Many companies are failing to take basic steps which could help them improve their online conversion rates and boost business performance, according to new research from Econsultancy and RedEye.
Despite the recession, 70 per cent of client-side respondents said conversion rates had improved in the last 12 months. But the Conversion Report also found that a significant proportion of digital marketers (39 per cent) are dissatisfied with their conversion rates and only a quarter of responding companies say they are satisfied.
Many companies are neglecting to carry out regular tests on their website and are failing to segment their customers, both of which correlate strongly with improved performance, say the researchers. Those who have a structured approach to conversion, and at least one person directly responsible for this, are more likely to have improved conversion rates in the last 12 months.
Key survey from the research includes:
• Organisations whose online conversion performance had improved over the previous 12 months looked at twice the number of segments as those organisations whose online conversion rates have not improved. The main types of segmentation carried out are: demographic (39 per cent), geographic (36 per cent), and behavioural (33 per cent). Thirteen per cent of companies do not segment at all.
• Company respondents who said they were very satisfied with their conversion rates carried out more than four times as many tests per month on their web properties as those who were very dissatisfied with their conversion rates.
• Only 32 per cent of company respondents said that they were doing A/B testing even though 53 per cent said it was "highly valuable" and a further 42 per cent said they believed it was "quite valuable". A/B testing is the method which is most likely to be on the agenda, with 46 per cent of company respondents saying that they are planning to do this.
• Similarly, other methods including multivariate testing, user testing and cart abandonment analysis are widely regarded as valuable, but under-employed by responding organisations.
• Customer journey analysis (48 per cent) is the most widely used method for improving conversion rates, and 96 per cent of company respondents said they felt this was valuable. Yet only 14 per cent said they did it well.
• Looking at the impact of different types of technology, web analytics play the biggest role in improving conversion rates, with 80 per cent of respondents saying that this has a positive impact on conversion rates. Similarly, the majority of respondents say that their email platforms, paid search bid management tools, MVT systems and ratings & reviews technologies have a positive impact on conversion.
• The technologies which are most likely to have a negative impact on conversion rates are content management systems (24 per cent), on-site search (23 per cent) and e-commerce platforms (22 per cent). Supply-side respondents also flag up CMS and ecommerce as problem areas.
The research also identified the four practices most closely correlated with high levels of satisfaction with conversion rates. They are:
• Removing bottlenecks and blockages to conversion
• Identifying key performance indicators
• Aligning keywords, calls to action and landing pages
• Using compelling and effective calls to action
"Conversion rates are hindered by a lack of ownership," says Linus Gregoriadis, research director at Econsultancy. "If an organisation has someone directly responsible for conversion they are more than twice as likely to have experienced improved conversion rates in the last 12 months. Yet 40 per cent of client side companies said they didn't have anyone directly responsible for conversion."
"We find improving conversion by 10 per cent can be a lot cheaper than spending 10 per cent more with Google, but it is more complex, hence the need for this research," added Mark Patron, CEO of conversion specialists RedEye. "Based on UK online retail sales a 10 per cent improvement would be worth over £4 billion. Companies' lack of resources is cited in the report as the biggest barrier to improving conversion. This report shows how to prioritise that scarce resource to get the biggest bang for your buck."
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