I recently came across an insanely great article by Bill Gurley of Benchmark Capital – Conversion: The Most Important Internet Metric of All. In it he asserts that when considering the tradeoff between customer acquisition and customer optimization, the latter should be the obsession of startup and high-growth Internet firms seeking a competitive advantage. An obsession with conversion rate can bring tremendous economic advantage, and in his words:

improving conversion, even a little bit, can produce insane economic leverage for your business.

Another very successful entrepeneur and investor that I highly respect once told me that if I should show conversion metrics demonstrably improving over time. Do that, he said, and investors would be beating a path to our door, checkbooks in hand.

That’s an enviable position to be in, but the last thing that entrepeneurs want to do is drum up artificial numbers for the monthly board meeting to placate investors. If you’re running an online business, the Conversion Rate should be an obsession of yours as well, and here’s why.

(more…)