situation by the volumes of advice we receive on how to manage, market and grow our businesses. Weeding through the “need to know” versus the “nice to know” takes effort. Yet identifying the “need to know” is essential in defining and ultimately achieving success.
For your online business here is an essential “need to know”. Think about this…
Your website received 5,600 visitors last month and it generated 26 sales. Was last month a success? You don’t know, right?
Defining “Success” - the Power of Performance Metrics
Performance metrics are measurable results gathered and calculated from your business’ online systems (traffic, website, and customer retention) and used to identify their aggregate and individual strengths, weaknesses and opportunities.
Referred to as “key performance indicators” or “benchmarks”; their importance carries the same weight as traditional financial ratios like return on investment and days sales outstanding carry for assessing a traditional business’ performance. They form a dashboard for a business owner to gauge the effectiveness of their current business strategies and sets a baseline for defining future success.
Further, performance metrics identify the “gap” between where you are today and where your business goals require you to be tomorrow. Without them, you’re operating a ship without a rudder and wandering aimlessly in a big virtual ocean. As Business Executive, Thomas S. Monson stated,
"Where performance is measured, performance improves. Where performance is measured and reported, the rate of improvement accelerates."
The Primary Performance Metrics
Performance metrics vary by each individual business; however, five specific metrics are most important among successful online businesses. These include:- Conversion rates
- Cost per visitor
- Cost per lead, prospect or referral
- Cost per customer
- Value per visitor
If every Internet business concentrated on these five primary performance metrics, their online businesses would increase exponentially. Why? Because…
“You can only Manage what You can Measure.”
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