Absolute Numbers Over Conversion Rates

Measure total people reaching a goal, not conversion rates—rates can be gamed by constraining earlier funnel stages

Archie Abrams
Growth and experimentation at Shopify

Absolute Numbers Over Conversion Rates

"When you have teams naturally break up the world into different funnel stages... it gets very seductive to look at my part of the funnel and what's my conversion rate through that part of the funnel. But in practice, it's actually almost always easier to just make it harder to do the thing right before your step in the funnel to increase your conversion rate." - Archie Abrams

What It Is

Absolute Numbers Over Conversion Rates is a metric philosophy that prioritizes counting the total number of people who reach a goal rather than the percentage who convert from one step to the next. This approach prevents the perverse incentive where teams optimize their local conversion rates by inadvertently (or deliberately) making earlier funnel steps harder.

At Shopify's 600-person growth org, this principle prevents teams from falling into what Archie Abrams calls "the bane of my existence"—teams implicitly or explicitly constricting the funnel step before them to make their local numbers look better.

How It Works

The conversion rate trap:

  • Team A owns signup → activated conversion
  • The easiest way to improve this rate? Make signup harder
  • Fewer people sign up, but they're higher intent, so activation rate goes up
  • But you now have fewer total activated users

The absolute number solution:

  • Instead of "improve signup → activated conversion rate from 10% to 12%"
  • Goal becomes "get more people activated, period"
  • This reframes the incentive: "Actually, the best way to get more people to a step sometimes is just get more people in the door in the first place"

The counterintuitive insight: Opening the top of funnel will:

  • ✓ Lower your conversion rate
  • ✓ Lower your LTV (lifetime value)
  • But also:
  • ✓ Lower your CAC (customer acquisition cost) by even more
  • ✓ Give you more total people through the door
  • ✓ Produce more absolute winners in a power-law business

How to Apply It

  1. Reframe team goals - Change "improve conversion rate from X to Y" to "increase total number of people reaching [milestone]"

  2. Watch for funnel constriction - When a team's conversion rate improves, investigate whether the previous step got harder

  3. Think whole-funnel - Remind teams that sometimes the best way to get more people to their step is to make earlier steps easier

  4. Accept rate degradation - If you're optimizing for absolute numbers, your rates will naturally decline as you open the funnel—that's fine

  5. Tie it to business model - This works especially well when you have power-law economics (a few big winners matter more than average performance)

When to Use It

  • When you have multiple teams owning different funnel stages
  • When conversion rates are the primary team metric
  • When you notice teams getting "stuck" despite rate improvements
  • When you have power-law economics (marketplace, platform, venture-style businesses)
  • When you want to prevent gaming and local optimization

Example: The Retention Rate Trap

A team focused on retention rate might inadvertently make it harder to sign up or activate—only letting through the highest-intent users who are naturally more likely to retain.

"A lot of teams get very nervous—their retention rate went down, their LTV went down. Oh my goodness, is this going to affect our ability to pay? No, your CAC also went down by probably more. And so now you have the ability to likely spend more and you have more people through the door."

Source

  • Guest: Archie Abrams
  • Episode: "Growth and experimentation at Shopify"
  • Key Discussion: (00:27:29) - Why Shopify uses absolute numbers over conversion rates
  • YouTube: Watch on YouTube

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