The 7 best ways to improve website conversion and sales for larger e-commerce businesses. Mark Patron & Melanie Gettings December 2013
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1 The 7 best ways to improve website conversion and sales for larger e-commerce businesses. Mark Patron & Melanie Gettings December 2013
2 introduction Over the past 5 years RedEye has partnered with Econsultancy to produce the Conversion Rate Optimization Report. The report has been used by thousands of digital marketers to improve website conversion. Compared to smaller companies, large e-commerce companies (those whose revenues are over 10m+) are able to invest in more expensive methods (such as usability testing), are more able to integrate methods (such as usability and analytics) and are more focused on sales as a conversion (rather than registrations or information requests). However, satisfaction with conversion rates is low. When looking at the data it is clear that larger companies are investing in the wrong methods; the top methods used by these companies do not correlate with the methods viewed as most valuable. (See Fig.1.) The main barriers cited by larger companies, when it comes to improving conversion, are lack of resources and budget. However, this is the same no matter what the size of the company; therefore no matter how much resource or how much budget you have, it is likely it will never be enough. What larger companies can improve though is how efficiently they use the budget and resources available, investing in methods that are valuable rather than easy to implement. Fig.1: Methods used versus value (e-commerce and 10m+) 70% 60% 50% 40% 0% Looking at the research received over the past three years we analysed the methods and strategies used by large e-commerce companies that are both satisfied with conversion and have successfully improved conversion/sales (see appendix for more information on the data). We then selected the 7 best ways to improve conversion based on what large e-commerce business found most valuable and what ways were most correlated with improved conversion. Methods Used Highly Valuable The rest of the paper looks at theses 7 methods/strategies associated with success. 2
3 1 MVT & A/B TESTING 2 USABILITY TESTING 3 CUSTOMER JOURNEY ANALYSIS 4 SEGMENTATION 7 WAYS TO IMPROVE WEBSITE CONVERSION 5 CART ABANDONMENT ANALYSIS 6 HAVING A STRUCTURED APPROACH 7 STAFF INCENTIVES 3
4 1 MVT & A/B TESTING Rated as the two most valuable methods for improving conversion, MVT followed by A/B testing gives testing the top spot for ways to improve conversion. A/B testing enables you to show half your visitors one set of copy and the other half another. Fig.3: What areas do you test? 90% 80% 70% 10m+ e-commerce Multivariate testing allows you to carry out many tests concurrently. Companies who had an increase in sales did on average twice as many tests as companies that saw no increase in sales or a decrease. (See Fig.2.) According to our research, the website is the most commonly tested area, followed by landing pages and then . (See Fig. 3.) Setting up tests is the top issue for companies. (See Fig. 4.) There are infinite possible tests that can be run, so it is no surprise that prioritising and deciding what to test are the second and third most challenging areas. 60% 50% 40% 0% Website Landing pages Paid search None advertising Fig.4: When implementing testing on your / their website what stage do you / your clients find most challenging? (All company respondents) Sales Average number of tests per month (e-commerce) Average number of tests per month ( 10m+) 25% Large increase % Small increase % No change Decrease % Setting up tests Deciding what to test Prioritising tests Designing test variations Analysing the results Running the tests 4
5 2 USABILITY TESTING Usability testing with eye tracking is the best way to understand how your site design is performing and why your customers are doing the things you see in the web analytics data. Proper usability testing is not cheap but it is less expensive than not doing it. To get support for including usability testing in your website optimisation process show key stakeholders and senior management highlight clips from usability testing showing users struggling to achieve key goals. A/B and multivariate tests can take a number of weeks to generate a statistically robust answer. So you really can t afford to do random testing. Usability testing is a good way to help prioritise tests. 5
6 3 CUSTOMER JOURNEY ANALYSIS Customer journey analysis should be the first step in understanding what customers are doing on your site. Customer journeys are rarely a simple sales funnel. Web analytics businesses (including us!) have done the industry a disservice by pretending customers simply go through a sales funnel. You really need to consider all the primary user visit goals (e.g. product research, pricing research, registration and purchasing). A key challenge is cross device reporting and analysis, so you ideally want to work with a supplier who can track users across different devices effectively. To unravel the complexity of customer journey analysis, it requires a combination of UX (user experience) and web analytics skills. By understanding customer journeys you can start to plan how you pull your customers through your site rather than try to push them. This is more commonly referred to as inbound rather than outbound marketing. 6
