One of the most insidious problems for companies is that they over estimate their “conversion opportunity”. Traffic went up from one million visitors to two million visitors so we can now make twice the amount of money. The reality could very well be that you got a additional 100% irrelevant traffic (all of whom who wanted to buy underwear and you sell ipods, or all who wanted to read your blog, or all who only wanted the one job you have listed on your site etc etc etc).

By presenting this framework I was hoping that the Analyst could give a reality check to the CXO as to what is actually possible in terms of bottom line impact.

Few Analysts sit down and think, what’s the actual size of the opportunity in front of is. We all thing its all Visitors to the site. False.

If that primary goal is accomplished then there are two secondary impacts (in this order):

1) We realize we don’t “suck” as much as the 1.72% conversion rate seems to indicate. So let’s make sure we internalize that, get credit for it, and segment the data like heck to find growth opportunities in terms of conversion sources (sources that might otherwise be “hidden” in the big pool).

2) We realize that we do “suck” that our opportunity pie is so small (if indeed that is the case). That should force the Marketers / Directors to realize we are getting a lot of sub optimal traffic (call it “unqualified”, note the quotes), then ask the question what do we do? A] We can figure out what to do with this “unqualified” traffic (that is bouncing or there for the wrong reasons etc), create content for them, engage them, etc etc. B] Start targeting our campaigns better so we can increase the opportunity pie (qualified traffic).

Net net, I am not encouraging a numbers game. I am encouraging a different way of thinking of the numbers so the above core Organization Behavior and the Organization Campaign Spend problems are seen in a more stark light and hopefully solved.

Looking at the data in aggregate I think hinders that.

-Avinash.

I’ll cut to the chase– what good is this doing? Sure the conversion rate is higher, but that doesn’t tell you anything because the entire calculation has changed. How does this fit with measuring trends? What’s wrong with having a broader pool? Sure, the “real” number might be higher than we give it credit, but since when did that matter when we’re looking for progress, not absolutes?