1. ## Goal Conversion

Hi,

Can i know how to calculate Goal value in Goal Conversion.

2. The goal value is basically how much a goal is worth to your business and this may vary for different industries and business models. To answer this precisely, you may need to share with us your business model together with the conversion goals that you are trying to accomplish.

Just as an example, if I run an ecommerce website that only sells one type of widget with an exact profit of \$100, the value of my conversion goal (a purchase) will be \$100. Of course, elements such as average basket size may come into play if it is normal for your website visitors to purchase more than 1 widget.

Tracking the value of a signup (another type of conversion goal) would typically be harder because elements such as the likelihood of a lead becoming a customer, lifetime value (for a product with recurring billing), etc. will come into play.

3. Question for Wayne Liew:

I found it interesting that you used "Profit" instead of gross sale amount.

Sticking with the ecommerce example, I had previously thought that goal value was basically the value of an average sale. It would be calculated by picking a couple of typical months and summing up the total sales and dividing by the number of sales. Like \$50,000 in sales divided by 400 sales = \$125 per sale = Goal Value. Does this match the common method?

Your idea of profit seems more accurate IF the items being sold all have a similar mark-up or profit margin. So refining the above example, if the store's typical mark-up is 90% then the profit on the average \$125 sale would be (125 minus (125 divided by (1 + .9))) = \$59.21

But I wonder about keeping things comparable in Google Analytics? GA seems to primarily use the actual sales amount for so many reports and calculations. If you use "Profit" then doesn't it cause confusion because GA starts comparing apples and oranges? (Sales and Profits)

4. Originally Posted by Greg Baka
Question for Wayne Liew:

I found it interesting that you used "Profit" instead of gross sale amount.

Sticking with the ecommerce example, I had previously thought that goal value was basically the value of an average sale. It would be calculated by picking a couple of typical months and summing up the total sales and dividing by the number of sales. Like \$50,000 in sales divided by 400 sales = \$125 per sale = Goal Value. Does this match the common method?

Your idea of profit seems more accurate IF the items being sold all have a similar mark-up or profit margin. So refining the above example, if the store's typical mark-up is 90% then the profit on the average \$125 sale would be (125 minus (125 divided by (1 + .9))) = \$59.21

But I wonder about keeping things comparable in Google Analytics? GA seems to primarily use the actual sales amount for so many reports and calculations. If you use "Profit" then doesn't it cause confusion because GA starts comparing apples and oranges? (Sales and Profits)
Hi Greg, I think there is a misunderstanding here about goal value vs ecommerce tracking in Google Analytics and I believe they can be tracked separately under different reports too.

In my response to the thread starter, my example is solely for an ecommerce website that that only sells one type of widget with an exact profit of \$100 so a goal value would be appropriate since it can be set up easily (assuming that the thread started is a beginner in Google Analytics) and a fixed goal value makes sense.

To track overall ecommerce performance for a full blown ecommerce website, using the gross revenue amount would be appropriate as data is pulled from the receipt page itself, not keyed in manually.

Yes, I do agree with you that if a website already have ecommerce tracking enabled, using the actual sales amount across Google Analytics will make things more comparable.

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