The importance of ‘conversion rate’ as a core analytics metric is being debated in blog posts from Avinash Kaushik, Matt Jacobs, and LunaMetrics.

Avinash makes the point that conversion rate as generally defined is a vastly over-rated metric because it focuses only on ‘sales’ and thereby forgoes all users who came with an intent or goal other than buying something. Matt says that conversion rate doesn’t discern the quality of the revenue. And Luna responds by saying that these are both true but somewhat advanced concepts and probably a bit more than many online marketers can wrap their heads around at the moment. (These are obviously very brief summarizations, please read the original posts for the full thrust and subtlety of each writer.)

On the whole I have to side with Luna on this one. Most web sites have a clear primary purpose (sell, sign up, download, etc.) and this is invariably tied to business revenue, and therefore I think that the percentage/ratio of site visitors that ‘convert’ is vitally important and needs to be prominently tracked. We’ve also found that high visibility of the abysmally low conversion rate can really help get apathetic executives engaged, either intellectually or at least in approving resources for site redesign, persuasion architecture, A/B or other landing page tests, additional content, etc. Without this number they thought the site was ‘good enough’, or more realistically just had no way to think about its efficacy.

Having said that, if the business and site can reasonably discern other goals beyond the ‘conversion event’ for certain site visitors (customer service, presale research, etc.), then tracking their success to ‘Task Completion Rates’ makes great sense. The major analytics packages should enable this at a core level, making it possible to use custom-defined funnels as ‘completion rates’ that can be connected to inbound traffic, marketing programs, and other data just as fully as (traditional) conversion rates.

It is undeniable that businesses have all kinds of additional complexities not reflected in a conversion rate. One time vs repeat customers, high margin vs lower margin items, high-ticket and complex purchases which happen only after a long list of intermediate milestones are reached, post-purchase issues and customer service, on and on. Of course we’d like to capture as much of these issues in analytics as possible, to provide clear and actionable reports. But the need for more segmentation and granularity doesn’t minimize the importance of the more base metrics. Luna is entirely right that most online marketers are barely crawling and so asking them to run and do backflips just isn’t reasonable.

Beyond the distinctions in priority that are really the core of this discussion, the issue highlights how far the current crop of analytics tools are from what we all really need. My fellow bloggers are pointing out that the conversion rate metric lacks sufficient context and levels of granularity. If we have web sites to achieve results, and analytics software is supposed to measure performance and report on results, shouldn’t they at least be able to cover the concept of conversion well?