Drop off or abandonment rate measures the number of visits/visitors who left a conversion process (funnel) without completing it. Any process with 2 or more actions on the site can be considered a conversion process, what you define as a conversion depends on the purpose of your site and your business objective. Some of the commonly used conversion funnel are shopping cart, newsletter signup and document downloads.
Abandonment rate helps identify the steps in the funnel that are causing the users to drop off. Conducting analysis of those steps will help us take necessary steps to minimize the drop offs and optimize the conversions.
There are 2 ways to calculate Drop off rate and each of them provide the data in slightly different ways. Both of them are correct ways to calculate.
- Total Drop off from First Step = (Visits to the current Conversion Step-Visits to the First Conversion Step)/Visits to the First Conversion Step. Let’s assume that we want to use Product as the first step of the conversion process and that step gets 10,000 visits. But of those 10,000 only 7,000 continued to the next step of adding the product to shopping cart. Then in the next step only 200 out of total 10,00 that started the process continue to Registration form and finally 1,200 out of 10,000 got to the final confirmation page. This means we saw 30% abandonment between Step 1 and Step 2 ie. (7,000 -10,000)/1000. Abandonment was 80% from Step 1 to Step 3 (2,000 – 10,000)/10,000. Final abandonment rate was 88% (1,200 – 10,000)/10,000. Though this calculation gives us a good idea of final drop off rate and conversion it is a little hard to understand.
- Step Abandonment Rate = (Visits to the current Conversion Step-Visits to the previous Conversion Step)/Visits to the Previous conversion Step. This calculates the abandonment rate between the two immediate steps. Unlike the previous calculation it provides a better idea of abandonment as visitors move from one step to the other. As shown below, again out first step had 10,00 visits, of those 7,000 continued to next step resulting in an abandonment of 30% (same calculation as above). However when the visitor moves from step 2 to step 3, our abandonment rate now is is 71% (2,000-7,000)/7000. The final step then shows an abandonment rate of 40% (1,200 – 2,000)/2,000 Using such a calculation you can easliy see which steps are causing the biggest drops, in this case it is step 2 and step 3, people are adding products to cart but not clicking on the checkout button to go to registration form. Why? Maybe checkout button is not visible? Maybe it is the name of the button? Whatever the reason is, you have the data to show where the problem is and gives you an idea on what needs to be fixed.
Contributed by Rohan Kapoor based on his original post at Funnel Drop Off/Abandonment Rate