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Conversion Rates Misunderstood

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3 minute read

Conversion RateThis is a guest post courtesy of Invesp Consulting. Ayat Shukairy is a managing partner at Invesp Consulting, an online marketing and conversion optimization company. To read more of her posts, visit www.invesp.com/blog.

Everybody these days is talking about conversion and its significance. But how much of this conversion talk is half-truths, and how much of it is relevant and useful information? The fact of the matter is looking at your conversion rate without deciphering the information is not very meaningful. Conversion must be segmented and assessed from each segment’s perspective rather than lumped into one big number.

Marketers usually talk about conversion as a whole; they don’t talk about these segments because that’s not “elegant” marketing talk. But analyzing your segmented conversion data can make a big difference.

Avinash Kaushik, the analytics guru, refers to this in his book . He sheds light on how when you start worrying about low conversion rates you’re simply obsessing over visitors who will never convert. This in turn may lead you to lose perspective because although you ultimately want to increase your conversion, you must consider all channels of traffic and which channels in particular have the lowest conversion rates.

Your traffic is more complex than you think. To maximize results start considering everything from search engine organic traffic to PPC and ad campaigns that you are running. If your conversion rate is at 1.1%, instead of fixating on it, start considering conversion rate based on the channel you are using to drive traffic.

Let’s say you are running several campaigns to drive traffic to a landing page on your site. These campaigns may include PPC, email marketing, and organic traffic campaigns. Segmenting your visitor information based on the source would help you understand which sources of traffic are working better compared to the rest.

But even in this case, looking at the conversion rate alone can be misleading. The more meaningful analysis will be to first assess which source is generating more profit compared to the rest. Once you’ve analyzed that, then you can dig a little deeper into your sources of traffic (channels) and begin analyzing the campaigns with the lowest conversion rates. The sources that bring you the highest rates of profit, but lowest conversion rates are the best channels to work with. Let’s say that the source that is bringing you the greatest profits, but lowest conversion rates is your paid Google ad words campaign. Begin asking yourself questions such as:

1. Am I using relevant keywords for that particular campaign?
2. Is the content of my ad relevant to the user of that particular channel?
3. Who are the majority of users that come to my site via this campaign?
4. Is the landing page weak and unfocused for that particular channel’s audience?
5. Are visitors from that channel coming for the reasons I think they are coming for?

Once you’ve determined the reason for the low conversion rates, you can begin to address the problem by eliminating it to maximize results.

Below I have an example of sample data that can put this into some perspective:

Source of traffic sorted by Conversion%

Conversion Table

Notice how for this particular campaign, Google Adwords had the highest conversion rate, yet the profit generated was lower because keywords were more expensive in Google compared to Yahoo. The other interesting channel was Christianet.com. Although, conversion rate is the lowest for this campaign, the cost of traffic was the cheapest. That made this particular campaign more profitable compared to traffic coming from other sources.

After this initial analysis, the client had two options: either stop throwing money at a poor converting cause with low profit margins, or figure out what is stopping the buyers from these channels to convert. What FUDs (fears, uncertainties, and doubts) are they experiencing? We advise our clients to maximize their ROI, and in this case, optimizing for the source that is generating profit but has low conversion rates is the solution that will give them the best results.

It’s always important to be careful when you begin to compare yourself to the average conversion rates. We all do it, but it’s a point where too many companies get stuck on. Start looking at your conversion rate from a different perspective; not as a single number/percentage, but as segments. Analyze your data and start seeing and using that information a whole lot differently.

Linda Bustos
Linda Bustoshttp://www.getelastic.com
Linda is an ecommerce industry analyst and consultant specializing in conversion optimization and digital transformation.
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