Analysis doesn't happen in a vacuum. And as we've said a thousand times: you can torture the numbers to confess to ... uh, we mean, rationalize ... just about anything.
Matt Belkin of Omniture blogged recently about the differences between Visits and Unique Visitors as they relate to measuring reach and as they factor into the Conversion Rate formula. Matt argues that Conversions per Visit is more important than Conversions per Unique Visitor. We occasionally see our own clients make this sort of slip-up, so it's worth examining the merits of the argument.
Matt writes, "[Measured] Visits ... always. Sure, call me crazy - but my logic is actually quite simple."
Simple? A finer description of this approach would be simplistic. Perhaps that's the root of the problem. Matt is clearly an intelligent guy. But from a software vendor stand-point, it's easy to fall into the trap of seeing the Reporting software as the end, rather than as a means to an end. What a business owner really needs (and let's face it, what a customer needs) is Analysis. If she could, the business owner would interview every successful and failed customer to find out what the company did right and wrong. Each of those customers is a Unique Visitor, and it's the totality of the unique visitor experience that caused or prevented a conversion.
Reporting is often simple; Analysis is rarely so. Reporting condenses material into sound-bites; Analysis segments material into knowledge-bites. Rigor is involved in real analysis, wherein the software is the tool, not the talent.
Let's look at Matt's three reasons for preferring Visits over Visitors. As we'll see, his blanket statements are superficially true - at least upon first glance - but a deeper understanding illustrates just how little reasoning supports them.
Technically, this is correct, but only if your definition of "accurate" is simply to "account for all data." That's like arguing we can reduce the crime rate simply by making Theft or Assault a legal activity. Will that make the citizenry safer from Theft or Assault? Or does it only remove those factors from the measured crime statistic?
From a data confidence standpoint, measured Visits are more likely to measure actual visits because Measured Visits are no more and no less than the actual visits we could measure - hence their name. However, there's more to this story.
Measured Visits is no more "accurate" at measuring reach than is Unique Visitors. In fact, they're far less so. How can visits possibly tell us about Reach, in anything other than a relative sense? Reach is about people, not sessions. The value of Visits in quantifying relative Reach is identical to that of Unique Visitors: the two are both apples-to-apples comparisons.
In short, measured visits accounts more accurately for actual visits, but actually provides you, the business owner, with fewer answers to the questions you're actually asking. Why is tracking Visits of less value? Matt's Reason #2 explains.
Yes, absolutely this is correct, but with stipulations.
Do you understand the concepts of Macro vs. Micro conversions? Have you planned your scenarios accordingly, taking into account the three critical questions to planning any persuasive system?
What action needs to be taken?
Who needs to take that action?
How do we persuade that person to take the action we desire?
Are you willing to optimize your scenarios for each visitor segment, summing these pipelines to have an Optimal Conversion Rate, rather than an Average Conversion Rate?
In the world of averages, every session does not represent an opportunity to persuade or convert a visitor to a customer. What every session does represent is an opportunity to persuade a visitor to decide to take an action (a micro-conversion) which brings her further into her buying process, and brings her closer to the end goal - the macro-conversion we're looking to optimize (i.e. our revenue generating conversions).
For example, take a customer beginning her search online for a new car. Does Cars.com truly have an opportunity to persuade visitors to convert themselves during a single session? Imagine a scenario where our online car buyer visits once and researches various styles and brands. She comes back a few days later, narrows her search to a few targeted makes and models, then downloads their fact sheets. She returns the next day and makes her purchase. That's three visits in the course of a week. In Matt's software-only approach, that's a 33% conversion rate. How much time and effort should we spend trying to optimize the 33% Conversion Rate we'd report if we used Measured Visits as opposed to Unique Visitors?
The Conversion Rate in this scenario is the maximum it could be - there was one visitor, and she could only provide one sale. By focusing on Unique Visitors we keep our focus on the thing that matters most: a single, unique, prepared-to-part-with-money customer. Matt continues with:
True, and that's exactly why it has less value to you. Are you industry standard? "What do you want to be when you grow up, Tommy? " "Oh, just average." Is that the sort of business you're running, to be just like everyone else? Or is your business gunning to be an Astronaut or a Fireman or an Olympic swimmer?
It's disappointing to return to the world of averages. We recall a time when Amazon was the "industry standard" for online checkout processes. Many an e-tailer went belly up trying to copy Amazon's method. They disregarded the notion that maybe, just maybe, Amazon only worries about doing what's right for Amazon.
And what industry sets these standards anyway? It's the Software Vendor's industry, not your business' industry, because their reporting tools report certain statistics more easily than others. Yes, they're doing what's right for them. And while there's nothing wrong with that, we have to recognize it as a limitation of the reporting tools. We have to stop thinking some magical black box can substitute for our own rational planning and analysis.
Matt goes on to talk about how Unique Visitors are a subjective measure, one the industry can't agree on in terms of length. He says this as if it's a bad thing.
Our clients often ask us for benchmarks so they can measure the size of their, uh, foot. We categorically refuse. What's a benchmark? When your system for conversion actively persuades 97% of your visitors to go elsewhere, benchmarks have little value beyond making you feel like a winner. We'd like to suggest a better way to make you feel like more of a winner: gobs and gobs of revenue.
The only benchmarks you should worry about are internal benchmarks. Bottom Line, how much money am I making? Am I making all that I should, given the resources I'm allocating to the process? Can I make more?
Matt closes with this gem, "The longer your unique visitor timeframe, the more you effectively overstate success."
This is the best evidence yet that you do not want to subscribe to these theories if your job, your company, or your family's income is on the line. Instead, knowledge of your customers, and more specifically, their buying process is the real key. For the record, the buying process is non-linear, and is not the same across all products and all companies. You can't guarantee a customer will reach a buying decision in a single sitting, for every sale, across all the products on the face of the planet, simply because the software vendors say this is how it works.
The characteristics of your sale are multi-faceted. We help define the complexity of our client's sales in four dimensions. Not all sales are equally as complex. There's also the issue of compacted and non-compacted information, as it relates to the various handles of information your customers grab onto based on their angle of approach. The length of time you define for your Unique Visitors should be long enough to encapsulate their buying process, but short enough to take into account when they fail to convert at the macro-level. That's tremendously more important than the results many simple Reporting software solutions generate.
If that last paragraph found you lost in a sea of vocabulary, a life-preserver in the form of our new book Waiting for Your Cat to Bark? awaits you (but not before June 13th). You won’t be drowning for long. In the meantime, trust us, there’s nothing simple about truly analyzing your visitor behavior… unless of course you start with the conclusion and work backwards.