Don’t be dismayed by noisy metrics

A good reminder from Andrew Chen, who notes how bad many consumer metrics are conversion/percentage wise: Why consumer product metrics are all terrible.

“Other than the exceptional cases, consumers are impatient and disinterested in your product. Even the ones who sign up to try it out, only a small % are willing to stick around to use it more. As we discuss later, a typical product might see 90% refuse to sign up to a product. And then of the ones who do sign up, over 90% of users disengage and become inactive over time. These metrics are terrible, but they’re normal.”

Upon first blush, metrics do tend to be terrible. Upon further inspection we see that there are pockets of higher conversion, on specialty landing pages or from highly qualified traffic or from certain types of inbound links. For example, throughout the history of I’ve found that normal, noisy traffic does have pretty low conversion rates/click throughs. But when traffic comes primed from another person’s blog post, then everything looks different. Conversion rates quadruple and my inbox fills up quickly. This makes perfect sense…when someone comes to you from a recommendation they are much more likely to give you real consideration.

That’s the key insight, in my opinion: overall conversion numbers are low because there is just so much noise in web traffic. Don’t get discouraged by this…think about digging in to find the diamonds in the rough. When you look closer, you see that there are indeed patterns you can find that point to real value.

Published: May 27th, 2014