Most likely your Conversion Rate is Wrong

I am sorry to break this news to you but chances are that your conversion numbers are all messed up. Let me demonstrate it with an example.

Let’s take a simple conversion process, see the figure below. Let’s assume that you get 100,000 visitors on your site, and 20,000 start the checkout process, 15,000 make it the next step and finally 5,000 end up converting.

Based on your web analytics tool your conversion rate will be 5,000/100,000 = 5% . So far everything looks good.

But what if your checkout path looks something like this?

Do you see the phone number? I bet many customers are using that phone number to complete the purchase. Are you taking those, who call and convert, into consideration when calculating the conversion rate? Do you know that when someone picks up the phone to call he/she has a higher likelihood of converting?

Taking the example above, here is how your conversion funnel looks like:

Most of the web analytics tools just allow you to see a view of single channel conversion rate i.e. web conversion rate. However, as I discussed in my post "Are you Optimizing the Wrong Steps of the Conversion Process?", customers don’t care how your channels are divided or who is responsible for what channel at your organization. They care about their money and will use whatever channel they feel most comfortable with.

Are you going beyond single channel when calculating your conversion rate? If your answer is no then your conversion rate is wrong.

Thoughts? Comments?

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Conversion Optimization: Go Beyond A/B Testing and MVT

A/B testing and MVT are a great way to help you drive more conversion on your website. A/B testing and MVT help you decide the best layout, headlines, images, message copy etc. that motivates the visitors to complete a transaction.

However, A/B testing and MVT will only get you so far. If a visitor does not complete a transaction during later steps of the funnel then there are generally other reasons than those that can be simply fixed by changing the page layout, copy, images etc. . Don’t get me wrong, I am not saying that you can’t improve conversions by optimizing later steps of the funnel. You can, but you will get to a point of diminishing return and you will need something else to drive more conversions. Moreover, the learning from A/B and MVT will only help you going forward but you will lose many customers while you are doing the tests.

Keep in mind that as a visitor moves down the conversion funnel his/her commitment to complete the transaction (convert) increases. If you are able to capitalize on that motivation in time, you will drive higher conversions.

Here are some of the ways to help you drive conversions from those visitors who walked away without converting (sales, download etc.):

1. On-Site Targeting – This is very effective technique to drive user to take desired actions. You can target visitors with personalized message/offer, prompting them to complete a transaction, when they come back to your site at a later time.
   
2. Remarketing or Retargeting via Ads– This works great to bring the potential customers, who have wandered away on the internet, back to your site. Using a service like Google Adwords you can reach your visitors on various sites which use Google Adsense. There are several remarketing services that you can use but Google Adwords, though not very sophisticated, is a good way to get started. Read my post on Google Adwords Remarketing before moving forward.
   
3. Online Chat – Online chats are a great way to make a human connection with the visitors while he/she is still on the site and in the buying mode. Some products/people need human interaction to persuade and a triggered online chat might just do the trick.
   
4. SMS - Everybody seems to own a cell phone these day, follow-up the shopping cart abandoners with an SMS message, hit the iron while it is still hot. SMS marketing is not very prevalent in US but is heavily used in many other countries.
   
5. Email Follow-up – Following up with an email is another excellent and widely used way to drive conversions from those unfinished conversions.
   
6. Phone Calls – Similar to online chat, phone calls have a human element to them. Phone calls work very effectively even in converting a person who might have decided otherwise. Phone conversion rate is generally a lot higher than web conversion rates and phone salesperson can even do upsell to drive more revenue/visitors, though the cost also goes up. Striking a right balance is critical and needs proper assessment and strategy.
   
7. Direct Mail - Yes it still does work in many cases.

Keep in mind that timing and right follow up strategy is very critical when contacting those that did not convert. If you do need help in this area send me a note.

Questions/Comments?

5 Things That Could Be Hindering Your Conversions

Forms are everywhere on the internet, some convert great while other don’t. There are several factors such as call to action, images, copy etc. that all contribute to the success of a form. However, even a well designed form might not convert well if some fundamental things are not taken care of. In this post I am listing 5 fundamental things that could be preventing the visitors from converting.

