Step by step process: how to conduct conversion optimization

How to conduct conversion optimization

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Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

June 25, 2018

The goal of conversion optimization is to make websites more accessible, trustworthy, and relevant to users. To achieve this goal, we analyze every aspect of the site’s performance.

The process consists of several steps:

  • Measuring & Research: This initial step forms a foundation for understanding the website’s current performance
  • Reporting: Before the optimization process can begin, you need to establish reporting standards and a baseline for improvement
  • Analysis: The measurements and other research need to be analyzed to understand existing issues and devise solutions
  • Testing: Testing shows which solutions work (i.e. result in improvements), and which don’t
  • Implementation & Refinement: Once the first round of testing is done, it’s time to implement the results, refine them, and continue to further improve the website

Though it might seem straightforward, there’s more here than meets the eye.

Measuring a site’s performance of the website doesn’t mean just counting the number of people who visit it and/or buy from it. True measurement means systematically, deliberately tracking every aspect of visitors’ activity on the website, from arrival to their exit, regardless of whether they convert or not.

The idea is to identify your visitors’ patterns of behavior. You’re looking to find out what makes them more likely to convert, how converting visitors (AKA customers) arrive at the website, and how they interact with it. Accurate measurement enables you not only to identify patterns, but to find out which parts of your website aren’t functioning optimally.

Set yourself up for meaningful measurement

The optimizer’s initial task is to measure the website’s current performance. This involves defining the site’s purpose, the owner’s expectations, the target audience, etc. This preliminary effort will make both defining goals and measuring improvements possible.

Before doing any measurement, you need to verify if that your measurement tools are configured properly. Proper configuration and setup is necessary to make measurements accurate and timely. Don’t skip auditing your existing setup, even if everything seems to be in order.

Without accurate initial measurement, no conversion optimization can take place. If you don’t know whether you’re actually improving a site’s performance, then what’s the point?

Measuring is comprised of several steps:

  1. Creating your measurement plan
  2. Choosing tools and instrumentation
  3. Reporting on gathered data

1. Creating your measurement plan

To conduct valid measurement, the first thing you need to do is to establish a plan for that measurement. To be able to measure, you need to know what you want to measure and what constitutes a positive outcome.

A measurement plan starts with high-level indicators known as “objectives”. Management should establish guidelines and set clear objectives against which you can judge the performance of your entire business.

Once you identify the overall objective(s), go a level down and identify goals. The goal should inform the operational aspects of achieving the overall objective. For example, if your objective is to make more sales, one of your goals may be to increase your store’s conversion rate.

Each goal informs your tactical planning and provides you with an idea of what actions you’ll need to take to reach the goal. For the previous example, you’d track and measure your conversion rate. Conversion rate represents a key performance indicator (KPI) of the goal of increasing conversion rate.

KPIs should be easily measurable within a timely period, so you don’t have to wait for an extended period of time to see if the tactic(s) you selected to reach our goal are working. This means that KPIs should be SMART:

  • Specific
  • Measurable
  • Attributable
  • Relevant
  • Timely

Here’s an example of a SMART measurement plan:

A well-conceived measurement plan.
A well-conceived measurement plan.

Once you have a measurement plan in place, then you can start measuring.

2. Measuring

Actually measuring your website’s performance starts with implementing your measurement plan so you can track all the data. Your measurement plan indicates what data points you need to assess the performance of your business accurately.

Next, your task is to set up the mechanics of gathering data and making it available for analysis.

Consider your website as a sequence of interaction. You need to be able to observe patterns of visitor behavior, so you can understand what drives your customers to convert. To facilitate this understanding, most measuring tools (Google Analytics, KISSmetrics, and others) allow you to define your own events, interaction touchpoints, and goals. You can also define segments — groups of customers that share similar characteristics.

If you set up a measurement plan and start just gathering every random piece of data, you’ll quickly find yourself in a situation where you can’t make sense of all the data you have. To prevent this, make sure you collect only the data you need.

For example, if you operate an ecommerce site and most of your customers buy your products without ever downloading a PDF about your company, then explicitly tracking and reporting the number of times this document is downloaded is simply not important.

