Why does conversion *rate* matter anyway?

All that seems to matter are conversions: How many sales you made, how many leads you gathered, how many people met their needs on your web site. So why (and when) does anyone care about the rate of conversion? After all, if the New York Times linked to your site, you’d have a lot of extra traffic, but it might not be well-qualified. All those extra visitors would increase the denominator of the conversion ratio, but there might only be a couple of extra sales. Your conversion rate would probably plummet during that time period — but you made extra money. So why care about rate instead of absolute conversions?

There are some specific (and very common) situations and mindsets that cause website owners to care about the conversion rate:

When you are paying by the click (e.g. Google AdWords). If you pay a dollar a click, for example, and you get 5000 clicks, that’s $5000. Let’s say your average order size is $25. If your conversion rate is 2%, that translates into 100 orders, or $2500. So you lost money on the deal — because your conversion rate is too low (and because you are paying too much for the click, when the average ticket is only twenty-five bucks.)

When you are working with affiliate marketing. There are probably affiliate marketers who charge by the click (see above.) But most of the affiliate deals we see are pay per action — you pay Shopzilla or Pricegrabber or whomever for the conversion or for the lead. So why care about rate — after all, you only pay when the customer converts! The problem arises when affiliates see lots of traffic going to your site, but not lots of money coming back to them. They aren’t happy, they will want to cut better deals with your competitors. Likewise, if you have a great conversion rate, they’ll want to do special favors for you.

When you are getting traffic from organic search. It’s true that the traffic is free, in the sense that you don’t have to pay for each click. But whether you pay an SEO firm or an internal employee, your are probably paying *someone*. That’s an investment, and you want the highest return you can get on that investment - so the higher your organic conversion rate, the higher your ROI.

When you are paying for online PR. You might get lucky and get a link from the NYTimes, or better yet, your story might get picked up by the blogosphere, then picked up by the mainstream media, and you’ll be on CNN by nightfall. Those are the stories we hear about. Most of the time, creating your own buzz is a lot of hard work. Time equals money, so you can apply the same logic here as we did to SEO: the higher the conversion rate, the higher the ROI.

In fact, you could reasonably argue that the only forms of traffic that are “free” are referring links - sites that link to yours because they like your site — and bookmarked or typed in traffic. The latter group is often repeat users, and depending on your product, should have one of the highest conversion rates of all your segments.

And that’s why everyone cares about conversion rate.

My post on the Google Analytics Documentation contest is my most read post of all time, not in small part because Techmeme linked to it. So why don’t I have more comments (especially since I have been begging my friends to submit.)

Well, Cynthia Closkey pointed out that I had accidentally required people to register in my efforts to figure out how to avoid pingback spam (not that one has anything to do with the other - this reminds me of a customer who set every cookie possible just to try to make GA work.) And then I never got rid of it, making it incredibly onerous to comment.

All right all right, I fixed it, and there are just a few more days to add your criticism of the GA documentation. Win real prizes. So that’s both fame AND fortune. Google sees every comment. Check it out. And don’t require your customers to register before buying or your readers to register before commenting. Assuming you want the comments and the money, of course.

Robbin

ps notice that I got my t-shirt

Every day, or maybe every other day, we get a note in our email that usually take this format:

Hi LunaMetrics. Our conversion rate sucks is just terrible. What can you do to help us?

I don’t mind getting emails like this; after all, the potential customer is just starting a dialog that might lead to a big project. But I feel that it’s important for the potential customer to understand how much effort might have to go in to increasing a conversion rate.

Any more, I’ve starting to answer those emails with one of my own, and it goes something like this:

Let me not steal your money. Sure, we’d be happy to set up your analytics, and then collect enough data to read them and make recommendations, if you need that. We can do some user testing to find out what customers think (always incredibly valuable) and we can even do a conversion best practices analysis to tell you what we think. And we’ll have a great idea of why you aren’t converting well. But I don’t want you to think that we’ll do that analysis, you’ll make a few changes, and your conversion rate will magically increase. It requires testing, testing and more testing.

