Stat Centric Blog


Understanding the Difference Between Goals, Conversions, and Transactions

May 26, 2014 - By Levi Page

Let's Review Some Conversion Terminology

Conversion:

When a user successfully completes an action important to the success of your company. In some cases, this can mean they literally "converted" into a customer or a prospect, but it can also pertain to things like downloads, demo views, etc., that lead to a full (or macro) conversion, such as a purchase. In either case, they are important indicators that they customer is engaged and taking the actions needed to help your business thrive. For example:

  • When a user signs up for your company newsletter (a Goal Conversion)
  • When a user completes a purchase (a transaction, also known as an eCommerce Conversion)
Goal:

Any action that you have defined that contributes to the success of your company. Goals can be thought of as business objectives.

Goal Conversion:

When a user completes a defined goal, a goal conversion is recorded for that visit. An individual goal can only convert once per visit. So if I have defined 3 goals, each of them can convert once, but no single goal can be triggered more than once. For example, visitor A during a visit might trigger a download, a lead, and a sign up for a total of 3 goal conversions (1 download, 1 lead, 1 signup). If visitor A triggers another download during that same visit, only the first download is counted.

Transaction / eCommerce Conversion:

A special type of conversion that is used to track your online sales effectiveness. A transaction can contain multiple purchase items. The term eCommerce Conversion is used interchangeably with the term transaction.

Goal Value

A monetary value assigned to a goal conversion or the total value of all goal conversions for a given time period (depending on how the term is used).

Example: If I have configured a goal called "Lead" and 1 in every 10 leads results in a $100.00 sale, then I will likely want to value each lead at $10.00. This is done during the goal setup process.

Transaction Value

A monetary value assigned to a transaction or the total value of all eCommerce transactions for a given time period (depending on how the term is used). This is also called eCommerce value.

Example: If a user makes a purchase for $128.00 and the shipping and tax is $10.00, then the value for the transaction would likely be $118.00 ($128.00 - $10.00). You will want to set the value of the transaction to the gross revenue obtained after discounts, etc.

So what's the difference between a Goal and a Conversion?

The goal is the desired action you wish the user to complete. The conversion occurs when the desired action is actually completed. So for instance: You define a goal called "Download Brochure". You now have a goal defined, but until a user actually performs a download of your brochure, the conversion has not yet occurred.

Summary

  • Goals and Transactions/eCommerce are two categories of conversions.
  • Goals are business objectives that you define which contribute to the success of your company.
  • Transactions represent online purchases and may contain one or more purchase items under a single transaction.
  • Goal value is typically estimated based on the expected revenue (i.e.: $10.00 per lead, etc.).
  • Transaction value (i.e.: eCommerce value) typically represents real revenue obtained from a customer and is used for tracking online sales.
  • The metric Conversions is the sum of Goal Conversions + eCommerce Conversions.
  • The metric Value is the sum of Goal Value + eCommerce Value.