If, on the other hand, many of your buyers viewed a video of the product prior to buying it, it stands to reason that you’d want to track the number of times that video was viewed, what visitor segment(s) are more affected by the video, what acquisition channel brought the visitors who viewed the video, etc.

Using measurement, you can establish targets and measure your KPIs against those targets. In effect, measurement just means providing accurate and timely data to show how your site is conforming to the overall plan.

Since it’s easy to get overwhelmed by the literal mountain of data-tracking tools available, you need to stick to your measurement plan. You’ll avoid wasting time and effort tracking irrelevant data, and ensure you notice the insights offered by relevant data.

3. Reporting

Once you’ve set up your chosen tool(s), you need to decide what forms of reporting you’ll use. Most tools contain some form of visualization by default. But you’ll usually need to customize the reports and include specific metrics and information for various websites — there’s no “one size fits all” report.

By using other tools, even simple sheets, you can define your own reporting layout and standardize it throughout your organization. While this solution requires some initial effort, it will give you the best results.

You can also use business intelligence tools like Google Data Studio or Tableau. It’s easy to integrate many different data sources in those tools, making visualizations quick and easy.

The main point here is to make a choice and stick to the method you choose. Visualization can be a great help, saving you a lot of time in the analytical process.

Before you begin using analytical data from your tool, ensure that it’s configured properly — otherwise your data will be worthless.

Data at a glimpse is a key feature of most analytical tools
Data at a glimpse is a key feature of most analytical tools

Analyze your measurements & conduct other research

The research phase includes the initial data collection and establishment of your website’s baseline performance. This is where we find out what issues are limiting the performance of a website, and how exactly they’re limiting it.

To properly conduct any conversion optimization process, you need to conduct thorough research and analyze every available data point — since only when you identify a problem can you attempt to solve it! Analysis is the process of deliberately, methodically examining your existing data to derive insights.

CRO 4 steps process
CRO 4 steps process

Generally, the research and analysis process can be thought of in four parts:

  1. Heuristic analysis
  2. Quantitative analysis
  3. Qualitative analysis
  4. Technical analysis

These fields of research touch on every aspect of your ecommerce website.

First, conduct heuristic analysis

Heuristic analysis can uncover a diverse set of issues, from issues in the design of the website, user interface and finally content.

The primary aim of heuristic analysis is to ensure your website provides:

  • A user-friendly interface
  • Clear and relevant content
  • A logical process or flow

One of the most famous tools of heuristics is a “five-second test”. The concept is that you should be able to judge the purpose of any website within the first five seconds of viewing it. Ideally, you should apply this test to your website by finding a random person who’s not familiar with your website, and ask them if they “get” what your site is about.

If they can’t tell within five seconds, that’s a sign that you should make changes until your site’s value and function is clear.

The five-second test is based on common principles that govern human-machine interaction. Some of the most famous and frequently used principles are 10 heuristics devised by Jakob Nielsen of the Nielsen-Norman Group.

Nielsen’s 10 usability principles, as applied to websites:

  • Ability to keep track of the process or flow by visitor
  • Clarity and relevance
  • Freedom and control (visitor’s ability to maintain the control of the process, and freedom to pursue their own objectives)
  • Consistency of the site’s message
  • Prevention of errors through anticipating most common errors and reducing the possibility of that visitor action can trigger errors
  • Recognition means creating a UX that helps customers instantly, intuitively recognize how to operate your website, instead of having to remember how
  • Flexibility and efficiency that allows visitors to use shortcuts and time-saving measures
  • Attractive aesthetics
  • Testing error messages for clarity and relevance in order to help users diagnose and recover from errors
  • Available documentation and help services

Overall, you’re making sure that visitors to your website can navigate your site quickly and effortlessly to accomplish their goals.

On all ecommerce websites, the visitor’s primary aim and the owner’s primary aim largely coincide. The owner wants to sell as many products as possible, and visitors want to purchase products that they need.

The path to purchasing should be unburdened by obstacles. For example, when you need to get data from a prospect (like payment and shipping data) ask only for the data that you really need.

Optimizing the customer journey means tackling the lowest-hanging fruit in the optimization process (technical issues are the other low-hangers). By improving the customer journey and giving the customer clear and relevant information along the way, you’ll improve the likelihood of that customer converting. The stores that provide the clearest and most relevant information will be the ones prospects purchase from.

