“As a result of improvements to our client’s shopping cart process, revenue increased by 50%”.
“Following the redesign of the landing page, conversion rate increased by 70%”.
Stats like these sound great, they impress; who wouldn’t want a digital agency whose work resulted in double digit improvements in conversion rates. But what does that really mean? What are the numbers hiding?
Lies, damn lies and statistics.
Let’s take some simple numbers. Let’s say that 10,000 people start the journey at your landing page and 500 complete the journey. Put another way, of the 10,000 visitors, 500 actually purchase the item you are selling. In this scenario your conversion rate is 5%.
Now let’s say that you make changes to the customer journey that reduce the drop out rate. People find it easier to complete the process. As a result of your work, you still have 10,000 visitors who start the journey, but now 700 go through to purchase. You’ve increased your conversion rate to 7%.
You’ve increased conversion rate by 2%, moving it two percentage points from 5% to 7%. Impressive, but not as impressive as the claim of increasing the conversion rate by 40%. Which is what the growth rate is from 500 to 700.
So next time someone tells you how they’ve increased conversion rates, or revenue, or some other reported KPI with double digit percentage growth, don’t take the statistic at face value. Ask what they took it from and what they took it to.