This article written by Pavan Sudarshan, Co-founder at NudgeSpot, was published in issue 08 of the Social Technology Quarterly. Summary: Segmenting conversion rates enables e-commerce sites to track their most valuable visitors and can enhance the type of conversion that is most relevant and important to their businesses.

1. Divide and Rule:
Tactics to grow
conversion rates
Segmenting conversion rates enables
e-commerce sites to track their most
valuable visitors and can enhance the type
of conversion that is most relevant and
important to their businesses.
by Pavan Sudarshan
Photo Credit: Digg.com
Commerce

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neither representative nor actionable.
On this basis, seven conversion rates have been identified that
are a lot more granular. Each of these uncovers a specific problem
and allows you to come up with solutions.
Checkout Conversion
This conversion focuses on monitoring the “checkout initiated”
to “checkout completed” conversion.
Visitors who initiate the checkout process have most likely found
what they want to buy and have already made a decision to buy.
Losing a visitor who has initiated a checkout is the closest you
come to losing a real customer. It is necessary to understand what
influences abandoning a checkout. Typically visitors abandon
a checkout because of hidden shipping charges, fear of being
cheated in delivery, payment gateways that they do not trust, the
site is slow while talking to third party systems, etc. Assuring your
visitors along the way about payments, having secure modes and
channels and efficient shipping help alleviate this fear and get
them to convert.
Cart Recovery Conversion
This conversion focuses on how many abandoned carts were
recovered.
Adding an item to the cart is a form of expressing interest in a
product. If a visitor leaves the site with a cart and never returns,
or comes back but does not complete the checkout process, it
is important to try and recover the visitor’s cart. Offering better
prices and deals, availability, shipping charges and selection
range contribute to effective recovery of carts and decrease
the cart abandonment rate your site has been experiencing.
Reminding returning visitors about an existing cart or offering
people an incentive such as a coupon or free shipping to start their
checkout process can be very useful. For SDS Market in the US,
targeted promotion has been instrumental in recovering and in fact
preventing cart abandonments.
Brand Conversion
This conversion focuses on how many visitors who searched for
your brand resulted in buying from your site. Improving this rate
helps you reduce the cost to acquire customers.
Visitors who land on your page after searching for your brand
are valuable. They are the ones who are aware of your brand.
Once you have a steady stream of traffic it is important for you
to start establishing your brand identity. Improving credibility is
one way to retain these shoppers. It is for these sets of shopper
that you must take up brand building exercises in order to give
them a sense of being a great platform to buy from and where they
are highly unlikely to have a bad experience. A great design, an
MMost leading e-commerce stores generate a steady stream
of traffic from paid as well as organic sources. Search Engine
Optimization, content marketing, affiliates, online marketplaces
are few among the many tried and tested solutions to generate
traffic to one’s store. However, one problem that remains is the
number of visitors who end up buying is still very low. Conversion
rate, one of the most important Key Performance Indicators
(KPI) of e-commerce businesses, is too low. According to the
Internet Retailer, the overall conversion rate lingers depressingly
somewhere between 2 percent to 3 percent.
Given that conversion is vital to e-commerce sites, this article
explores the causes of low conversion rates, the possible factors
responsible, and what are the different ways in which conversion
rates can be improved.
An overall conversion rate implicitly treats all visitors identical,
i.e. each visitor has the same likelihood of buying from your store
on every visit. Even common sense suggests that this is most
likely not true. Most people do not buy something the first time
they see it.
Alex Brown, who has been teaching internet marketing since
1997, talks about six phases in the buying cycle: problem
recognition, information search, evaluation of alternatives,
purchase decision, purchase and post-purchase evaluation.
These phases are indicative of the fact that visitors are on
your site for different reasons. Each time they visit, they may be
in a different phase of buying. By not catering to these visitors’
needs and only optimizing the selling phase affects conversions.
Along the different buying phases several measures and steps to
engage visitors ensure conversion.
Overall conversion rate is an aggregate data point. It is a single
number that represents all the visitors and customers on your
store. Web analytics expert, Avinash Kaushik, elaborates on the
problems with aggregate data, what to avoid in KPIs and the need
for segmenting. He opines that measuring conversion rate without
a goal is not very effective. For example, if a store’s current
conversion rate is 1.5 percent and is aiming to double it and
make it 3 percent. The number alone does not indicate anything.
1.5 percent can be great or pathetic. Increasing it to 3 percent
can be a piece of cake or a walk in the desert. There is just no
way to tell without understanding a lot of other things, such as
merchandize issues, offers, lengthy process, shipping costs, etc.
Improving conversion rates thus begins by identifying a specific
problem and fixing a goal you want to reach. It is segments of
data that need to be monitored in terms of the different problems
faced and the different sets of actions required for each one.
Approaching an overall conversion rate improvement without
understanding important details is definitely not actionable. It is
the most important metric that every serious store monitors, but is

