It may be the most common problem ecommerce businesses face: plenty of traffic but few sales. Converting visitors into customers is a blend of both art and science and, once it’s understood, it’s a skill that will reap rewards for a company’s bottom line.
The Web Analytics Association defines conversion as a “percentage of a visitor type who complete a multistep conversion process with a defined beginning and end within 30 minutes, whether it be signing up for a newsletter, buying a product online or some other desired outcome.”
In the end, it’s simple: Did the customer do what you wanted him to do?
Bryan Eisenberg, chairman of the board of directors for the Web Analytics Association, co-founder of Future Now, Inc. and co-author of Waiting For Your Cat To Bark — Persuading Customers When They Ignore Marketing, says successful conversion is about knowing your customer and focusing on the end result.
“How effective are you getting visitors to take the action you want them to take?” Eisenberg asked. “To buy, subscribe, click on link and get a lead, all are considered a conversion. You must persuade the customer to take an action.”
Despite the fact there are more people using the Internet, websites are featuring more products and better technology and broadband access has become pervasive, conversion rates have declined.
Eisenberg noted that conversion rates were at 3.2 percent in 2002 and then dropped to 2.4 percent the following year, rose slightly to 2.6 percent in 2005 and dropped again to 2.4 percent in 2005.
Why did conversion rates drop?
Most ecommerce site owners haven’t spent time learning their customers’ needs and don’t fully understand the buying cycle, according to Kevin Gold, CEO and co-founder of Enhanced Concepts, Inc..
“People frequently think of conversion as driving traffic to a site while not thinking of the people behind that traffic with all their different needs,” Gold said. “Conversion is a blend of many disciplines. It looks at how visitors get to a site; it creates relevancy and engagement once at the site, and it’s guided by specific calls to action to lead visitors through the buying process.”
Gold said the process should begin by defining the “perfect customers” for a site and understanding their intentions when they land at your site.
The Website is an Employee, Make it Work for You
Once you have determined what you want your site to do, conversion is how many people do it, said Mat Greenfield, founder of Conversion Results (Conversionresults.com) and a columnist with this magazine. He said you should have the same high expectations of your site as you would for an employee.
“Your website should function like any other corporate resource, like an employee,” he said. “It’s either contributing to bottom line in some way or it isn’t. If it’s not, fire it and get a new one.”
Greenfield said some key contributing factors to converting visitors into customers are:
- When you understand what your goals are, use that goal as a litmus test to determine what should and should not appear on your site. Many people have too much clutter on their site which causes distractions for visitors. Once you have a goal, you only need to put on your site what’s needed to accomplish that goal. Nothing more, nothing less.
- Understand your target audience. Recognize who they are and what they are looking for. Construct your site so the sequence of action is appealing to the target audience. Too many sites are constructed to meet a CEO for marketing director’s desires rather than viewing the process from the customer.
- Recognize a web project is a marketing project, not a graphic design project. “I understand graphic design plays a role, but putting design ahead of marketing goals sets a business up for failure,” Greenfield said.
- Always measure success. You can’t improve what you don’t measure. “In any business activity, if you haven’t set up metrics for success or defined goals, the project can’t provide you value,” Greenfield said. “Too many companies have a site because everyone has one. With that attitude, they are missing an opportunity to capture and engage current and potential customers.”
What is the Customer Thinking?
Eisenberg says operators of successful sites know their customers well, anticipate the questions customers are going to ask during the buying process and answer those questions at the right time.
He noted that all customers tend to go through a similar process:
- The buying process. They have a need/want and initiate an information search. Rather than relying on traditional forms of advertising or asking their neighbor for a recommendation, people often turn to Google, Yahoo!, MSN, etc., making keyword management a critical strategy for web businesses. “The web has expanded how people seek information,” Eisenberg said. “Many business owners don’t understand how to influence potential customers from a search engine.”
