I often hear clients say, “My con­ver­sion rate has gone down.  Help!”  In so many orga­ni­za­tions con­ver­sion rate, is the Holy Grail.  High con­ver­sion rate means things are going well, and low con­ver­sion rate means things are going bad.  The only prob­lem is – that’s not nec­es­sar­ily true.

Con­ver­sion rate is a cal­cu­lated met­ric (orders divided by vis­its).  A change in either of the met­rics will make con­ver­sion rate go up or down.  Before declar­ing a state of emer­gency, some sim­ple analy­sis can deter­mine if a prob­lem even exists.

First, let’s look at vis­its.  If vis­its go up, but orders don’t, then your con­ver­sion rate will go down.   But an increase in vis­its could be by design.  For exam­ple, many retail­ers are adding more con­tent to their web­sites.  This includes blogs, prod­uct rat­ings and reviews, buy­ing guides, edu­ca­tional con­tent, and so on.  All of these ini­tia­tives (should) increase repeat traf­fic.  As vis­i­tors return more often to read your blogs or research prod­ucts, your visit num­ber will go up, but not at the same rate as orders.  This will lead to a decrease in conversion.

Another com­mon rea­son for an increase in vis­its is more online mar­ket­ing.  If the mar­ket­ing team starts send­ing more emails or launches a new ban­ner ad cam­paign, vis­its to the site will most likely go up.   If this new traf­fic doesn’t con­vert well, then your over­all con­ver­sion rate will go down.  Also note that the reverse is true.  If mar­ket­ing stops a ban­ner ad cam­paign that had a high bounce rate, your vis­its will go down and your con­ver­sion rate will go up.  To help iso­late the mar­ket­ing impact to con­ver­sion rate, look at con­ver­sion rate for each chan­nel as well as the con­ver­sion rate of vis­its not tied to a mar­ket­ing chan­nel.  Addi­tion­ally, if you already know that mar­ket­ing is dri­ving more traf­fic to the site, look at the over­all bounce rate of the site.  If bounce rate has gone up, this may indi­cate less qual­i­fied traf­fic.  Finally, look at the con­ver­sion rate of vis­its who view more than 1 page.  This will help deter­mine the con­ver­sion rate of more qual­i­fied traf­fic on the site.

After vis­its have been inves­ti­gated, it’s now time to look at orders.  If orders have gone down, then most likely you do have a prob­lem on your hands.  You’ll want to iso­late where and why the orders have dropped.  The first and eas­i­est thing to check is the per­for­mance of micro-conversions on the site. For exam­ple, look at the con­ver­sion rate of the check­out process and inter­nal search con­ver­sion.   Addi­tion­ally, look at the con­ver­sion rate of spe­cific cat­e­gories or depart­ments to deter­mine if one par­tic­u­lar depart­ment or cat­e­gory is caus­ing the over­all drop in orders.  This will help iso­late an inven­tory issue.

While a drop in con­ver­sion rate can sig­nal prob­lem, it is not always the case.  By look­ing at how each part of the con­ver­sion rate met­ric per­forms (vis­its and orders) you can bet­ter deter­mine if the drop in con­ver­sion rate is bad, and if so, how to fix it.