Divide and Rule: Tactics to grow conversion rates
 

Divide and Rule: Tactics to grow conversion rates

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This article written by Pavan Sudarshan, Co-founder at NudgeSpot, was published in issue 08 of the Social Technology Quarterly. ...

This article written by Pavan Sudarshan, Co-founder at NudgeSpot, was published in issue 08 of the Social Technology Quarterly.
Summary: Segmenting conversion rates enables
e-commerce sites to track their most valuable visitors and can enhance the type of conversion that is most relevant and important to their businesses.

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Divide and Rule: Tactics to grow conversion rates Divide and Rule: Tactics to grow conversion rates Document Transcript

  • Divide and Rule: Tactics to grow conversion rates Segmenting conversion rates enables e-commerce sites to track their most valuable visitors and can enhance the type of conversion that is most relevant and important to their businesses. by Pavan Sudarshan Photo Credit: Digg.com Commerce
  • Kuliza Social Technology Quarterly Issue 08 25
  • 3 2 1 neither representative nor actionable. On this basis, seven conversion rates have been identified that are a lot more granular. Each of these uncovers a specific problem and allows you to come up with solutions. Checkout Conversion This conversion focuses on monitoring the “checkout initiated” to “checkout completed” conversion. Visitors who initiate the checkout process have most likely found what they want to buy and have already made a decision to buy. Losing a visitor who has initiated a checkout is the closest you come to losing a real customer. It is necessary to understand what influences abandoning a checkout. Typically visitors abandon a checkout because of hidden shipping charges, fear of being cheated in delivery, payment gateways that they do not trust, the site is slow while talking to third party systems, etc. Assuring your visitors along the way about payments, having secure modes and channels and efficient shipping help alleviate this fear and get them to convert. Cart Recovery Conversion This conversion focuses on how many abandoned carts were recovered. Adding an item to the cart is a form of expressing interest in a product. If a visitor leaves the site with a cart and never returns, or comes back but does not complete the checkout process, it is important to try and recover the visitor’s cart. Offering better prices and deals, availability, shipping charges and selection range contribute to effective recovery of carts and decrease the cart abandonment rate your site has been experiencing. Reminding returning visitors about an existing cart or offering people an incentive such as a coupon or free shipping to start their checkout process can be very useful. For SDS Market in the US, targeted promotion has been instrumental in recovering and in fact preventing cart abandonments. Brand Conversion This conversion focuses on how many visitors who searched for your brand resulted in buying from your site. Improving this rate helps you reduce the cost to acquire customers. Visitors who land on your page after searching for your brand are valuable. They are the ones who are aware of your brand. Once you have a steady stream of traffic it is important for you to start establishing your brand identity. Improving credibility is one way to retain these shoppers. It is for these sets of shopper that you must take up brand building exercises in order to give them a sense of being a great platform to buy from and where they are highly unlikely to have a bad experience. A great design, an MMost leading e-commerce stores generate a steady stream of traffic from paid as well as organic sources. Search Engine Optimization, content marketing, affiliates, online marketplaces are few among the many tried and tested solutions to generate traffic to one’s store. However, one problem that remains is the number of visitors who end up buying is still very low. Conversion rate, one of the most important Key Performance Indicators (KPI) of e-commerce businesses, is too low. According to the Internet Retailer, the overall conversion rate lingers depressingly somewhere between 2 percent to 3 percent. Given that conversion is vital to e-commerce sites, this article explores the causes of low conversion rates, the possible factors responsible, and what are the different ways in which conversion rates can be improved. An overall conversion rate implicitly treats all visitors identical, i.e. each visitor has the same likelihood of buying from your store on every visit. Even common sense suggests that this is most likely not true. Most people do not buy something the first time they see it. Alex Brown, who has been teaching internet marketing since 1997, talks about six phases in the buying cycle: problem recognition, information search, evaluation of alternatives, purchase decision, purchase and post-purchase evaluation. These phases are indicative of the fact that visitors are on your site for different reasons. Each time they visit, they may be in a different phase of buying. By not catering to these visitors’ needs and only optimizing the selling phase affects conversions. Along the different buying phases several measures and steps to engage visitors ensure conversion. Overall conversion rate is an aggregate data point. It is a single number that represents all the visitors and customers on your store. Web analytics expert, Avinash Kaushik, elaborates on the problems with aggregate data, what to avoid in KPIs and the need for segmenting. He opines that measuring conversion rate without a goal is not very effective. For example, if a store’s current conversion rate is 1.5 percent and is aiming to double it and make it 3 percent. The number alone does not indicate anything. 1.5 percent can be great or pathetic. Increasing it to 3 percent can be a piece of cake or a walk in the desert. There is just no way to tell without understanding a lot of other things, such as merchandize issues, offers, lengthy process, shipping costs, etc. Improving conversion rates thus begins by identifying a specific problem and fixing a goal you want to reach. It is segments of data that need to be monitored in terms of the different problems faced and the different sets of actions required for each one. Approaching an overall conversion rate improvement without understanding important details is definitely not actionable. It is the most important metric that every serious store monitors, but is
