4 sales in a thousand visits - should Dave be worried?

Dave needs 10 sales out of every 1,000 visitors to be profitable. He runs a test and gets 12 sales. How can he be 95% sure that this isn't just good luck, and that the site will continue to be profitable?

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Profitable conversion rate = 10 / 1000
Profitable conversion rate = 1%


Visit this calculator: http://vassarstats.net/prop1.html




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Using the laws of Expected Value, we would expect:

Number of expected sales = Visit x Per-Unique-User-Conversion-Rate

We know the visits. Dave's profitable conversion rate is 1%.



Number of sales to be profitable  = 1,000 x 1%
Number of  sales to be profitable  = 10


Now this could be good, or it could be bad. Dave gets 4 sales for 1,000 visitors, should he be worried about this profit?

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No. Dave is cool - 4 could still be profitable. 




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How to work this out for your numbers? Visit this calculator: http://vassarstats.net/prop1.html

What do you think of this?

Why and how to segment?

Are your users all the same? Really?

Let's take a simple example. "New Visitors" are people who have never visited your site before. People who have come back - "Returning Visitors". Two built in segments.

Do these two groups behave differently with AdWords with some real data? Let's find out.

So looking at the Advertising, AdWords, Campaigns section we see this:

What to make of that data? New Visitors have a goal completion rate of about 2%, but Returning Visitors have 4.2%*.

Are Returning Visitors worth more here? Should we bid more for them? Re-target to them? All fun experiments to do and answers to find.


Answers on a postcard.


* 2% goal completion rate here is 3435 / 171917, rounded.

What the feck is attribution?

A common question I get asked is "What's attribution?". Here's one answer - 42. OK Ok ...

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the story begins:

Meet Aaron, he's 24, young, full of life, uses too much hair product, and works in MacDonalds.

Aaron is going to Malaga and wants to book a car.

So he searches for "Car Hire Malaga" and sees this ad.

1

He clicks on ad 1 and browses, but doesn't book.

Some time passes. Pay day comes. Horray for the big mac.

Aaron then searches for "Hertz Car Hire" and clicks on this ad 2:

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He books his car.

Which ad gets paid? 1, 2, both* or neither?

Write your answer down on a scrap of paper.

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The answer: You're wrong.

There probably isn't a true right answer.

Answering that question is Attribution.

Now go eat some french fries. Subliminal messaging works.

* And if both, split 50:50, 90/10, or other?

P.s. I have more pointless stories using Michael (he's multi channel, geddit?). And Gonzales - always in a hurray. Comment for more or less amusing versions of this.

Season history with seasonality

There's a wonderfully over-used word in statistics, and that's 'maybe'. Only kidding - seasonality. I've heard this mis-applied, never-applied, and over-applied - mostly by me. A Wikipedia definition:

In statistics, many time series exhibit cyclic variation known as seasonality, periodic variation, or periodic fluctuations. This variation can be either regular or semi regular.

Thanks Wikipedia, not!

The short, and my version: history may often repeat itself.

Why is this important? If you are trying to work out why sales went up at 3am on a given Thursday, ask yourself whether that happens EVERY 3am on a given Wednesday. And then ask why again.  You may have better things to do with your time.


Google Analytics has a fantastic 'compare to past' feature as below. 

You can then see if your acclaimed crazy sales spike was real.

Charts like this are 'probably' showing seasonality. Determining scientifically requires effort or some deeper statistical work. 

How is that helpful? Well, if you do a lot of PR activity and see a sales spike, do you normally see a sales spike at that time? If so, perhaps spend your money more wisely. Give it to me - just like a cornetto.

If you'd like more on this, please do Comment. 






Read this? You can claim a prize. First you have to find me.

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What's in a goal?

I get asked fairly frequently what are examples of goals. If you don't use them properly, how do you know when your website is successful?  Goals are a way of linking what your site does with what your organisation needs to do. So you can make sure you are using your time wisely.

Here's a list of goals (targets) in no particular order:

My recommendations ... are you ...

Selling on-line? Set up Revenue (E-commerce).

Getting customer details? Set up URL (Leads) goals.

Building interest? Set up 'Time on site'.

Something else? Ask me!

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How to set up a goal? 

Log in to your analytics software, visit 'Admin', and then add a Goal.

Set it up like this: