Do you ever get overwhelmed by how fast things are changing with the world around you? How do you adapt your e-commerce business to an online environment that is rich with technology and shaped by consumer expectations – both of which are constantly changing? An award-winning trendspotter of two decades and CEO of Havas PR, Marian Salzman, provides her unique insights with a penetrating focus in 14 Forecasts for 2014. A number of the marco-level trends Salzman points out directly impact the success of an e-commerce business. But where do you start? When you’re unsure where to begin, start with the one place that 100 percent of consumers pass through to purchase goods and services from you – your checkout. In this first blog in a series of blog posts, I want to share with you some tips that will help your business reap the benefits of an optimized checkout experience.
Before jumping straight to dinner, let’s start with a little appetizer from a study Adobe conducted which will help give you a pulse on where others are in respect to optimizing their checkout performance. According to a Digital Marketing Optimization Survey conducted by Adobe in April 2013, most companies spend less than 5 percent of budget on conversion optimization. And, those 5 percent are reaping the benefits – a small uplift can translate into big revenue gains.
With slim investments in a formal optimization strategy it’s no wonder that more than a third of respondents reported a conversion rate of less than 1 percent, when the average lands between 2-3 percent. Below are four actionable tips that will help you measure success when you start optimizing your checkout.
- Implement analytics solution across your digital properties. Tag your corporate website, store and key acquisition pages with code from one of the handful of most commonly used analytics platforms. For example, Google Analytics is a free tool with good flexibility for cost conscious companies. After signing up for an analytics platform, all you need to do is take the snippet of code that’s provided and put it in the global footer throughout your digital properties. This will help you understand conversion performance, a key starting point. If you would like to get a read on revenue, it requires a couple additional snippets of code, nothing major so don’t be overwhelmed.
- Define your key performance indicators (KPIs). To start, you should meet with your leadership team to identify your commerce goals and how you want to measure success. Next, outline what primary and secondary tasks on your website support these goals. Now, define what data points you want to use to measure success. This will help ensure consistency when people are assessing performance across the organization. Note, some tasks won’t have revenue tied directly to completion. In these cases, it is nice to assign a value to each to help you measure and communicate performance. Once you’ve defined your KPIs, the last step is setting up reporting in your analytics tool. You now defined how you will measure and monitor success for each task aligned to the goals of your website.
- Measure performance of your checkout. Your next step is to determine your cart conversion rate – which means calculating drop-off rates as users are progressing through your checkout. When you’re optimizing your checkout experience, it’s critical to benchmark your conversation rate (recommend three months) and know where leakage points are in your funnel. Typically, you are best served with a bottom-up optimization approach. This will ensure you recognize revenues from incremental traffic you send through checkout from optimization efforts upstream. You now know where to target and have a baseline to measure success.
- Investigate how your competition is performing. Do some research to identify how your business is performing against similar companies in your industry or ask one of your marketing partners, like Digital River, to help you out. It’s nice to know at a macro level how leading companies in other industries are performing, but the more valuable perspective is companies in your vertical. Not only will it give you a viewpoint on how you are performing against them, it will provide you with ideas you can work into your optimization strategy. You now know how you benchmark against your competition and can leverage this when formulating your overall marketing strategy.
Setting the foundation for e-commerce is similar to learning the fundamentals for a sport or a craft – measure up and assess where you stand, hone in on your fundamentals, listen, learn, and continuously optimize to maximize performance.
The tips above will help you understand checkout performance – and ultimately determine if there are gaps between marketing conclusions you thought were obvious and how your customers actually respond to your site. Typically, you can expect a 50 percent win rate with testing so don’t be surprised when this happens. And, that’s one of the best things about taking a metric-driven testing approach: you can quantify how the change will impact your business in the future.
As a reminder, 100 percent of customers funnel through your checkout – a small improvement can have a significant revenue impact. Understanding the metrics behind your site and establishing benchmarks is cornerstone to understanding how your company measures up. Taking the guesswork out of the equation, you can be strategic and smart towards optimizing the performance of your site. Soon you’ll be one of the few who are reaping the benefits.
Question: How are you investing in conversion optimization?