1. Consistency in Call to Actions – Consistency in call to action is critical for conversions. You cannot underline few links and not the other within the same context. Be consistent with your formatting. Making some links underlined while other not underlined makes user think harder than he/she should and increases the chances of bailout. See below; do you see the inconsistency in the links? I almost gave up on finding that “Register Now” link (yes it is obvious now because I have highlighted it).
   
   
   
   
   
   
   
2. Captcha – Captcha is meant to stop automated computer programs (spiders) from filling the forms but do you know that a Captcha can also deter people who are genuinely trying to fill your form? I suggest doing a simple A/B test on your form with a captcha and without a captcha to see if you captcha is eating up your conversions. This will help you determine if the captcha is worth the loss in conversion.
   
   
   
   
   
   
   
   
   
3. Confirmation Fields – Confirmation fields are the field that require users to fill in the same information again to ensure that user that has not mistyped the information e.g. password, email etc. However, confirmation adds one extra field that the user has to fill in, thus coming in the way of conversion. Take a close look at your confirmation fields and determine if you really need them. For example, is it really required to have the user confirm the password? If the user has mistyped the password during registration then won’t she be able to easily get it via “Forgot Password?” link? If yes, then do you really need to confirm the password during registration? Do you really need confirmation on sensitive information such as social security? It is scary (for most people) to provide social security number online and confirming it again just gives users another chance to bail out.
   
   
   
   
   
   
   
   
   
4. Form Validations – Validations on form fields ensure that the data user is entering is in the correct format. However many validations are not really required and come in the way of user trying to complete a form. Check your validations to ensure they are absolutely required, e.g. @symbol in the email address field, or not, e.g. “-“ between area code and phone number. Do not force the users into unnecessary and annoying validations. Keep in mind that a lot of data formatting can be done via client side JavaScript or backend processing without putting the customer through a lot of pain.
   
   
   
   
   
   
   
   
5. Data Fields – It appears to me that many companies like to collect the data just for the sake of collecting it without thinking how it will be used. Yes every piece of data you collect can eventually provide you more information about your customer but should it be really on your form at the expense of lost conversions? Your customers have limited time and adding more fields on your form might turn them away. Go through your form and remove any unwanted fields. If you don’t want to remove anything at this point, identify the fields and do a simple A/B test (one version as it is and the other one without those fields) to see how your conversions are getting affected.
   
   
   
   
   

Questions? Comments?

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Is Your Conversion Rate Wrong?

According to Web Analytics Association (WAA) standard definition, a conversion is a visitor completing a target action.

Conversion rate is calculated by total number of visitors completing a target actions divided by a “relevant denominator” (Sometimes it is total number of target actions divided by a “relevant denominator).

The key here is “relevant denominator”. This is often ignored by many organization and they tend to use the default denominator provided by their Web Analytics tool provides. The most common denominator used by most of the tools is either total visits or total visitors.

If you are an eCommerce site then potentially every visitors or visit is a target for conversion and “Total Visits” or “Total Visitors” as a denominator might make sense. However if your site is a non-eCommerce site and conversion to you means getting people to register on the site then using a denominator like total visits or total visitors to calculate conversion rate, wrongly assumes that all of the visits to sites have not previously converted (registered) and hence are potential conversion worthy. We all know that’s not the case. These sites get a mix of visitors, visitors who have registered in past and are not going to register again and, visitors who have not registered yet and hence are a potential target. Examples of such sites are facebook, WSJ.com, espn, yahoo etc.

Calculating the Right Conversion rate

In my examples I will assume that number of visits is equal to the number of visitors.

Hypothetical site in our examples is a portal that requires visitors to login (register) for some actions but also has content that does not require a login.

This sites gets an average of 1000 visits a day and gets 50 new registrations (conversions) a day. By most common way of calculating the conversion rate, the conversion rate for this site is 5% (i.e. Conversion Rate = Conversions/Total Visits = 50/1000 = 5%)

Let’s assume that every day this site gets 50% of the visits from the people who have registered in past. So that means 500 (50% of 1000) are registered and won’t register again. Since they are not going to register, why do we even consider them when calculating the conversion rate? By removing them from the calculation of conversion rate, the new conversion rate becomes:
50/500 = 10% (Immediately you doubled your conversion rate)

Why is this important?

