Fresh out of school I joined Spotify as the first data analyst. One of my first projects was to understand conversion rates. Conversion rate from the free service to Premium is tricky because there’s a huge time lag.
Erik is 100% absolutely right: conversion rates are surprisingly challenging to measure when there is a significant delay between the top and bottom of a funnel. Here's how he solved this problem at Spotify. My favorite line of the post:
conversion rates are pointless to try to quantify as a single number
100% agree. Conversion rates are one of the most commonly-measured metrics in tech, and yet this topic is still surprisingly poorly understood. Are you familiar with the Kaplan-Meier non-parametric estimator?
Extremely practical, highly recommended.Read more...