Conversion Rate Question: Should I Measure Visits or Unique Visits?
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When you measure conversion rates, is the equation:
- conversion rate = visits/conversions
or
- conversion rate = unique visits/conversions
I ask because it can actually make a pretty big difference in the conversion rate. For example, if you visit my ecommerce website 100 times before buying something (and assuming you're my only visitor), then my conversion rate is 100% _if I'm determining conversion rates by unique visits/conversions. _However, it's only 1% _if I'm determining conversion rates by visits/conversions. _Wow!
Now this is clearly an extreme example, but it should serve to illustrate the point that in more reasonable cases, the way the data is measured can have a potentially significant impact on the conversion rate.
Is there an industry standard for this?
Am I missing something really basic?
Also, here's a little bit of context for the question:
I run an ecommerce website powered by the Magento CMS and I'm trying to measure my conversion rate in Google Analytics for individual products. Google Analytics shows me my site wide conversion rate, but apparently I have to do some customization in order to measure conversion rates on the product level. That's fine, but I want to make sure I'm measuring my product conversions in a standard way.
Thanks for any and all help!
Adam
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Conversion rate = Conversions / Visitors (you had it flipped around)
Choosing whether to track unique or not depends on the buying cycle - some items (think high cost, high research) are never converted on a unique visit so by tracking unique visitors, your conversion rate is 0%.
The best solution is to track conversion per recurring visitor (e.g. conversions / unique, conv / 1st return, conv / 2nd return, etc). This will give you a better example of how many visits per conversion on average it takes for someone to convert and you can try to improve the rate at each stage.
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conversion rate = **unique **visits/conversions is the recommended equation but there are other factors to consider in your equation to obtain the true conversion rate.
Not every visitor can be considered a conversion opportunity. Here is a good article on Kaushik.net to help you calculate a true conversion rate for your website.
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Personally, I think unique visits are more relevant then visits. If you go back to the example I used in my original question, if 1 person visits my site 100 times before making their purchase, it makes sense to me that my conversion rate is measured as 100%, and it doesn't make sense that the conversion rate was 1%. Now that's my opinion, however I don't want to measure my conversion rates that way if the industry measures it a completely different way.
Though after I re-read your response I'm beginning to think that you're saying something very similar to Kevin Budzynski, which is that you can measure two different things if you look at visits and unique visits. That's a good point. I'll have to think about this more - but I suppose my other question continues to stand, which is, is there an industry standard?
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We are planning to measure both for pretty much that reason. Yet, that doesn't tell me which (if either) is an industry standard in ecommerce. Understanding the industry standard is important if I want to understand how my conversion rates stack up against other merchants in the industry.
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I think it depends on whether you look more closely at visits or unique visits as a definition of traffic. It also depends on what you are trying to determine like how many visits it takes to drive a conversion or how many individual people convert on average.
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Measure both. By doing so, you will be able to see trends you may not see by doing one or the other.
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