What Does Conversion Rate Really Measure?

Prospects who come to your site may not be ready to buy now. They may be searching for the right place to buy from. They might return in a short while. When they’re ready, they’ll buy. When you don’t appropriately track those visitors, it may mean you’ve converted customers your metrics consider lost.

You can influence prospects’ need to buy from you by understanding their behavior. These behaviors can be traced to patterns or groups of patterns all customers perceive as their “experience.” Understanding the experience is used to predict customer behavior and is key to developing actionable Web metrics. If you predict customer behavior using metrics, you can anticipate their next move — and beat them to it.

Brick-and-Mortar Case Study

Look at the nearly defunct Kmart. It doesn’t correctly anticipate customer needs. It buys a new style of shirt and stocks it in pink, yellow, green, and blue. Blue sells out immediately. The merchant’s left with inventory of three other colors. Kmart doesn’t reorder the blue ones as 75 percent of its inventory remains unsold. It’s still got plenty of that style shirt to sell!

Wal-Mart, on the other hand, would order a new shipment of blue shirts. Its model takes the customer into account, not the inventory. The merchant understands it’s the color customers want, not the style (in this case, anyway).

Wal-Mart currently implements RFID to better understand what customers want from it. It’s successful because it tracks, analyzes, and reacts to what customers want.

Listen, They’re Talking to You

Customers tell you something each time they take an action on your Web site. If you don’t develop expectations of what actions visitors should take, you can’t optimize your site properly. Develop persuasion scenarios that allow you to pinpoint and optimize based on your assumptions. If visitors aren’t doing what you thought they would, find out why. Analyze where the pitfalls are, then develop new scenarios.

Expected a Toshiba, Bought the Sony Instead

Unlike manufacturing or retail, the Web doesn’t have tangible deficiencies or expectations. You must develop hypothetical borders or limits to test within. Creating scenarios helps our clients see where they misunderstood the needs and motivations of site visitors.

As far as we know, it’s the only way they can judge what actions visitors really want to take and enable these in a Six Sigma process. Most Web sites ignore their analytics and simply hope visitors will buy. The leaders in the field extract actionable analytics from inferred intent, not from comparing visitor behavior to persuasion scenarios.

Use analytics to tell you what your customers are looking for. Did they get what they where after? Most understand the macro level (buy the product/service) but don’t see the minutiae.

Web Analytics Measure Behavior

Conversion starts with a single click, even before a visitor lands on your Web site. If she gets what she wants, she’ll click again. With each click, she’s more convinced you have what she wants. Implement the conversation she expects, and she’ll be delighted. She wants to buy from you. All she needs is confidence.

Jim Novo explains:

The customer raises [their] hand, the marketer Reacts. The customer provides Feedback through Action — perhaps they cancel service, or perhaps they add service. The marketer reacts to this Action, perhaps with a win-back campaign, or with a thank you note. It’s a constant (and mostly non-verbal) conversation, an ongoing relationship with the customer which requires interaction to sustain. It is not a relationship in the “buddy-buddy” sense. Customers don’t want to be friends with a company, they want the company to be responsive to their needs — even if they never come out and state them openly to the company.

Your responsibility to visitors is to figure out what they will ask and where they’ll ask it. Then, track the correct data. Use it to optimize your site based on what visitors want.

Be Proactive to Boost ROI

When you encourage a customer to buy something, you want specific behaviors to occur. You can never change customer behavior, but you can predict and accelerate it. That’s where you can increase your return on investment (ROI).

When you can predict a visitor’s likelihood to take specific actions and accurately encourage specific behaviors, you can reverse drop-off before it happens. All you need to do is develop persuasion scenarios, develop models for predicting consumer behavior, and focus on increasing conversion.

Meet Bryan at Search Engine Strategies in New York, March 1-4.