Let’s look at two scenarios to illustrate the importance of choosing a relevant denominator.

1. Scenario 1
   One day the customer retention department sends some emails to previously registered visitors that result in 500 more visits from people who had previously registered. As a result the site got 1500 instead of 1000 visits it used to get every day. Considering that nothing else changed on the “not-registered” visitor base, the site got 50 conversions, just like any other day.
   
   Using “Total Visits” as the denominator, it appears that the conversion rate drops to 50/1500 = 3.33%
   
   It looks bad, and might cause you to panic. Won’t it? However if you choose the right denominator you will find out that nothing really changed. The pool of people who had not previously registered is still 500, so the true conversion rate is still the same
   50/500 = 10%.
   
2. Scenario 2
   The “customer acquisition” department bought a new email list and sends emails to this list which resulted in 500 extra visits. Overall the site got 1500 customers, 1000 who had never registered and 500 who had registered previously. That day the site got 60 registrations, resulting in a conversion rate of
   60/1500 = 4%.
   
   Look like our email list did not work because it caused the conversion rate to go down.
   
   This might cause you to wrongly assume that the email list that the retention department bough was not as good as the other traffic that you have been getting. However when you calculate the true conversion rate, it turns out that the email list actually worked; it resulted in a conversion rate of 6% (60/1000).
   

Note: Some might argue that why won’t this company tag all the emails with proper campaign identifiers so that we can track the performance of the emails. In theory this sounds great and that’s how it should be. In reality though, many departments work in isolation and never interact with the ‘Web Analytics” or follow their best practices. Now you know why marketing departments should share the marketing calendar/activities with “Web Analytics” group and involve them before running any campaign.

Hope this gives you an a reason to investigate what denominator you are using in your conversion rate.

In the next post, I will show you how you can calculate the “True Conversion Rate” using Google Analytics.

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Is CAPTCHA Eating Up Your Conversions?

CAPTCHA acronym for “Completely Automated Public Turing test to tell Computers and Humans Apart” is a way for sites to block spam. According to Wikipedia it is

“A CAPTCHA or Captcha (pronounced /ˈkæptʃə/) is a type of challenge-response test used in computing to ensure that the response is not generated by a computer. The process usually involves one computer (a server) asking a user to complete a simple test which the computer is able to generate and grade. Because other computers are unable to solve the CAPTCHA, any user entering a correct solution is presumed to be human. Thus, it is sometimes described as a reverse Turing test, because it is administered by a machine and targeted to a human, in contrast to the standard Turing test that is typically administered by a human and targeted to a machine. A common type of CAPTCHA requires that the user type letters or digits from a distorted image that appears on the screen.”

Below is an example of a CAPTCHA on craigslist.



Though CAPTCHA is a great tool for blocking spam it could be coming in the way of user experience and resulting in a lower conversion than you would have had without it.

I have come across many sites where CAPTCHAs are totally illegible. Such CAPTCHAs not only deter SPAM but also valid human visitors. Even if the CAPTCHA is totally legible it adds one extra step between a visitor and the conversion. Sometimes it takes few refreshes of the CAPTCHA before a visitors gets it right, resulting in a very frustrating experience.

You can spend all your time doing A/B and Multivariate testing the form layout, images, text etc. but probably won’t move the needle if your CAPTCHA is the culprit.

If you have CAPTCHA on your site then I suggest following 5 checks to ensure you have a good CAPTCHA on your site.

• Clear - Is it clear to your visitors that you have to enter the CAPTCHA before the form can be submitted? Some sites don’t make it clear and leave visitors wondering why their form is not getting submitted. Make sure there is help available on CAPTCH if the visitors get stuck. Also make sure that there is a refresh button to refresh the CAPTCHA image incase visitors can't read it.


• Readbility - Check all your CAPTCHA images. Can you read them? Will you visitors be able to figure out what your CAPTCHA reads?


