For most of the web, the importance of web analytics is barely understood. Most sites don’t have a web statistics tool installed; a minority have some type of statistics measurement tool in place, but never use it or don’t understand how to use it properly; and, an even smaller minority have a metrics package and can extract some value from it.

The most important question a metrics tool can answer about your website is:

“What is my site’s conversion rate?”

A whole bunch of readers are about to turn their attention away because they immediately think this article is no longer relevant. First thoughts sometimes are that if you don’t run an e-commerce site, how could conversion rate possibly be of any importance?

If you think that conversion rates are only for e-commerce sites, you are sorely mistaken and you’re making a critical error in the management of your site.

Think of conversion rates like this, “How many people are doing what you WANT them to do on your site?” If one person reaches one of your desired outcomes, that’s a conversion.

No matter what type of website you have, here’s how you should calculate your conversion rate:

(# of visitors reaching a desired outcome) / (# of visitors to your site) = Your Conversion Rate

What are desired outcomes?

You need to determine them.

If you are running a .Gov or, similarly, a branding website, your outcomes are likely getting visitors to arrive at a particular page, or getting them to click and subscribe to your RSS feed or to sign up for your newsletter or, in the case of a corporate site, to download a whitepaper or other thought-leadership content, or to watch a video about your organization.

If you’re running a content portal, your outcomes are likely to have someone click the link to make your site the homepage, or for them to download and install your toolbar, or for them to view a certain number of pages, or for them to spend a certain amount of time on your site before leaving, or, without question, for them to exit your site by clicking a link to one of your advertisers.

If you’re running an e-commerce site, your outcomes are definitely for the visitor to make a purchase, or to leave their email address for a newsletter or to sign up for your free content.

YOU NEED TO FIGURE OUT WHAT THE DESIRED OUTCOMES ARE FOR YOUR TYPE OF SITE!!

(No more yelling…I promise.) Think about it again…what do you want visitors to do when they arrive at your website?

Once you’ve identified those outcomes, look at your metrics tool to determine how many people reached that page, downloaded that .pdf, left their email address, clicked the link, watched the video, etc. Next, reach into your metrics app and pull out the stats for Total Visitors. Use the Total Visitors number as the denominator in the equation above. (Note: Make sure you use the same time frame – if you measure the number of people who reached an outcome over the period of a month, use the same one-month time period to measure the Total Visitors metric.)

Now you’ve got the conversion rate for each of your desired outcomes.

The internet average conversion rate is around 2 to 3%. What’s yours?

If it’s bad, don’t despair. We can fix it. Leave a comment below.