Every ecommerce brand wants sales — as many as possible and as quickly as possible. To that end, all focus is on the conversion rate, or the number of sales divided by the number of website visitors. Success in ecommerce means doing whatever it takes to keep bumping that number higher, right?
Not exactly, say Something Digital’s Megan Deleonardis, Vice President of Programs and Phillip Jackson, Chief Commerce Officer. Conversion rate optimization (CRO) is a bit more complicated than that, and for good reason. The two of them jumped on a Zoom meeting, with me, Brittany Wheeler, to talk about Something Digital’s unique take on CRO.
BW: What does CRO mean today, in 2020, for today’s merchants? And what are its opportunities for ecommerce merchants?
PJ: The short answer is it’s a practice by which merchants, or their consultants, examine every aspect of an ecommerce business to assess how well a brand is meeting the needs of its customers, and then applying that insight to improve the customer relationship. A stronger, more responsive relationship is the best way to generate more sales.
MD: That’s right. A brand’s conversion rate is dependent on getting a lot of factors that affect the customer experience right — page design, site design, traffic quality, end-to-end purchase funnel, overall ecommerce strategy, and above all else, understanding what your customer wants from your brand. Unless a site has 100% conversion, meaning each and every site visitor converts, we need to test, measure and optimize all aspects of a business on a continuous basis.
PJ: Let’s dig deeper into that. When Something Digital talks to our clients about best practices, we present the purchase funnel as a process governed by three factors: the traffic you drive to your website, the basket size or average order value (AOV), and conversion rate.
But those factors are broad. Traffic can be broken down into new visitors versus returning customers, active versus dormant customers, customers who find your website organically or arrive as the result of a campaign. AOV can be segmented by first purchase versus replenishing or returning customers, and so on.
MD: That’s exactly why we treat conversion rate optimization as a practice unto itself, one that spans the digital strategy team, the creative team and the engagement team.
PJ: Which is a practice you lead. Why don’t you explain your role in Something Digital?
MD: I have a few avenues to focus on. One of my key responsibilities is to help Something Digital build out and change our messaging towards CRO. CRO requires more than technical partners and technical developers. It’s about strategy, and using data to help our clients make better business decisions.
To help our clients make better decisions, we pull all of the SD teams together to look at data and see what it means from all of our perspectives. We analyze what’s working and what’s not and, as a group, hypothesize the best way to tackle a challenge. We then run tests and validate the results. This is how we optimize the customer experience so that clients see revenue growth year over year.
PJ: The word optimize is a key here because one can inadvertently harm other ecommerce factors since everything is all finely tuned and balanced with each other. For instance, if you try to get a visitor to convert too quickly it can have a negative impact on AOV. Or if you over-emphasize AOV with incentives, you can disrupt the customer’s normal flow of purchase and extend the purchasing cycle. In a worst case scenario, you can prompt a customer to load on up with, say, a six-month supply of supplements, which will deliver a boost in AOV, but it will also mean they won’t have a reason to come back to your site for those six months.
MD: And a lot can happen in those six months.
PJ: It sure can. You might introduce new products or extend a product category which they might not see. Or your customers may reconsider your brand and look at others. Good relationship management means ensuring your customers want to return to your site regularly, and when they do, discover new products.
MD: This is precisely why we’re working so hard to elevate the concept of conversion rate optimization with our clients. It’s more than just a metric, it’s more than just a rate of sales. It’s a mindset.
PJ: I agree. CRO is about finding the right balance. Here’s something we’ve learned in the process about conversion rates: not all people will convert on their first visit, and that’s okay. Sometimes it’s even preferable, especially if we’re prompting visitors to make a highly considered purchase. In those cases we need to tell multiple aspects of the product or the brand story, and it just doesn’t make sense to push for an immediate conversion because it is likely to backfire. These are the things we think long and hard about.
MD: And it’s why successful CRO initiatives must touch every person within Something Digital. Our designers are always looking at what’s working on a page, and how design can improve the customer journey. Our digital strategists are always looking at the funnel to see where a brand loses prospects, and why, and how we can fix it. And the strategic engagement managers, on an annual basis, build roadmaps to help clients meet their revenue goals. And we look holistically at the ecommerce funnel to ask things like: Do we need to drive more traffic? Increase AOV? Is the conversion rate where we want it to be, or is it below average? Should we focus more on mobile?
Of course, these conversations have always been happening, but now we’ve pulled it all together into the CRO practice so we can remessage the conversation.
PJ: That’s smart, in my opinion, because at the end of the day, CRO is all about insights, as I’ve said earlier. Success in CRO isn’t only about getting more purchases, success is finding what works and what doesn’t and using that insight to build a better relationship with the customer.
We have a pyramid we use when we talk about CRO with customers. At the top of the pyramid is vision, just below that is goals, followed by strategies and tactics. The point is, if you don’t have a goal then your strategies may not align with your vision. CRO is a strategy, but the end goal isn’t more sales, it’s greater insights into your customers and how they think. This is the ultimate goal, in my opinion. The better the relationship, the more your customers will provide unsolicited feedback to your business. That leads to them feeling a greater ownership of that relationship, which leads to long term loyalty and greater lifetime value.
BW: So it sounds as if our approach to CRO is different from other agencies. Do we charge for that service in the same way as other agencies do?
PJ: Nope, not at all. A lot of agencies take a percentage of the client’s ad spend, some take a percentage of net new orders or a percentage of lift. We include CRO in our retainer hours so that we’re not incentivized to earn more by getting our clients to spend more. We’re incentivized to find the right things that work for our clients, and to find the insights to enhance their businesses, and not simply to execute a Google Adwords or social media playbook.
BW: Need more information about Something Digital’s CRO service, or to speak to someone how to apply it to your business? Click here to get started.