User testing is one of the best ways to check your website for heuristic issues. The process consists of assigning a random visitor a task and observing locally or remotely how they attempt to solve this task. When you get users to navigate your website and observe their behavior, any problems they encounter will be obvious.

Want to know more about how to spot and solve issues on your website using heuristic analysis? Check out this detailed post.

Quantitative analysis: The facts

The primary aim of quantitative analysis is to take all the data from your analytical tools and reports, and convert those data into insights. These insights will either help you solve a problem directly, or underpin the findings of the other three fields of analysis.

You can use quantitative analysis to uncover how individual or groups of visitors behave. By observing the number of visitors who visit your site, what pages they navigate to, and how long they spend on the website, you can deduce not only your conversion rate and the proportion of new to returning visitors, but what content is most popular, and which devices, operating systems, and browsers may have trouble accessing the website, etc.

Quantitative analysis can also provide a sound footing for spotting and solving issues by measuring the significance of each issue in numerical terms.

For example, you can examine your funnel to find out how many prospects drop out at each step. Knowing this information, you’ll uncover the significance of each issue, as well as understand the potential for its improvement. This information will help you prioritize hypotheses later on.

One critical component of quantitative analysis is attributing conversions to their respective marketing channels. Properly configured quantitative tools enable you to see how your traffic acquisition channels perform in terms of conversions and cost efficiency.

Since paid search and pay-per-click advertising are an important part of every ecommerce site’s customer acquisition strategy, making these channels as efficient as possible has a double effect of both saving costs and increasing revenue. Attribution analysis is a key function for any ecommerce business that depends on multi-channel or omni-channel marketing (which overwhelming majority does).

With this knowledge, you can concentrate your efforts on the best-performing traffic sources, and improve or abandon lower-performing channels.

Finally, by using quantitative analysis you can estimate the performance of your optimization program, and see if you’re doing it right. If you don’t notice an improvement, you can change your approach or focus more intensively on other aspects of your business. (No conversion optimization program can help you if your product suffers from a market mismatch or your business strategy is unsound.)

Quantitative analysis relies on analytics and other measurement tools to deliver its numerical insights, often in graphic or visualized formats. If you’d like to dig deeper into your quantitative data, check out this post.

Qualitative analysis: The feelings

Once you solve all the obvious technical and heuristic issues, the best way to improve your website lies in understanding customers and discovering why they act the way they do.

By improving the aspects of your website or offer that customers consider problematic, you’ll improve the entire website for all prospects and lower their barriers to purchase.

Asking customers what nearly stopped them from purchasing, or what other options they considered, as well as what other information they need to feel comfortable purchasing, can reveal obstacles for you to lower or neutralize.

You can get to know your customers using various methods of qualitative analysis, including surveys, polls, interviews and other direct communications with customers.

Your aim is to to decode why they visitors behave the way they do. By asking them questions, you can refine findings from other parts of the process — essentially finding the “why” behind the “what”.

Knowing the “why” is a critical component of making visitors’ experiences better, and your customers’ desires and wishes can help you improve your site.

The most important part is to establish what steps in the conversion funnel present the most issues for your customers and prospects. Furthermore, you need to identify what information or content is missing from your site (and what the visitors expect to see). Finally, you can ascertain what stopped prospects from converting — this may be the most important piece of information you need.

How to interpret your qualitative research

When you conduct qualitative research, the hard part is usually interpreting the results. There’s a danger of attributing overwhelming significance to a vocal minority with a complaint, and heading down an optimization rabbit hole. When you collect a wealth of data, it can be hard to make sense of, which is why techniques like cluster analysis can help identify the most important bits of data.

Cluster analysis is a simple technique that consists of identifying keywords related to issues, and counting the number of times these keywords appear in the surveys or interviews you conduct. Using cluster analysis, you can figure out which issues affect the largest number of customers and prospects and address those first.

For example, if out of 200 surveyed customers, 70 had trust issues with payment, and only a few had an issue with the provided product information, your greatest priority would be to improve payment security indicators and the overall credibility of the website (rather than addressing the relatively minor issue of product info).