At the first Emetrics Summit I attended, in Santa Barbara, I heard Avinash Kaushik say, “80% of the time, we are wrong about what customers want.” Only by asking them - user testing, multivariate testing - can we see what they really want.

And then, let’s look at this problem a different way: when the problem is not the site, but rather, the position. I’ve seen too many sites that sell commodity items without a unique selling proposition. So after we do that user testing, we’re going to find out, for example, that users don’t know who you are, and they can buy your product for the same rate elsewhere, so why should they give you their credit card numbers?

This doesn’t mean that all commodity businesses have lousy conversion rates. On the contrary, one of our customers has a website to sell their commodity; their conversion rate would make your skin turn so green that you could get the part of Elphaba on Broadway. But instead of starting with, “What color should our buttons be?” or “What should the headline say?” they have consciously thought through the offer and the barriers to purchase, and have done everything they can to make this the best offer and easiest purchase you could ever want to make.

So before you write that email asking to increase your conversion rate, think about whether you have a unique selling proposition. And then, before you waste a dime, decide whether you are ready to put in the work to test and test and test in an effort to increase those rates. Because otherwise, I really do feel like I am stealing your money.

Robbin

While I am waiting for everyone to submit entries to the “Criticize GA Documentation” contest, I have to tell you about this great conversion clinic I did on Thursday.

You know how the SEO events have clinics, where people submit their sites, and a few experts evaluate problems/opportunities in real time? Well, I did the same thing for conversion - an “expert” analysis. I cautioned the audience that the best experts would be users, but that this might be one place to start.

It must have been a success, because after the event, four or five people came up to me and typed in their sites and asked me to do those evaluations, too. (Not surprisingly, that’s when I got to see the really low-hanging fruit.)

Here are some of the things that I saw across many sites:

Incompatibility with Firefox. Not a few website owners were surprised at the way their sites rendered in Firefox, and commented that some text didn’t show up, or that links were broken there.

No scent. Scent comes in lots of different flavors (ooh, there’s a good one), but one of the ways I want to see scent is inline links that enable me to pursue my goal (links right in the copy.) I saw pages and pages of text with no links.

Hidden Forms. I saw lots of B-to-B Contact Us forms that were hidden behind links. If that’s your goal, why don’t you have a form on every page, or at least, start your form on every page?

Hidden Phone numbers.. If a phone call is one of your most important calls to action, why don’t you have it at the top of every page? This is the same issue as the last one — why do people hide their call to action?

Navigation. I saw those standard B-to-B non-descriptive navigation terms: Home, Services, Products, About Us, Contact Us and Resources. (Why can’t anybody say what they sell in their navigation? Well, one lady did that.)

On-site search. I found very few on-site search boxes. The only one that I remember was from a lady who had a Yahoo! store.

It’s All About Us. Companies that talked about themselves instead of their customers.

You sell what? I saw this a lot, companies that didn’t make it clear what they sold. More than once, I had to ask a website owner, “Now, what is it you guys do or sell?”

I didn’t see a lot of “my nephew created it” websites, and no one required a sign-in before they allowed you to spend money. (Although one guy made his “sign in here if you are already registered” so prominent that it obscured the other options.)

I love to speak in public, and this clinic was more fun than perhaps any other presentation I’ve done. I couldn’t have done the seminar if it weren’t for the help that LunaMetricians Taylor Pratt and Shareen Jordan gave me (during the two minutes that I studied each site, they got up and talked about best practices in conversion, or analytics.) Also helping in that space was Tim Sweet from Nauticom. (He absolutely lives up to his name.)

End notes: Many thanks to Scott Baldwin for debugging our blog and showing me why Safari was so intolerant of the unmatched tag. And to the two people who already made submissions to my “Criticize GA Documentation” contest. So come on, come on, let’s get some more entries.