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easy and noteworthy experience on the site and being consumer-
friendly are factors that influence buying. By keeping a track of
sources through which you receive the highest amount of traffic
will help you determine what your next step should be.
Organic Conversion
This conversion focuses on how many visitors who arrive on you
site from organic sources convert to consumers.
Organic traffic is great. It is the indicator that show that your
attempts at SEO, brand building, content marketing, referrals and
social media are all working for you. Catering to this traffic helps
reinforce the brand and spread the word about your store. While
organic visitors should be treated like any other new visitor on
your store, they are important in spreading word about your store.
Exalt them with a great service, on-time delivery and handling their
returns well. Leverage social media effectively to get these visitors
to talk about you and in turn increase your organic traffic. Data
analytic tools are the most effective method to acquire the data you
need in order to estimate the sources of organic traffic on your site.
This helps to determine how to evolve your site and focus on the
sources that brought you highest amount of traffic.
New Visitor Conversion
This conversion focuses on how many new visitors buy on your
site. Improving this helps determine how relevant the landing
pages are and how good the traffic sources are in providing
qualified leads.
Photo Credits
Top: JohanL
Bottom: Seattle’s Big Blog

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New visitors represent new opportunities. These visitors may not
know what your store has to offer, but figuring out what you want
to show based on the channel, keyword, source and campaign
may result in converting your first time visitors into customers.
Relevance is the key to improve new visitor conversion. Landing
page optimization, A/B testing and content are the tools to grab
attention of new visitors. An extra layer of personalization can
come in the form of good product suggestions and ads. For
example, IndianStage shows ads for plays that are running in
theaters in the city that a visitor is landing from. Not only has this
made their site more relevant, their visitors now do not have to do
an extra step of searching for plays from their cities. It is a simple
step, but very effective.
Repeat Customer Conversion
This conversion focuses on figuring out how many returning
customers purchase again from the site.
The goal is to increase the lifetime value of a customer and for
any serious e-commerce business this remains a primary goal.
To increase lifetime value one needs to understand that it is not
about conversion alone on the first purchase, but getting repeat
orders from a customer. To do that, you need to meaningfully
engage with them. Instead of sending a lot of emails to engage
with the customer, sending what could be useful information
will help nurture your customers. Email campaigns reminding
customers about accessories for a product they bought, such as
batteries or lenses after a camera purchase, suggesting a pair of
red earrings to go with that red dress a customer bought recently,
understanding the age of a baby based on the size of the diaper
purchases and then doing age-based email campaigns - there are
many ways to engage with returning customers and giving them
relevant information. To identify who is a returning customer you
need to use tools that analyze profiles at granular levels, such
as KissMetrics, MixPanel and NudgeSpot rather than aggregate
analytics tools.
Unique Visitor to Customer Conversion
This conversion focuses on figuring out how many unique
visitors become customers.
Visitors may visit your store multiple times before buying
something. Instead of focusing on visits, determining how many
unique visitors buy is useful in understanding the quality of your
traffic sources.
One problem with focusing on granular, micro conversions is that
you may lose sight of why you are doing any of this. It is still
important to understand what your overall conversion rates are
and compare them to previous rates. Using focused conversion
does not mean you throw away overall conversion rate. Instead,
you should use these granular conversions as an implementation
detail to improving your overall conversion. This means that if you
want to go from an overall conversion of 1.5 percent to 3 percent,
you use these other conversion rates so that you can pinpoint
where you are not performing well and start improving.
References
Kaushik,Avinash.“Web Analytics Segmentation: Do Or Die,There Is No
Try!” Occam’s Razor.18 May 2010.
Demery,Paul.“Retailers plan to spend more on text ads this year.” Internet
Retailer.12 May 2011.
Rueter,Thad.“A conversion boost for online retailers.” Internet Retailer.13
Sep 2011.
Brown,Alex.“Stages of the Consumer Buying Process.” udel.edu.
Redbord,Michael.“How to Leverage the 5 Stages of the Customer Buying
Cycle for More Sales.”HubSpot.HubSpot,Inc.,06 Jul 2011.