The Value of Competitive Data
Comparing your conversion rates with your competitors' can be a tricky business... and may be the wrong thing to focus on.
My last column focused on accessing and using competitive data to gain insight into specific problems to improve site performance. One of the big questions that often comes up is, “How does our conversion rate compare to others? Are we doing better than average or worse?”
There are a few challenges with that question:
- Where do you get general conversion or performance numbers for comparison? I mentioned comScore, Hitwise, and Nielsen last time. Another good source can be the larger research firms, such as JupiterResearch and Forrester.
- Even in the same industry, different businesses can have very different customer demographics, site goals, or emphasis on how to convert people. Hence, their conversion rates may differ greatly and aren’t a true apples-to-apples comparison.
- How do you ensure the way you measure conversion is consistent with the way others measure it? Talking to a group of people at a conference about shopping cart conversion, you may be surprised at the different percentages people discuss. The problem is they define that conversion differently:
- Person one considers shopping cart conversion to be the number of orders from the site divided by the number of site visits.
- Person two considers conversion to be the number of orders divided by the number of site visits, excluding job seeker visits, order status visits, investor relations visits, and current customer support visits.
- Person three thinks of it as the number of orders divided by the number of people who added a product to the cart.
- Person four manages a site with products that typically require greater consideration, potentially cost thousands of dollars, and aren’t typically purchased on the first visit, such as a diamond ring or computer. This person looks at shopping cart conversions over a number of visits rather than a single-visit metric.
Let’s focus on the third problem: ensuring you compare apples to apples. Is it helpful to know your book site converts 3.2 percent of site visits and a computer reseller converts 2.3 percent? Probably not. Even within the same industry when comparing comScore data, which allows an apples-to-apples conversion rate comparison, numbers will differ greatly based on business goals, demographics, and so forth. These are things that can’t just be credited to a better site or more targeted traffic drivers or ad campaigns.
Improve Your Conversion Numbers
Rather than focus on how your overall conversion rates compare to everyone else’s, focus on improving your site’s conversion. At my company, when we start analytics and optimization engagements, we always get questions about how the clients’ conversion rates compare to their competitors’. We work with clients to get a good overall view, and we have some standards we use as well. But we mainly use competitive data to compare conversion of specific pages or portions of a process to identify best-of-class sections or sites, often down to the page level.
We have yet to start an engagement where optimization hasn’t previously been a focus and there’s no room to improve the overall conversion rate. Even if they have the best overall conversion rate compared to their competitors through comScore, clients are still able to improve conversion and revenues/leads by focusing on optimization.
Competitive data can be invaluable, just don’t fall into the trap of how you compare to others. Use it instead to leverage best-of-class site sections within and outside of your industry; solve site problems with the biggest potential for return on investment. Focus on improving your conversion rate, not just comparing it.
Want to Help Set Standards?
Guy Creese and I co-chair the Web Analytics Association’s Standards Committee. If you’re interested in helping us shape and define Web analytics standards, shoot me an email, and I’ll let you know when we next meet.