The best way to do cluster analysis is to make a sheet listing the issues, and manually count them. Or, you can establish automatic reporting into a table using tools like Google Forms.

Using qualitative analysis, you can also establish personas — distinct groups of customers who share common characteristics. Personas include information on geographic location, age, gender, and other data that can be gathered using analytical tools.

Useful personas also include data on the customer’s average order value, interests, and the problems and challenges they face. Personas help you provide relevant content to each group of customers, and greatly improve the probability of conversion. To learn more about qualitative analysis, read this post.

Technical analysis: The “Fix this!”es

Put simply, technical analysis aims to ensure that your website functions properly. As technical constructs, websites are prone to errors and malfunctions that can have an adverse effect on your conversion rate. In fact, technical trouble can even diminish trust on certain parts of your website.

The surest way to detect any technical issue is to check the entire website for errors. Done manually, this would be inefficient and time-wasting. Instead, use tools like Screaming Frog, which crawls the website and finds all technical issues immediately.

In addition, you can use analytics to check for issues with different devices, browsers or operating systems. Relying on analytics to perform technical reviews offers an additional advantage, in that it offers the possibility to assess a given issue’s impact on the performance of the website.

The process begins by analyzing the technical aspects of a website, as this is the most important step. If visitors can’t see your website, they can’t convert!

Technical analysis must confirm that your website functions properly in every way. You’re checking for…

Browser and device compatibility

Your website should display the same way on every device your visitors use. By checking that your site displays correctly on different browsers and devices, you can detect and solve any problems.

Visitors using mobile devices to navigate to your website represent 50% of your audience. Mobile users are an important demographic, so your website should make sure that mobile users enjoy an experience that enables them to achieve their goals.

That means you need to make the process of navigating your site, from arrival to purchase, simpler and more automated for users on mobile devices. For instance, decrease the number of form fields required on mobile, and/or allow visitors to log in to your website using popular social logins.

Localization

The Internet used to be mostly English-only — until recently. Nowadays, customers from every country expect to websites to speak their language.

One task of technical analysis is to make sure your website is properly localized. For example, insert the proper country code, check that your geolocation works properly, and offer users translation options.

Site speed

Technical analysis should check how fast the website loads. Research has shown that a website has 2 seconds or less before a visitor loses patience and closes the browser or goes to another website. Mobile device users have even less patience. Therefore, your site needs to load as fast as possible in order to avoid losing customers.

Other technical considerations

Broken links, bad coding, wrong resolutions, and other technical errors can undermine website credibility more thoroughly than anything else. Yet these errors are the easiest to fix, and every process of improvement must begin there.

Learn more about technical analysis here.

How to conduct conversion optimization

The goal of conversion optimization is to make websites more accessible, trustworthy, and relevant to users. To achieve this goal, we analyze every aspect of the site’s performance.

General approaches to improving your ecommerce conversion rate

Conversion rate optimization methods

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

May 10, 2018

Improving ecommerce conversions is a function of many factors. Since a sale is largely dependent on the amount of information a prospect has, improving your site’s informational content will have a large effect on conversions.

Of course, information about products, transactions, and other information about your company, brand, or store takes precedence over every other type of information.

First, consider your sales funnel

The path customers take, from arriving on your site to completing a purchase, is known as a “conversion” or “sales” funnel. This descriptor references the fact that not all of your visitors actually end up purchasing anything from your website.

So the top of the journey is wide, or filled with visitors, and the bottom is narrow, which creates a funnel shape:

Typical ecommerce funnel
Typical ecommerce funnel

As you can see from this graphic, out of 1000 visitors to this example website, only 22 actually purchased anything, making for a 2.2% conversion rate.

Increasing this rate is the aim of conversion optimization efforts. And while ideally, we’d want to see a conversion rate of 100%, this is practically impossible. (For reference, Amazon, which is widely recognized as the best-performing ecommerce store, has a conversion rate of 13% for its non-Prime members.)

Provide more information about your products

Product pages (an area of your ecommerce website that we’ll examine in-depth later) are the primary place to offer information about your product(s). At the same time, providing more information in blog posts, how-to videos, or other helpful and beneficial content is the best way to draw prospects’ attention to your website.

