Glossary
Conversion rate
Conversions divided by something. The numerator is usually agreed and the denominator rarely is, which is why the same performance produces different rates in different tools.
Also called: CVR
Everyone agrees what goes on top. The argument is always underneath.
Divide by sessions and a returning visitor who browses three times before buying counts as three, so the rate drops. Divide by users and they count once, so the rate rises — and now your figure depends on how well you identify returning people, which is an identity resolution question, not a marketing one. Divide by clicks and you are measuring the ad platform’s count, which will not match your site’s. Divide by new users only and you get a different number again.
None of those is wrong. They answer different questions. But they are all called “conversion rate”, and tools pick their default without announcing it.
Two consequences worth holding on to.
A rate can move with no change in behaviour. Change the session timeout, improve returning-visitor identification, or start filtering bot traffic, and the denominator shifts. The rate moves. Nothing about the marketing changed.
Rate and volume can move in opposite directions, and usually should. Broaden targeting and you reach more people who were less likely to buy: conversions go up, rate goes down. Cutting the campaign to protect the rate is optimising the metric rather than the business. A rate is only interpretable next to the volume it came from — which is why it is a diagnostic, not a target.
Do not confuse with
Close enough to get mixed up, different enough that the mix-up costs something.
- Conversion An outcome you decided to count. The definition is yours, which is why two teams reporting "conversions" are often counting different things and comparing regardless.
- Session A group of one visitor's activity treated as a single visit. The grouping is a rule each tool applies, not an event, which is why two tools rarely agree on the count.
- Customer lifetime value What a customer is worth across the whole relationship rather than one purchase. Usually a prediction, often reported as though it were a measurement.