I recently saw a report where a business categorized good customers as of February 1, and measured website visitation activity during the month of February. Here's what this business saw (numbers are altered, the point is still easily made).
- There are 125,993 good customers as of February 1, 2007.
- Of the 125,993 good customers, 87,327 visited the site during February (69.3%).
- On average, the visitors had an average of 3.41 visits during February.
- Of the 87,327 visitors, 15,719 purchased merchandise on the website in February, purchasing an average of 1.10 times, yielding 17,291 orders.
If we look at actual customer behavior, we see a different story.
- The website converted 15,719 of 87,327 visitors during the month of February.
- 15,719 / 87,327 = 18.0% of the customers who visited at least one time purchased something during February. This is what matters!! Track this metric, year-over-year, and see if this metric is improving.
- In terms of visits, 17,291 / 297,785 = 5.8% actual conversion rate for this segment of good customers.
If a customer wants to visit your site eight times before making a purchase, then let the customer visit eight times. Don't agonize over conversion rate because the customer wants to visit your site often. Measure monthly conversion rate instead!