The only way to persuade prospects to buy your products is to present as many persuasive facts about those products, as accurately as possible. Some of the ways to offer this info are:

  • Showing high-definition, accurate photographs of the products
  • Providing detailed description of products’ materials and functions
  • Customer testimonials and reviews (these are some of your best tools to make visitors convert)

This type of information makes searching for products easier. As prospects gather information on how your product can apply to their situation or problem immediately, they will be more likely to click buy. The point is to make the information relevant and appropriate to as many prospects as possible.

Relevance is the most important aspect of product-related content. You can make your content more relevant by making it “smarter” — that is, providing immediate and automatic recognition of different customers by gender, age, location, past purchases, or other distinguishing characteristics. Smart content is easily achievable using readily available tools for personalization and user recognition. This approach is part of personalization, which we’ll also talk about later on in a separate section.

Even though high-quality photos, videos, and other visual representations of your products are indispensable to conversion, the entire buying process must be made easy for prospects to convert. It won’t matter how good your product photographs are or how detailed your information is unless your prospect can easily complete a purchase through a series of logical steps.

Help visitors and customers identify more with your brand

Many ecommerce websites use content marketing to establish their brand and match it to a certain lifestyle or the interests of a significant group of visitors (their target market).

For example, a store that sells hiking equipment might publish articles or videos on where and how to enjoy nature; land conservation; and/or humane treatment of animals and the environment. A clothing brand might publish articles on topics relating to luxury or living well, which will help tie its brand to the perception of luxury.

Allay doubts and fears

Often, the largest amount of doubt and fear on an ecommerce site is tied to the process of payment and shipping. It’s paramount to establish trust and dispel any fears your customer may have about the security of their personal information or the process itself.

To enhance trust, be sure to include detailed and clear information on shipping costs (including countries or regions where shipping is free, and how customers can qualify for free shipping if you offer it).

The other critical aspect is payment. You need to be up front about accepted payment methods and assure customers that their info is secure.

There’s another layer of trust you’ll need to establish, too: namely, convincing prospects that your offer is legitimate. One of the best ways to dispel distrust in this realm is to provide content that proves the usability of your products.

You can also engender trust by providing content that shows there is a real organization behind the products your store makes and sells. Show customers you share their values and interests (the “About” page is a great place to do this).

Videos are an effective way to influence prospects with a credible message, and introduce them to your products in a way that no copy or photograph can. Consider creating video(s) of how to use your product, and showing examples of its application in a real environment.

If you can obtain them, video testimonials are an excellent way to increase your store’s credibility. By providing your prospects with the opinions of their peers, you can influence would-be customers much more than with regular old video.

Increase engagement

One of the important indicators of website performance is how engaged your visitors are as they navigate the content. More engagement generally means a higher likelihood of conversion as visitors spend more time on the site, and read and consume more content.

Along with blogs/articles and videos, which can prolong visitor engagement, interactive content can generate increased engagement. Many websites use gamification to increase engagement and make visitors feel more connected to the website. Gamification can be accomplished in a number of ways — frequently by offering “achievements,” prizes, or tokens to repeat customers.

Loyalty programs combined with gamification can be used effectively to increase customer lifetime value and average order value, as well as to make more customers into repeat customers.

Of course, the ultimate engagement happens when your site is able to recognize every customer and provide them with content and experience tailored to their needs. This is where personalization comes in.

How to start using personalization to your store’s benefit

“Personalization” has become one of ecommerce’s most frequently used words. The basic goal of personalization is to make a website and its content responsive to each individual customer.

According to a study done by Forbes, 96% of all marketers believe that personalization is essential to increase conversion, and 88% noticed a measurable increase in revenue when they implemented personalization.

Personalization means you need to collect every available data point about your visitors and customers, and use those data to derive information about what that customer likes or enjoys. A website can be personalized in a number of ways, but the main aim of personalization is to make the prospect’s journey to conversion shorter and easier. Prospects should immediately see products and/or options they want to buy.

Personalization doesn’t stop there, however! It should inform everything you do on the website, recognizing and taking into account prospects’ interests, values, motivations, challenges, and fears.

