Conversion rates — you are (most likely) computing them wrong

erikbern.com

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.

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