• Accessibility - Visually impaired visitors should be able to fill the form else you will loose them at CAPTCHA.


• Time – How fast is your CAPTCHA? If it is slow to load or validate you might be loosing conversions.


• Protection - Do you have a huge SPAM problem (that you need a CAPTCHA or did you put it because everybody else is putting them too? Keep in mind that event a CAPTCHA might not completely protect you from SPAM.

Is CAPTCHA hurting your conversions?

I suggest you conduct A/B testing to understand how CAPTCHA might be affecting your conversions. Create a version of the page that does not have CAPTCHA and test it against the control version (your current version with CAPTCHA).

Analyze the results. You should analyze the conversions you get from each version. Deduct any SPAM when calculating the conversion. Calculate true conversions per month/year from both versions. Make sure your results are statistically significant. Most likely you will see lower conversion from the version with CAPTCHA and higher SPAM from the version without CAPTCHA. Considering the impact of SPAM on your form, determine if the efficiency (clean data) gained by having CAPTCHA on your form outweighs the gain of extra conversion when you remove CAPTCHA. If CAPTCHA is doing more harm than good then remove it.

Examples of CAPTCHA


This CAPTCHA is hard to read but has help and accessibility built into it


This CAPTCHA is hard to read and does not have accessibility



This CAPTCHA is easy to read and has help and accessibility built into it

Have you seen a bad CAPTCHA that caused you to leave the site? Send me the link.

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What Is Your Conversion Rate?

When most marketers and analyst talk about conversion rate they seem to quote around 2 to 3% as the average conversion rate. Bryan Eisenberg wrote a great article on this subject titled The Average Conversion Rate: Is It a Myth?

In this article he writes:
“The sites that should convert 2 to 3 percent of their traffic are the exception, not the rule. I've long stated that sites that convert less than 10 percent should be concerned. Consider this along with the rising cost of online traffic, and the concern becomes a nightmare. Too many online marketers are spending too much money and time throwing too much unqualified traffic at their sites, then tweaking their traffic quality trying to reach the 2 to 3 percent mythical conversion rate.
If more online marketers focused their efforts on studying visitor intent and site optimization, instead of just driving traffic, their average conversion rates would be much, much higher.”

To inspire you or to make you depressed (the choice is yours) here are some of the top conversion rates for e-commerce sites as reported by Marketingcharts.com.



Source: Marketing Charts (via Nielsen Online)
Note: To be considered, e-commerce sites must have had a minimum of 500K unique visitors during the month. Conversion-rate data is based on visitor conversion rates, not session conversion rates: i.e., No. of unique customers/No. of unique visitors.

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Shopping Cart Abandonment and Conversions

Shopping cart abandonment is a huge challenge for online merchants. eTailers are constantly struggling to understand how they compare to other eTailers and the reasons of cart abandonment so that they can improve their conversions.
Yesterday I came across some interesting survey data that will help shed some light on the average abandonment rates, conversion rate and the main reasons for cart abandonment.

Industry averages

The following charts are from MarketLive Performance Index Volume 4




Q1 2008


Note: “1-and-out” is commonly referred as “Bounce Rate”. I also conducted a survey on Bounce Rates, you can find the results at http://webanalysis.blogspot.com/2008/03/typical-bounce-rates-survey-results.html

Reasons for Cart Abandonment

A study conducted by Paypal and comscore showed the following reasons for cart abandonment




Chart Source: eMarketer.com

• 43 percent of consumers didn’t pay for items in their shopping carts because shipping charges were too high


• 36 percent of purchasers didn’t pay for items because they felt the total cost of the purchase was more expensive than anticipated


• 27 percent of shoppers didn’t pay for items because they wanted to comparison shop at other Web sites before making a purchase


• 16 percent of consumers didn’t pay for items because they could not contact customer support to answer questions


• 14 percent of shoppers didn’t pay for items because they forgot their usernames and passwords for their store accounts created with the merchants


• More 20% shoppers didn't complete purchases because their preferred payment option was not offered on the merchant's Web site


• 21 percent did not complete online purchases because their wallets were not easily accessible

You might also be interested in Targeting Cart Abandonment by Email
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