The CEO's Accountability for Conversion Rates

  |  December 2, 2011   |  Comments

Do CEOs know exactly why their company isn't converting better?

Increasing sales conversion rates offers a greater ROI than what you can get from optimizing your traffic; either from paid or earned media. The math is simple - even if many never do the calculations. Companies with higher conversion rates almost always have better marketing efficiency ratios (net contribution/marketing expenses). The upside is that these companies make more money and that's a good thing. The downside is that it's hard work to accomplish better marketing efficiency ratios. These companies are led differently; they have higher levels of collaboration and higher standards of accountability.

The top performing companies consistently convert visitors to sales at rates in the double digits. They've been doing that for years, while the vast majority converts at low single-digit rates. The gap between the top performers and the middle of the pack continues to grow. I have two questions for their CEOs:

1a. If you sell online, do you convert at least 10 percent of your visitors to sales?

1b. If your online efforts are geared toward lead generation, do you convert at least 20 percent of your visitors to leads?

2. So do you know exactly why your company doesn't convert better?

It can't be that the company's already making so much money that it doesn't matter. It can't be that the company doesn't care enough about their potential customers to make sure they get exactly what they were looking for when they visit. It can't be that someone in the company is already "responsible" for conversions so you stopped worrying about it.

If, as CEO, you had a sales force that was underperforming the market leaders by a factor of 500-1000 percent, you couldn't just point to the VP of sales. As the CEO, you would also be accountable. Of course, this assumes that you have the equivalent of a VP of sales responsible for the marketing efficiency ratio. In my last column, "Leadership for the Marketing Optimization Team," I explained what kind of people companies need and what kind of backgrounds they should have.

What follows are the more likely reasons that companies underperform online. Perhaps the CEO still doesn't know what factors of the customer experience impact sales. Perhaps the CEO still doesn't know what projects or what departments to favor. Perhaps the CEO still simply doesn't know what truly needs to be done to optimize the marketing efficiency ratio.

I'm disappointed. I feel somewhat responsible after evangelizing about accountable marketing for more than a decade. I suspect if these companies' shareholders knew just how much money was being left on the table they would be too. Ignorance is not an excuse and in business it isn't bliss.

Nobody has been involved in e-business for two decades. There are too many not-quite experts, over-promising tool vendors, and self-proclaimed pundits demanding attention. It's the responsibility of executive management to create an expansive environment where learning in ongoing silos is less important than customers, and optimization isn't a project but rather a habit of great execution.

Stop paying attention to what your peers are doing (so-called best practices) and start benchmarking against your customers' expectations. Can you meet or exceed those expectations? Your conversion rate will be a leading indicator. Conversion rates are a measure of your ability to persuade visitors to take the action you want them to take. They're also a reflection of your effectiveness at satisfying customers, because for you to achieve your goals, visitors must first achieve theirs.

Columnists receive a lot of feedback. As a reader of this column, you're likely part of the choir I've been preaching to for years. I hope you enjoy the column and find it useful. If you agree or disagree with this column, then please direct your comments not only to me, but also to the CEO.

Tags:

ClickZ Live New York Want to learn more?
Attend ClickZ Live New York March 30 - April 1. With over 15 years' experience delivering industry-leading events, ClickZ Live brings together over 60 expert speakers to offer an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ABOUT THE AUTHOR

Bryan Eisenberg

Bryan Eisenberg is co-founder and chief marketing officer (CMO) of IdealSpot. He is co-author of the Wall Street Journal, Amazon, BusinessWeek, and New York Times best-selling books Call to Action, Waiting For Your Cat to Bark?, and Always Be Testing, and Buyer Legends. Bryan is a keynote speaker and has keynoted conferences globally such as Gultaggen, Shop.org, Direct Marketing Association, MarketingSherpa, Econsultancy, Webcom, the Canadian Marketing Association, and others for the past 10 years. Bryan was named a winner of the Marketing Edge's Rising Stars Awards, recognized by eConsultancy members as one of the top 10 User Experience Gurus, selected as one of the inaugural iMedia Top 25 Marketers, and has been recognized as most influential in PPC, Social Selling, OmniChannel Retail. Bryan serves as an advisory board member of several venture capital backed companies such as Sightly, UserTesting, Monetate, ChatID, Nomi, and BazaarVoice. He works with his co-author and brother Jeffrey Eisenberg. You can find them at BryanEisenberg.com.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Analytics newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

A Buyer's Guide to Affiliate Management Software

A Buyer's Guide to Affiliate Management Software
Manage your performance marketing with the right solution. Choose a platform that will mutually empower advertisers and media partners!

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

Jobs

    • Website Optimizer - SEO, CRO, Analytics
      Website Optimizer - SEO, CRO, Analytics (Marcel Digital) - ChicagoMarcel Digital, an award winning interactive marketing agency established in 2003...
    • Director of Marketing
      Director of Marketing (Patron Technology) - New YorkDirector of Marketing We are seeking a Director of Marketing to manage and build our marketing...
    • Senior Interactive Producer
      Senior Interactive Producer (Ready Set Rocket) - New YorkWhat You'll Do As a member of our team, the Senior Producer reports directly to our...