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The Big Book of Key Performance Indicators by Eric Peterson

The Big Book of Key Performance Indicators by Eric Peterson

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Published by: marketing_curator on Jan 28, 2012
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07/03/2013

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Whereas order conversion rate describes the likelihood that a visit will end in a purchase,
buyer conversion rate describes the likelihood that a person will turn into a customer.

Definition

Keeping the definition of order conversion rate firmly in mind, buyer conversion rate is
defined as:

Total Customers Converted / All Visitors = Buyer Conversion Rate

Because this KPI uses visitor-based metrics, be sure to compare data from the same
timeframe.

Buyer Conversion Rate

The Indicators

55

Presentation

See order conversion rate.

Expectation

Order and buyer conversion rates are intricately tied together. Imagine the following
examples:

Example 1: Most visitors come to your site only once and during that visit
successfully complete a purchase.

Example 2: Most visitors come to your site many times before making a
purchase.

Example 3: Your visitors are a mix of people who purchase quickly and people
who purchase after long deliberation.

In the first case, your order and buyer conversion rates will be very close together. In the
second case, your order conversion rate will be lower than your buyer conversion rate. In
the third case, it depends on the mix of fast and slow purchasers.

Keep in mind that most people won’t purchase regardless of the number of visits to the
site. Again, welcome to the Internet.

By juxtaposing order and buyer conversion rate you will eventually develop an
understanding of your purchaser’s consideration cycle. Once you understand their habits,
you can then try and influence their behavior using clever marketing and aggressive
pricing.

Action

If your buyer conversion rate decreases it either means you’re increasingly failing to
convert people into customers or that you have a high consideration purchase cycle (order
and buyer conversion rates are disparate) and you just injected a large number of new
people into the process. Regardless of the cause, any substantial change in your buyer
conversion rate needs to be diagnosed. Look at your inbound marketing campaigns, any
changes to your pricing or checkout process and your percent new and returning visitors.

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