In the past two articles I’ve discussed how to create a home page that effectively engages your visitors and helps them move along the path to a purchase. The obvious question now is, “How can I tell if my home page is effective?”
Watching Your Web Trends
I recently spoke with a client who was concerned with the low closing rate of the company Web site — well under one percent. However, these folks spend no money to drive visitors to the Web site; visitors come to the site from the marketing overflow of the company’s other distribution channels. Yet the client was doing several million dollars’ worth of sales in high-ticket, high-margin consumer goods. With such a poor closing ratio, obviously there’s lots of room for improvement. But don’t feel bad for them. They’re doing all right, and now we’re helping them do even better.
To get a snapshot of what was going on with their online business, I asked them to run some Web site reports based on their server logs, even before I spent any time looking at their Web site. Those logs — and yours, along with some of your other management reports — contain a gold mine of information, if you know how to look for and analyze the right data relationships.
Getting Hits, Making It to First Base
The simplest measure of the effectiveness of your home page is what is called site penetration ratio (SPR). It comes as a surprise to many e-commerce Web site owners that most visitors to most Web sites never get past the home page. You spend lots of marketing dollars driving traffic to your Web site, yet visitors leave immediately. In fact most may leave even before the page is done downloading.
Monitoring your SPR is essential to understanding the effectiveness of your home page. To calculate your SPR, all you need to do is divide the number of unique visitors who click to any interior page by the total number of unique “hits” to your home page.
What we found when we looked at the client’s numbers was that almost 40 percent of visitors never got past the home page. Here’s a little clue: The client’s got a big home page problem!
Paco Underhill, a leading expert in consumer shopping behavior, has a wonderful quote I like to use: “Conversion rate is to retail what batting average is to baseball.” Shop.org reports that the average order conversion rate for its members (many of the very top e-tailers) is 1.8 percent. Imagine, fewer than 2 people out of every 100 who visit Shop.org’s Web sites actually make a purchase.
Ted Williams (I wish him a speedy recovery) became a legend for hitting above .400. That’s over 40 hits for every 100 times at bat. And that’s the type of number you would see in an effective brick-and-mortar store (about 48 percent, according to Underhill). Hmmm, imagine that…
A closing rate of less than 2 percent is akin to that of the direct response business — you know, the seller pushes out solicitation letters, postcards, or catalogs, then hopes you buy on your own initiative. So here’s a question for you: Are you pushing your Web site on people, or are they seeking it out? Is your Web site nothing more than a direct response vehicle, or is it an interactive sales machine?
CCR — customer conversion rate — is the ratio of Web site orders to Web site visits (you may also see this referred to as the sales closing rate or sales closing ratio). This is the most important number affecting your bottom line. If you could find a way to increase your closing rate from 2 percent to just 4 percent (and some of our clients reach CCRs of 5-10 percent), you will have doubled your sales without having spent an extra penny on marketing.
What’s scary is that if the average is under 2 percent, just imagine how bad some of the Web sites out there are doing. And don’t get fooled if you have a high CCR. If you’re getting very highly targeted traffic or your competition is negligible, your CCR could be much, much higher than 2 percent yet still be just a tiny fraction of what you could be — no, should be — getting if your site were designed right.
Crossing Home Plate
Many e-tailers really take this baseball analogy to heart. However, when you take a close look at their Web sites, you realize they’re confused. They have mixed up the teams in their heads.
What do I mean by that? The way their sites are designed suggests that they see themselves as the home team and their prospects as the “visitors.” As a merchant, you want to make sure that your visitors feel like a part of your team (that’s a whole other article), that the only thing you want to do is help them score.
Score what? Score whatever they came to your Web site to find. In other words, make it really simple for them to get to your Web site, find what they want, give you cash, and leave. Now that’s a home run for all involved.
A simple measure that lets you know if you are helping your new teammates score is clicks to buy (CTB). CTB measures the average number of clicks it takes your visitors to go from your home page to the completion of their purchase.
Obviously, the fewer clicks the better. Why do you think Amazon.com fights so hard to protect its 1-Click Checkout patent? It realizes that one of the main causes of incomplete purchases and abandoned shopping carts is the long and tedious checkout process many e-tailers inflict on potential customers. This is a tricky procedure, though. Don’t push too hard, because it’s all about balance.
Want to know how well you are doing? Find five people who aren’t familiar with your Web site (maybe even your Mom or Dad should be one of them), and ask them to buy something from you. Remember those commercials of yesteryear, “How many licks does it take to get to the Tootsie Roll center of a Tootsie Pop”? Well, too many clicks may account for lots of lost sales, so be sure to figure out your CTB.
…And Keep on Scoring
Those are just a few of the ways you can keep an accurate score of what is really going on in your online business.
You can get a complete suite of calculators, including the ones mentioned above, at Digital Sales Evaluator. They’re in the form of an Excel spreadsheet that’s easy to use and adapt to your own business.
Have fun proving to yourself how, as a coach with a new game plan, you can help customers score more runs, while you score big all the way to the bank.
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