Analytics Question
This post was made Jan 20, 2010 by Carlos del Rio
Good analysis has a goal. This week I am considering what the formula for conversion is. I figure you have three parts to a successful action:
- What you offer – your unique selling position.
- Who you offer it to – organic search, advertising, e-mail etc.
- How you describe the offering – the language you use and your action path.
Question: What’s more important to conversion: product set, traffic source or navigation?
Would it not be important to consider the stage of the buying cycle the customer is in? Or are you making the assumption that the stage is I need or want it now?
I’m very curious to see what conclusions you make from your insights.
I do think that the buying cycle is a factor for individuals. But, if pressed I would probably say that “Who” is most important.
Speaking to the correct person can overcome failings in the other two.
So, I think that the source of your traffic should be considered highly when making conversion decisions. I would be more likely to change the messaging to meet the traffic source, rather than trying to change the traffic source.
In response to Zachary: you cannot control your customers buying cycle as much as you can control your product set and navigation, and for the most part your traffic source. So we’re focusing on what you can control for your conversion.
If you are in a competitive market you probably you probably don’t really have as unique a product set as you think and while you can try to vary your price (aka drop it) this is not the way you really want to sell and not the expectation that you want to set for your customers. That said, if you offer competitive pricing you should be in the running for the conversion. However, you must differentiate yourself to get the sale.
Navigation (UI) and traffic sources are probably a close 1-2 and I think it’s debatable which is the most important. If you don’t have a good UI, your traffic source will be negligible. If you can’t feasibly buy something, you won’t convert. You can tailor your UI or your messaging to meet your traffic source, aka different experience for your paid vs. unpaid traffic or new vs repeat traffic.
You can also hedge your traffic sources to control your conversion. If you find that a particular ad maybe generates a lot of traffic but converts well below your site average, maybe that’s not the best source of traffic for you and your attention should be focused on an email campaign to your best customers who convert well above your site average.
@jeff — So, are you arguing that traffic source should be your major concern of these three factors?
No, I would say that UI/UX is the biggest concern. Again, it doesn’t matter where I come from if I cannot buy it, or if I don’t understand how to buy it. I agree with you that you must know your customer, and thus it’s easier to make design changes based off what your data from your customer is telling you. To Zach’s and your point, you can’t know what the customer is going to do and you can’t depend on the traffic source to make your sale. However if you give her a clear path to sale, your conversion rate is much more likely.