  • Kuliza Social Technology Quarterly Issue 08 5 4 easy and noteworthy experience on the site and being consumer- friendly are factors that influence buying. By keeping a track of sources through which you receive the highest amount of traffic will help you determine what your next step should be. Organic Conversion This conversion focuses on how many visitors who arrive on you site from organic sources convert to consumers. Organic traffic is great. It is the indicator that show that your attempts at SEO, brand building, content marketing, referrals and social media are all working for you. Catering to this traffic helps reinforce the brand and spread the word about your store. While organic visitors should be treated like any other new visitor on your store, they are important in spreading word about your store. Exalt them with a great service, on-time delivery and handling their returns well. Leverage social media effectively to get these visitors to talk about you and in turn increase your organic traffic. Data analytic tools are the most effective method to acquire the data you need in order to estimate the sources of organic traffic on your site. This helps to determine how to evolve your site and focus on the sources that brought you highest amount of traffic. New Visitor Conversion This conversion focuses on how many new visitors buy on your site. Improving this helps determine how relevant the landing pages are and how good the traffic sources are in providing qualified leads. Photo Credits Top: JohanL Bottom: Seattle’s Big Blog
  • 7 6 New visitors represent new opportunities. These visitors may not know what your store has to offer, but figuring out what you want to show based on the channel, keyword, source and campaign may result in converting your first time visitors into customers. Relevance is the key to improve new visitor conversion. Landing page optimization, A/B testing and content are the tools to grab attention of new visitors. An extra layer of personalization can come in the form of good product suggestions and ads. For example, IndianStage shows ads for plays that are running in theaters in the city that a visitor is landing from. Not only has this made their site more relevant, their visitors now do not have to do an extra step of searching for plays from their cities. It is a simple step, but very effective. Repeat Customer Conversion This conversion focuses on figuring out how many returning customers purchase again from the site. The goal is to increase the lifetime value of a customer and for any serious e-commerce business this remains a primary goal. To increase lifetime value one needs to understand that it is not about conversion alone on the first purchase, but getting repeat orders from a customer. To do that, you need to meaningfully engage with them. Instead of sending a lot of emails to engage with the customer, sending what could be useful information will help nurture your customers. Email campaigns reminding customers about accessories for a product they bought, such as batteries or lenses after a camera purchase, suggesting a pair of red earrings to go with that red dress a customer bought recently, understanding the age of a baby based on the size of the diaper purchases and then doing age-based email campaigns - there are many ways to engage with returning customers and giving them relevant information. To identify who is a returning customer you need to use tools that analyze profiles at granular levels, such as KissMetrics, MixPanel and NudgeSpot rather than aggregate analytics tools. Unique Visitor to Customer Conversion This conversion focuses on figuring out how many unique visitors become customers. Visitors may visit your store multiple times before buying something. Instead of focusing on visits, determining how many unique visitors buy is useful in understanding the quality of your traffic sources. One problem with focusing on granular, micro conversions is that you may lose sight of why you are doing any of this. It is still important to understand what your overall conversion rates are and compare them to previous rates. Using focused conversion does not mean you throw away overall conversion rate. Instead, you should use these granular conversions as an implementation detail to improving your overall conversion. This means that if you want to go from an overall conversion of 1.5 percent to 3 percent, you use these other conversion rates so that you can pinpoint where you are not performing well and start improving. References Kaushik,Avinash.“Web Analytics Segmentation: Do Or Die,There Is No Try!” Occam’s Razor.18 May 2010. Demery,Paul.“Retailers plan to spend more on text ads this year.” Internet Retailer.12 May 2011. Rueter,Thad.“A conversion boost for online retailers.” Internet Retailer.13 Sep 2011. Brown,Alex.“Stages of the Consumer Buying Process.” udel.edu. Redbord,Michael.“How to Leverage the 5 Stages of the Customer Buying Cycle for More Sales.”HubSpot.HubSpot,Inc.,06 Jul 2011.