7 4 SEGMENTATION 10m+ companies whose website conversion had improved over the previous 12 months used 63% more ways to segment their customers than companies whose conversion had not improved. The figure for e-commerce businesses was 55% more. The number of websites doubles every five years and digital content doubles every 18 months. As more and more websites and webpages compete for attention they need to become more relevant to the user. A good way to make web content more relevant is segmentation. Segmentation is the process of partitioning markets into groups of potential customers with similar needs or characteristics who are likely to exhibit similar purchasing behaviour. Website segmentation means showing different web content to different consumer segments (e.g. a fashion retail site showing different clothes to males and females). Website segmentation does not have to be difficult or complex. You can segment traffic via a simple drop down box. For example, different job titles or sectors get different user guides or customer journeys. You can also segment registered and non-registered traffic using cookies. Many vendors, (including RedEye) can segment website content for different user groups. This is an area that will develop quickly over the next few years as vendors work to make segmentation easier to implement. 44% OF LARGE E-COMMERCE COMPANIES RATED SEGMENTATION AS HIGHLY VALUABLE Segments should be: 4 Large enough to be economic 4 Have similar attributes 4 Reachable or targetable 4 Relevant to business needs 4 Actionable Segmentation development is a long term process that does not need to be difficult or complicated if it is done in small easy steps. It is better to get going with something that can be improved rather than wait for perfection. 7
8 5 CART ABANDONMENT ANALYSIS For e-commerce sites the shopping cart is the place where things most commonly go wrong. The shopping cart is therefore one of the main opportunities for improving conversion and sales. There are many reasons for cart abandonment. The consumer may be comparison shopping, they may not like the price or the delivery cost. Similarly there are many ways to improve cart abandonment. Is the navigation of the checkout process simple? Are the delivery rates competitive? Is all the information clear and concise? Is the check-out prone to errors? Is the returns policy explicit? Does the check-out look secure? Use your web analytics data to find where there is any large drop-off and then apply UX skills to understand why this is happening and what you can do about it. THE AVERAGE DOCUMENTED ONLINE SHOPPING CART ABANDONMENT RATE IS 67%2 41% OF RESPONDENTS IN THE CRO REPORT RATED CART ABANDONMENT ANALYSIS AS HIGHLY VALUABLE 8
9 6 HAVE A STRUCTURED APPROACH For the last five years the Econsultancy/RedEye CRO Report has consistently found that having a structured approach was one of the most predictive variables for success with website conversion. Not surprisingly for e-commerce businesses having a structured approach is also important. Figure 5 shows 38% of e-commerce companies who had a large increase in sales had a structured approach to improving conversion rates, whereas only 12% of companies that had a decrease in sales had a structured approach. Larger organisations are nearly twice as likely to have an increase in sales if they have a structured approach to conversion rate optimisation (see Fig. 6). Fig. 5: A structured approach and reported change in sales (e-commerce) 100% 90% 80% 70% 60% 50% 40% organisation have a structured approach to improving Yes organisation have a structuredapproach to improving No Conversion rate optimisation cannot be a one-off project. With the constant increase in competing webpages improving website conversion has to be a continuous process. You cannot continuously improve a one-off project. 0% Large increase Small increase No change Decrease Specifically, have any of the following conversion rates improved? Sales Fig. 6: Structured approach and reported change in sales ( 10m+) 100% 90% 80% 70% 60% 50% 40% organisation have a structured approach to improving Yes organisation have a structured approach to improving No 0% Large increase Small increase No change Decrease Specifically, have any of the following conversion rates improved? Sales 9
10 7 INCENTIVE STAFF Conversion rate optimisation is not just a technology driven thing. People and processes are equally important. Figures 7 and 8 show that incentivising people directly responsible for website conversion is more likely to lead to more sales. E-commerce companies who had a large increase in sales where nearly twice as likely to incentivise their staff to improve conversion than companies who had no change or a decrease in sales. Fig. 7: Staff incentives and reported changes in sales (e-commerce) 100% 90% 80% 70% 60% 50% 40% organisation incentivise staff based on improving Yes organisation incentivise staff based on improving No 0% Large increase Small increase No change Decrease Specifically, have any of the following conversion rates improved? Sales Fig. 8: Staff incentives and reported changes in sales ( 10m+) 100% 90% 80% 70% 60% organisation incentivise staff basedon improving Yes 50% 40% organisation incentivise staff basedon improving No 0% Large increase Small increase No change Decrease Specifically, have any of the following conversion rates improved? Sales 10
11 APPENDIX This white paper is based on survey data collected for the Econsultancy/ RedEye Conversion Rate Optimization Report over the last three years. There were over 2500 respondents to the online surveys between 2011 and Fig. A: Respondents to the Conversion Rate Optimization Report, by sector Survey respondents included both client-side (in-house) organisations who want to improve their conversion rates, and agencies, vendors or consultancies (supply-side) who are involved in trying to improve conversion rates for their clients. The findings in this report are shown only for client-side (i.e. company respondents ). Two further filters were applied, only companies who had 10m+ revenues (410 respondents) and were from an e-commerce sector defined as retail, travel, financial services or gaming (542 respondents). There were 212 company respondents who were both e-commerce and 10m+. The pie-chart in Figure A shows the split between the four e-commerce sectors as a percentage of all client-side survey respondents. All stats featured in this report (unless otherwise referenced) have been taken from analysis of the 2500 respondents to the Conversion Rate Optimization survey. FURTHER REFERENCES 1 Econsultancy/RedEye Conversion Rate Optimization Report, , (latest report can be sourced from: all other reports available on request through Econsultancy) 2 Baymard Institute, 22 Cart Abandonment Rate Statistics, 2013 Retail Financial Services (including insurance) Travel Gaming (sourced from 11
12 THANK YOU Thank you for your interest this his report. If you would like any more information on anything mentioned in this report or any further information please or contact: RedEye London 26 Grosvenor Gardens, Victoria, London, SW1 0GT Tel +44 (0)
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