Robbin

Since it’s the weekend, I thought I could rant a little about Greg Niland’s recent podcast on testing your website. But first, a few nice things about Greg:

• He has the world’s most adorable laugh. And it is even more fun to hear it over the phone after you have heard him do it on fifty podcasts
• Unlike his SEO peers, he does a podcast for newbies. Most advanced web marketing professionals, be they in SEO or web analytics, want to show off their advanced techniques.
• He devotes a lot of his time to charitable causes.

But on to the main attraction. I only this week had a chance to hear his podcast with Shimon Sandler. The exact topic was “Making money the Unfun way.” Hmm, I thought as I started to listen. What will be so unfun here? Rewriting URIs? Playing with your robots file? Canonical issues?

Oh, I was wrong. The major unfun issue they wanted to talk about was testing.

Testing? Unfun? Well, I guess what is fun to one person might be boring to another.

But then guest Shimon Sandler, who is an SEO, put testing into two categories, A/B and Mutivariate, “also known as Taguchi.” Really? Greg asked, I’ve never heard of multivariate testing called Taguchi. Maybe multivariate testing was designed by someone named Taguchi, Shimon answered.

(For the record, very simplified: the Taguchi method is one way of decreasing the number of page views and conversions your test needs, as opposed to a full-factorial analysis, which uses every variation. Offermatica uses Taguchi; Google Website Optimizer uses a full-factorial analysis. The Taguchi Method was designed by someone named Taguchi, but as a way of applying statistics to manufacturing.)

Sandler rattled off a few names in the MVT field, but forgot (or didn’t know) most of the important ones. He knew Offermatica, Vertster and at least one other, but missed Optimost, Sitespect and Website Optimizer. And then, the two of them talked about what you could test. But being SEOs instead of conversion “scientists” or MVT jocks, they could only come up with SEO-type things to test. Your PPC ads. Your urls.

Well, everyone who works in testing knows that to make a difference, you should start by testing BIG things. Your headlines. Your buttons. Your shopping cart. Your call to action.

But what was I expecting? Greg needed to have someone from the testing world on that show. How about Sean Purtell from ROI Revolution? How about Ophir Prusack? How about Bryan Eisenberg?

Well, in closing my rant, I do want to give credit to Shimon Sandler for addressing the web analytics issue. When I called Greg and pitched him on doing a show on web analytics (back when our company wasn’t a Google Analytics Authorized Consultant, life was sane and I didn’t spend every weekend working), he told me that his listeners “just aren’t interested in logfiles.” (I tried to explain that not all WA is server side, but I don’t think he cared.)

Robbin

Brian Eisenberg asked me what my ideal report would be, if I could create just one report. The budget is unlimited, it can have as many dimensions as I like — but just one report.

So, my ideal report tells me why people are leaving the website for every page where there are exits. And then I can fix the site so that those who really needed the site could get what they need before they leave. (Hey, you said be creative. So I was.)

I think this is supposed to be a game of tag, but you know, I don’t like to play tag. I always want to hear what readers think. What would your favorite report be if you could have only one?

You know how you get to the end of a checkout form, and there is the opportunity to sign up for someone’s email marketing list? Unless you don’t notice it, or you really want to be on the list, you generally don’t check it; after all, who needs more email? So stick with me and see what I saw today.

Here I am, working on DataBazaar’s website (they sell printer ink). And as part of that process, I am pretending to buy a product.

So I get to the end of the checkout process, and instead of saying, “Please add me to your mailing list,” it says, “Please send me money saving coupons.” Talk about great writing for the web. Lots of people have email marketing lists that include coupons, but they tend to be worded in your average boring way: “Please notify me of upcoming coupons via your weekly email newsletter.” (I actually got that one off a competitor’s website.)

Do other people have great ways of asking customers to sign up for their email marketing (that work?) I’d love to hear.

Robbin

I stumbled upon (without using Stumble Upon) this really great conversion resource in the UK, Conversion Rate Squirrel. When they have time to write, they do some really cool things. They told me that one of their most popular and appreciated pieces is 101 Things to do with Website Optimizer. (I particularly interested in points #37 and #59 - those were new for me.) So read and enjoy.

