The figures are summarized here:
Let's assume I can't get any more visitors. Therefore, if I want to increase income I have to increase site performance. Where should I focus my efforts -- PPC or listings? When I look at bounce rates, I discover PPC has a 30 percent bounce rate, while listings have a 45 percent bounce rate. When I recalculate my analysis, using RVCR, the picture looks very different:
This clearly shows the conversion rate for the two sources is not the same if I remove bounced visits from the picture. The conversion rate from people who actually engage with the site is higher for listings than for PPC. In other words, visit-for-visit, listings are worth more. It's no longer so obvious where I should put my effort.
I can aid that decision by working out what I'm losing from each source due to bounces. Let's assume that if I reduce my bounce rate, the extra visits will convert at the same rate as before. Using this assumption, I can calculate a nominal value for bounced visits. I'm currently losing 12,000 PPC visits and 18,000 listings visits. If both these convert at the same RVCR, I'm losing around $26,000 in sales from PPC and $50,000 from listings. In other words, the lost listings traffic is actually worth twice the lost PPC traffic.
Looking at the picture now, it's obvious I should be focusing on reducing the bounce rate for listings. Visits from listings are worth 25 percent more than visits from PPC because their RVCR is higher. When I calculated bounce rate in the traditional fashion, I was actually hiding major differences in performance between the two sources. A new picture has now emerged that makes it obvious I should focus on improving my bounce rate for search listings. Any given reduction in bounce rate will generate more income from listings than from PPC.
To me this makes it clear we should forget about our overall conversion rate. It doesn't tell us anything, and it's probably misleading us, as it did in the above example.
Analyze your conversion rate only for retained visits -- people who actually engage with your site. This provides a much clearer picture of what is really happening. Get with the retained visits conversion rate -- that's real information you can make decisions with.
Brandt Dainow is an independent web analytics and marketing consultant working in the U.K. and Ireland.
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