It’s the Year 2010 – Did You Know That You Can Manage Your Website Conversion Rates?

6 January, 2010 | Author: zagano | My profile on Hiconversion

How is it possible that more than 10 years since the demise of ‘eye balls’ as a measure of website performance do we find that we are still stuck in the “number of visitors” paradigm? Learn how to convert visitors into sales, instead of how to count them.

One would think that the days of ‘dot-com’ businesses are the distant past. Lessons learned. Dues paid. We know better today.

Well, take look at the online marketing business. How is it possible that more than 10 years since the demise of ‘eye balls’ as a measure of website performance do we find that we are still stuck in the “number of visitors” paradigm?

E-Commerce Metrics: Data Overload

The issue is not about availability of website analytics data. Actually, it is the opposite. This way, online marketers are hit by mountains of non-relevant and non-actionable data.

That is why for the majority of companies, the number of web visitors is still the main KPI (key performance indicator). We all understand what that number means and thanks to Google, Yahoo!, Bing and armies of SEO consultants, we all know how to increase it (with the help of hard dollars or soft marketing actions).

On the other side, the conversion rate numbers are quietly swept under the rug. They are treated as temperature readings that nobody can control.

Well, let us break the news. Website conversion rates can be controlled and a ‘website thermostat’ already exists. Can your company afford not to use it?

A Beginning Of A New Marketing Era

The Adobe’s $1.8 B acquisition of Omniture (one of the largest web analytics and web optimization companies) marks the beginning of mainstream adoption of smart website management technology (i.e. the use of a ‘website thermostat’).

The main theme of this acquisition is that ‘Marketing is the new finance.’ The historic shift from traditional to online medium and its associated ability to collect and act on marketing data in real time is impacting the corporate marketing function in similar ways as the advancement of computer has impacted the finance industry in the 60s.

So, how should this impact your thinking and behavior?

Here is a simplistic picture of the online battlefield. On one side you have a limited number of qualified visitors (potential buyers). On the other side you have ever-increasing number of e-commerce merchants and lead generation companies competing for web visitor attention.

Getting more web visitors is increasingly hard and expensive for many companies. Just check the latest PPC numbers for your keywords. Organic SEO and social marketing are great, but not every company can earn its place on the fist page of the Google’s search.

Smart companies have already discovered that a small investment in CRO (conversion rate optimization) is producing dramatically higher ROI than the alternative investment in traffic generation.

Simple Practical Steps

CRO is not as complicated as you might think. Here is a simple 3-step framework to get you up to speed:

Step #1: Get familiar with your conversion rates

Macro Conversion: The first big number that you have to understand is CCR (customer conversion rate). This is the ratio of Web site orders to Web site visits (you may also see this referred to as the “sales closing rate” or “sales closing ratio”). This is the most important number affecting your bottom line. If you could find a way to increase your closing rate from 2 percent to just 4 percent (and some of our clients reach CCRs of 5-10 percent), you will have doubled your sales without having spent an extra penny on marketing.

Micro Conversion: You can envision your website as a multi page sales funnel. Your global CCR is a by-product of micro conversions at the page level. This is where the opportunity for improvement lays. By increasing the conversion rate of your product or checkout page, you will increase your macro CCR rates.

Free Tools:

Google Analytics
Yahoo! Analytics
Hiconversion CR Meter (note: point and click setup; continue with multivariate testing without any additional website setup)

Step #2: Understand different testing methods

A-B Testing: A-B testing is great for the evaluation of a radically different page design. Though, it is quite ineffective for the testing of small changes to the existing design.

Multivariate Testing: Multivariate testing, often called the Taguchi testing method, is the most effective way of experimenting with many small changes on your existing web page. Downsides of this method include a need for significant web traffic and temporary dip in conversion rate during the test. High traffic requirements are a huge obstacle for mid to small companies. Temporary dip in conversion rate is often a risk that is not acceptable for many e-commerce organizations.

Adaptive Multivariate Testing: Unlike traditional multivariate testing, the Adaptive Multivariate Testing method is adopting to visitor behavior in real-time. This method requires a fraction of web visitors needed by other solutions making it possible for mid-to-small companies to use multivariate testing as well. It is also increasing website conversion rates even during the test itself giving companies the freedom to test as often as they want without fear that they will lose money during the test.

Step #3: Play

The barrier to the adoption of CRO is at an all time low. You do not have to spend many thousands of dollars per month just to try multivariate testing. Google’s Website Optimizer and Hiconversion.com are offering great solutions that are free to try or use.

We believe that marketing is rapidly becoming science rather than art. With the start of the new decade you have an opportunity to enhance your online marketing playbook with the conversion rate optimization capability. This is a virtually risk free method for increasing online sales.

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