Creating website conversion strategies to improve ROI
Over the last four years we have completed research with thousands of digital marketers in collaboration with Econsultancy reviewing what they are doing to improve their website conversion. There are literally hundreds of different ways to improve conversion and we know digital marketers battle to know where to start. However, based on this year’s in-depth analysis, we believe we have now managed to break a very complex issue down to the five most important ways to improve website conversion. These are:
- Responsibility: Make one person responsible for website conversion, give them authority and accountability, plus ideally a financial incentive.
- Structure: Implement a structured approach. Conversion rate optimization needs to be a systematic process, not a one off project.
- Testing: A/B or MVT is the best way to keep improving your website performance.
- Usability Testing: The best way to understand why your customers are doing the things they are doing on your website.
- Segmentation: Always use segmentation for actionable insight and targeted communication.
Our infographic summarises how marketers use CRO now and how they can improve it in the future:
So how did we arrive at these top five methods?
Firstly, we looked at what survey respondents highlighted as the three most valuable methods: Testing (both MVT and A/B), Usability testing and Segmentation.
We found that companies whose conversion rates have improved over the previous 12 months are performing on average 24% more tests to improve conversion than those companies whose conversion rates have not improved.
Companies who had a large increase in sales did nearly twice as many tests as average.
Companies with £10 million plus revenues who integrated usability testing and analytics well were more than twice as likely to have seen a large increase in sales as those that didn’t.
Companies whose conversion improved are using 90% more ways to segment their visitors and customers than companies whose conversion rates have not improved or have stayed the same.
Next we found through data analysis that the four variables most strongly correlated with improved website conversion and sales are:
- Perceived control over conversion rates
- Having someone directly responsible for conversion rate optimization(CRO)
- incentivizing staff based on conversion rates
- A structured approach to CRO.
Note top 3 are all people issues and all related to authority, responsibility and accountability so we have combined them into one of the top five ways to improve conversion.
For each of these three people related issues we found that companies who had a large increase in sales were on average twice as likely to be doing them compared to companies who had a decrease or whose sales had not changed. Similarly twice as many companies who had a structured approach to conversion had a large increase in sales compared to companies who had no change in sales.
Most of the five ways to improve conversion doubled the chance of having a large increase in sales compared to a decline or no change. When we analysed companies who were using three or four of the methods the results were even more impressive.
We found that companies who had a large increase in sales were on average five times as likely to be using these three or four methods compared to companies who had a decrease in sales.
Over the last five years the average retail conversion rate has more than halved from 8.4% to 3.8%. At the same time the UK e-commerce market has doubled from £30.2bn to £60bn plus. This decline in conversion is largely due to a move from “online purchasing” to “online shopping”.
Consumers now have much more choice and do more comparison shopping with several browsers open. In addition improving website conversion is more complicated than spending more money on generating traffic with, say, Google. Currently for every $92 spent on acquiring visitors, only $1 is spent converting them.
So our premise is that spending money intelligently on Conversion Rate Optimization (CRO) should be a better investment than spending more money on generating traffic. Specifically by targeting your resources on these five methods you will get the greatest return.
A white paper will be released at the beginning of November 2012 expanding on this blog. If you would like to be sent a copy you can register your details.