Early in my web analytics career, I was presenting to the executive team at a Fortune 1000 company. As we discussed their conversion rate trends and ideas for improvement, one of the executives said, “These recommendations are interesting, but are they really necessary? Based on some benchmarks I recently saw, our conversion rates are actually well above the industry average. Why should we change anything?”

I could write a book in response to this question – but let’s focus on the benchmarks for now. The desire to compare your performance to others is simple human nature – everyone wants to know if they are doing better than the other guy. And while this is a fairly common and seemingly simple request, it is not such an easy answer.

The reality is that benchmarks – in the world of web analytics – are fairly meaningless. Why? Because companies measure performance in different ways. Take something as simple as retail conversion rates. Some companies measure retail conversion as Orders/Visits. Others measure it as Orders/Daily Visitors. And others measure it as Orders/Monthly Unique Visitors. So when you’re looking at a benchmark, like the 2.13% average I recently saw reported from Shop.org, what does that really mean?

Conversion rates also fluctuate from weekday to weekend, over holidays, and in response to external factors like campaigns and keyword buys. They also respond to internal factors like home page changes that cannot always be identified when looking at averages. They also vary greatly by geography. So when comparing your conversion rates to others, which time frame would you pick? Which promotional period would you select? Would you focus on worldwide, or just US? Even if you have good answers to these questions, you have almost zero visibility into how your peers arrived at their conversion rate. Again, what does that 2.13% really reflect?

Due to these, and many other factors, it is misleading at best to compare conversion rates from one site to another. And this is why Omniture has refrained from publishing industry benchmarks over the years – the challenge is not with data collection, it’s with data definitions and standards. I know the Web Analytics Association has a standards committee so perhaps someday the value of benchmarks will improve. But no matter what happens in the future, your best strategy will always be to focus on improving your web efforts based on your own analytics data. That’s the secret sauce.

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