Calculate Ecommerce & Goal Conversion Rate in Google Analytics

Last Updated: May 26, 2022

Whenever I get a new account the first thing that I do is dramatically improve the conversion rate of the website along with campaign performance, users’ engagement and content consumption.

You may say, “We all do that eventually”. But there is a difference. I do it a bit faster…. say within a few minutes and that too without spending any time or money on fixing website usability and other conversion issues.

I am able to do that by abandoning “Global Analytics”.

Global Analytics is the analysis of a campaign/website on the global/planet level.

Following is the classical definition of Goal Conversion Rate in Google Analytics:

conversion rate formula

In Google Analytics the Goal conversion rate is calculated as:

google analytics goal conversion rate

Goal Conversion Rate = (60,652 Goal Completions / 97,838 sessions)*100 = 61.99%

Similarly, in Google Analytics the e-commerce conversion rate is calculated as:

e commerce conversion rate
ecommerce conversion rate

E-commerce Conversion Rate = (629 Transactions/339,904 sessions) * 100 = 0.19%

Now, the problem with such type of computation is that Google Analytics takes every person on the planet into account while the calculating conversion rate metric.

The website in question sells clothing only in the US and Canada but get visits from around the world because of solid SEO and huge social media presence.

only us and canada

Since people from other countries won’t/can’t buy, you can’t hold them responsible for your conversions. Can you?

But Google Analytics treats every person who has visited your website as your potential client and hence put everyone in the conversion funnel while calculating the conversion rate metric.

maths stats page ad
maths stats page ad mini 1

There are more than 20000 visits from the UK alone. These visits will never improve the bottom-line of my client’s business as they are not our target market.

What the people who generated these visits do on our website is irrelevant for tracking conversions, users’ engagement and content consumption. They are simply not our target market.

No matter what you do, you can never generate sales and leads through them so they should be filtered out from the conversion funnel along with all those people who came from other countries.

Look at this scenario the other way.

If you sell ‘car insurance’ in the UK, you can’t say to your boss “we have low sales/conversions because people from Germany are not buying our insurance”.

They will never buy your insurance because they are not your target market but they can still visit your website through some insurance-related search terms or through social media.

But when you pull the traditional conversion rate metrics from Google Analytics reports and present it to your client/boss, you are making people from non-UK countries responsible for your sales as the ‘visits’ you have used for conversion rate calculations also include visits from non-UK countries and conversion rate is the percentage of total website visits which resulted in goals completion.

As long as your conversion rate is the percentage of global visits that resulted in goals completion you will never be able to determine the true conversion rate of your website.

So how you should calculate the true conversion rate?

real conversion rate

Let us calculate the real conversion rate of the website in question (the one that sells clothes in the US and Canada).

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Step: 1 – Create and apply a new advanced segment (named ‘Traffic from Target Market’) in your Google Analytics view/profile which shows traffic only from your target market. For example:

traffic from target market

You can then see the true metrics for your website traffic:

traffic from target market2

You can now see, how each and every metric in your Google analytics reports has changed dramatically.

You are now looking at the real traffic data, the data which until now only a handful of super analytics ninjas were able to see. All the metrics you see now are related only to your target market.

Check the new and true ecommerce conversion rate:

traffic from target market3

Your website ecommerce conversion rate now is 0.27% earlier it was 0.19%. Congratulations, you just improved your conversion rate by 0.08 percentage points without fixing any conversion issues.

This advanced segment not only helps you in calculating your true conversion rate but also help you with all other important SEO metrics.

You can now measure real campaign performance, real users’ engagement and real content consumption.

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Himanshu Sharma

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