[This series will take an in-depth look at important web metrics, one-by-one. Enjoy!]
Key Performance Indicators or KPI’s (define) are the critical Web metrics you should be monitoring to evaluate the effectiveness of your site. Key performance indicators may differ depending on the business topology (ecommerce/retail, lead generation, content or self-service/support), but understanding them broadly is critical to any organization’s online success.
In this first installment of Unlocking KPI‘s, we’ll discuss the “take rate”; the amount of people taking you up on a given offer on your site. It’s not necessarily your “conversion rate,” because that term is generally reserved for the site’s primary goal, or macro-conversion (e.g., acquiring a new lead, processing an e-commerce order). Take rate is used to measure micro-conversions. These can include:
To calculate take rate, simply find the number of successes for the action being measured and divide it by the number of people exposed to the action.
Example: Lets say I write an ebook about where to find the best pizza in Brooklyn. 8,000 hungry people downloaded this ebook from my site last month. And during that month, my site received 80,000 visits. Of those visits, there were 40,000 unique visitors.
Take rate = 8,000/80,000 = 10%
This can also be done with unique visitors.
Take rate per unique visitor = 8,000/40,000 =
So now that we have the calculation behind take rate, lets look at what influences the take rate. Ultimately, the presentation of the material you want visitors to take has to be perceived as relevant and valuable. The specific elements that will influence how a visitor perceives your presentation need to be tested and optimized to find out what is working best. You will know you are moving in the right direction when your take rate increases.
Here’s a list of some main elements to test on your site that will influence its take rate:
In planned scenarios, the take rate can be viewed as a leading indicator for the short-term performance of your site. Viewing a take rate as a micro-conversion point to indicate interest in your macro-conversion goals will tell you if people are moving forward in their buying decision process. If your take rate increases, you’ll qualify more people to move to your macro-conversion goal — like plugging holes in a leaky bucket.
For the next installment of Unlocking KPI‘s, we’ll cover the ever-important “bounce rate.” Until then, if you have any questions, we’d love to hear from you in the comments.