- Evaluating alternatives. After gathering information, customers begin making choices and evaluating options. They choose “business A” over “business B,” and they leave a search engine wanting to buy. When customers had only a few local choices, evaluating alternatives was easier. Today, with global choices at their fingertips, the marketplace is very competitive.
- Make a decision. Customers arrive at your site wanting to buy, but they still have questions. Does your site, in a simple and concise way, address concerns your customer may have?
- Make a purchase: This is the reason you’re in business. Perhaps they purchase online or visit your brick-and-mortar store. Eisenberg said a “huge percentage” of customers who will make a purchase do research online, but will purchase offline giving multichannel business an advantage.
Your Website is Your Sales Team
Eisenberg points out that a retail salesperson wouldn’t sell the same product the same way to different people who walk into his store. Why should a website be so static that it treats all customers the same? It shouldn’t.
Susan Minniear at Google’s “Conversion University” notes that if your landing page has multiple products and promotions, you’re probably committing “conversion suicide.”
“You must convince the visitor that the landing page is just for them,” Minniear wrote.”Avoid using home pages or all-inclusive multipurpose landing pages. Create specific landing pages for every ad and paid search term.”
Minniear notes that custom landing pages are important for pay-per-click advertising because you’re creating consistency from keyword to ad to landing page.
Using a unique landing page also helps an ecommerce owner track the conversion rate of each ad and landing page combination.
Unlike traditional “Main Street” businesses, a website isn’t able to personally engage a customer, probe for specific needs, hear a customer’s concerns and provide answers to overcome any objections.
A customer still has needs, concerns and objections, but a successful website must anticipate each of those items and successfully address them as the customer moves through the buying cycle.
“The Internet is a wonderful resource and tool because the user is in complete control,” said J.C. Stites, founder and CEO of Autodemo. “The users get to choose what they want to do. That is an interesting dynamic when you’re trying to change behavior of someone in charge of their behavior.”
Stites’ company creates online demos to help ecommerce sites better explain their products and services. “You don’t want to make the user have to think,” Stites said.
“You need to provide things to him in a seamless way. Too many people think about how to make it easy to sell products and services. It’s not about that. It’s about how to make it easy to buy. Turn around to look at it through the user’s perspective.”
One company that has seen success with Autodemo’s product is Bid4Spots.
Bid4Spots allows advertisers and radio stations to take part in reverse auctions through an online bidding process. Advertisers access cost-effective radio airtime from 2,100 stations nationwide and radio stations can increase revenue by selling last-minute inventory. Though the concept of linking to groups that need each other is pretty basic, the sales approaches directed toward advertisers and radio stations are distinctive and full of specific details. Bid4Spots turned to Autodemo to create two, three-minute online demos explaining the programs, according to Marketing Manger Scott Gelman.
The results were immediate. In the first month of having the demos on their site, Gelman said Bid4Spots’ conversion rate jumped 17 percent. With $1.5 million in advertising awarded through the Bid4Spots company during the past year, recouping its investment with that type of conversion increase should take only about two months, according to Gelman.
Stites said the average demo costs between $7,500-$12,000 to produce.
“If a site has thousands of people on it, depending on cost of their products, for every percentage point you can move the needle, profits start coming back to you quickly,” Stites said. “If you can increase conversion by 10 percent, it can have dramatic impact on your business.”
It’s a Visitors-first Philosophy
A healthy bottom line is about attracting quality visitors and the actions those visitors take. What does the visitor want? What will he find when he arrives at a landing page on your site? Will his questions and concerns be addressed during the buying process? Is the process to buy something on your site too long and cumbersome? Will he have confidence in you to be trusted with his credit card and deliver him a product? Answering these questions is the first step to improving your site’s conversion rate.
Investing in what’s necessary to convert traffic to into customers can pay dividends.
“Think in financial terms,” said Gold “Visitors to a site represent an expense. Pay-per-click paid for those visitors. Other expenses include SEO costs, costs for an email list, publicity and so on. Conversion is essential to take that overall expense and turn it into revenue. If you can increase conversion by small percentage, a direct dollar drops to the bottom line.”