Also, welcome Coremark Analytics to the blogosphere. Judah Phillips convinced me that the author is Wendi Malley, who works with the WAA Research Committee. But, who really believes Judah anyway? Well, Mystery Blogger, I hope you do more work on Statistics, we really need a great statistics blog.

Endnotes: Many thanks to Neil Mason, who taught me to stop writing “England” and start writing, “the UK.” Very special thanks to David Meerman Scott, who is publishing a new book, The New Rules of Marketing and PR, and who changed our blog address in his post. (He pointed out to me that the hard copy has already been printed. Ah, paper.)

Yesterday, I was talking to a potential client. Like most, he wanted to improve his conversion rate, and like even the biggest companies, he had to live within a budget. We discussed the pros and cons of doing user testing with 5-8 users vs. my doing an “expert” conversion analysis. The costs weren’t different enough to be a consideration.

“Don’t take this the wrong way,” he said, “But I highly doubt that I am going to learn anything with 5-8 users.”

Now, at some level he was absolutely right. Five to eight users would not be statistically significant. Nor, for that matter, would fifty or eighty.

So would one conversion analyst be more statistically significant? No. I can say, “Studies show that making the button red tends to work better,” but it might not work better for your site. Plus, it is incredibly hard for a best practices person to discard the “professional blindness” that knowing websites brings with it. (This is the reason that I don’t allow web designers to sign up for our user tests - same problem.) Web analytics are statistically significant, but we only know that everyone bails out on a page, we don’t know why. Multivariate testing is the best, but you still need to know what to test.

This is why I love user testing. It’s not that expensive, especially if you do it yourself. Sure, you won’t learn everything you always wanted to know, but when you hear four people out of five tell you that the deal isn’t good enough for them to be interested, you sure do know what to test.

Speaking of which, I think too many people think user testing is just usability. Usability does go hand in hand with conversion, but you learn about pricing, about trust, about what people notice on the page. And a great idea (I owe this to a LunaMetrics customer) is to do user testing on your competitors’ sites. That’s when you learn where they have elements that are worth testing on your own site.

Robbin

I never give any money to the Harvard Business School (HBS). So finally, they sent me a survey, asking why not.

(For the record: I always think that giving to the Greater Pittsburgh Community Food Bank is so much more important than giving to a corporation with a $25 billion endowment.)

Now, I applaud them for actually asking why I never give. But their survey was really lousy. And unlike companies, who may be stuck with a pre-packaged web survey from an outfit like BizRate, this is a school that can afford to buy anything they want — especially when it comes to raising money.

Rarely does someone pay for your time when you fill out a survey. So if I am donating my time, why don’t the people who put together the surveys allow me to skip some of the questions? If I don’t like a question, I’m going to lie, anyway, right? And if you had all the money in the world (like HBS does) you could even create a survey that points out that you missed a question and still lets you skip it (in case you don’t want to answer.)

Well, the HBS survey was one of those incredibly hard to fill out surveys — specific numbers of answers required here and there, not much thought put into usability. So finally, I wrote Bill Sahlman, the senior dean for external relations, since he had sent the original email.

Dear Bill: I tried to take your survey but never succeeded, due to error messages. {Screen shot of error message was included.}

I am a conversion scientist and web analyst. When you require people to answer questions, you lose them. It is even worse when they WANT to answer the question and can’t find the answer.

I wasn’t important enough for Bill to answer personally — despite how important I tried to make myself sound –  so someone named Courtney Fanning wrote me back.

I am replying on behalf of Bill Sahlman. The error your received is likely due to the limit of options. For some questions, you can only check 2 options. IF you check more than 2, it will not allow you to continue. Thank you for taking the time to complete the survey.

Sorry Courtney. I never took the survey.

End notes: I promise to go back to custom filters for Google Analytics later this week. Many thanks to Stephan Hamel (again) who updated this blog to www.lunametrics.com/blog in three places (so I can thank him at least twice, right?), and to Eric Peterson, who updated us as well.