September 2, 2004, 12:00 AM

Single conversion rate isn’t enough to judge site performance, analysts say

While online retailers have become accustomed to judging site performance by measuring conversion rates, some are now getting a truer picture by drilling down to multiple conversion rates tied to individual marketing and merchandising efforts.

Kurt Peters

Executive Editor

While online retailers have become accustomed to judging site performance by measuring conversion rates, some are now getting a truer picture by drilling down to multiple conversion rates tied to individual marketing and merchandising efforts, analysts say.

“Many site operators in retail are saying they’re being unfairly judged on gross conversion rates,” says Matthew Berk, an independent web site analyst based in New York. “The problem with judging a site on an overall conversion rate is that conversion rates for some segments of a site might be low, while others can be high.”

The important thing for site operators, he adds, is to match conversion rates to individual merchandising and marketing efforts in order to get a true picture of conversions for their most important product and customer segments. If a site has an overall conversion rate of 3%, for example, but a separate conversion rate of 20% tied to its most expensive paid search campaign promoting high margin products, then the overall 3% rate may be more effective than it first appears, he says.

Eric Peterson, analyst with Jupiter Research, says more progressive web sites are beginning to produce such performance data by using site analytics tools to look more deeply into conversion rate details.

 

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