At its core, personalization means to offer marketing message custom made to each individual, resulting in increasing the likelihood each of them converting. A truly personalized user experience doesn’t just offer relevant content, but anticipates the prospect’s needs and desires.

By offering visitors relevant content, guiding them to the products they need, and making them offers that correspond to their life situation and their current stage in the buying process, you ensure that prospects’ motivation and ease of use will be met by a trigger at the right time.

Repeat customers can be encouraged to provide more data, which you can then use to make following shopping experiences even smoother. This data can also be used to match the behavioral patterns of prospects who have not yet purchased anything from your website. This way, you can provide a large part of your audience with some sort of personalized experience, and increase the likelihood that each visitor will convert and purchase something.

As your customer base grows and you obtain more data, personalization will prove to be one of your most powerful tools for increasing conversion. Even the most rudimentary personalization can help increase the conversion rate of first-time visitors and of visitors from other countries, encourage repeat purchases, and reduce cart abandonment.

Personalization can be achieved in two primary ways:

  • Customized experience using customer input
  • Automated personalization using available data

One of the most commonly used methods to increase website personalization is to use personas, or groups of visitors that share common characteristics.

By developing personas, you can start to personalize a prospect’s experience as soon as they arrive on the site. Use common behavioral indicators (ex. clicks on particular content, acquisition channels, location, or interests) to observe patterns of behavior and immediately slot individual prospects and visitors into a group.

For more information on how to create personas, read our article on automating persona creation.

Customize your store experience using customer input

Personalization can easily be achieved using customer input. If you have a method for customers to register, you can then allow them to select layout options for the site, change their display language, or alter other customizable elements of the website.

This type of customization is powerful because it enables you to provide every customer with an experience that mirrors the desires they express. Plus, it doesn’t depend on tracking or interpreting prospect behavior.

But customization does have one serious drawback that limits its use. Because it depends on data that customers willingly choose to disclose, you’ll need to win their trust and confidence first. Prospects need to register and then start inputting their preferences. Needless to say, they might bounce or never bother to fill in that info.

That’s why you shouldn’t depend only on the data your customers elect to provide. You should also use automation and available data to personalize your store’s web experience.

Automate personalization using available data

Automated personalization has a major advantage over customer-input personalization: namely, that it doesn’t require any conscious effort by the prospect to fill in the information you need. By using a combination of quantitative methods and qualitative research, you can automatically profile prospects and sort them into groups.

Most analytical tools enable you to gather data on visitor location, age, gender, acquisition channel, and behavioral patterns.

By observing and analyzing this info, you can create personas and start personalizing content according to given criteria.

The simplest method is to personalize according to location. Clothing stores often use this approach to provide visitors from specific locations with offers for products that correspond to their climate and current season.

The drawbacks of personalization

While personalization can be extremely useful, there are situations when personalizing user experience can create additional issues — and instead of increasing conversions, it can do the opposite.

First, if you decide to automate personalization, make sure the data you use can be easily translated into something that an automated software can understand and apply. What does this mean? Essentially, you should personalize based only on relatively unchanging elements.

If you go too far with personalization and try to second-guess your customers based on wrong or outdated assumptions, you can end up making their user experience worse.

The second issue is introducing personalization on a level that creeps visitors out. The best personalization is timely and contextual, so prospects and customers see the offer they want, at the time they need it, and in a context that makes sense.

For example, if your prospect is looking for a laptop computer and you can identify her expected use (mostly for work), offer her devices with a configuration that’s appropriate for business.

How not to personalize: Any personalization effort is always a hair’s width away from going from relevant to creepy. While some of your prospects may assign little value to privacy, many will have concerns about it. If you want to make personalized offers, take care to set reasonable expectations with your customers.

Some guidelines:

  • Make sure you provide them with a timely opportunity to explicitly opt out
  • Do not personalize based on personal identifiable data (such as home addresses names of the members of the family etc), even if you have this data
  • Make sure that you don’t offend or hurt your customers through inconsiderate promotion, as in the widely quoted example of a father finding an offer for prenatal products addressed to his daughter.
  • Before you start any personalization, establish strict guidelines and procedures for what data to use.

In addition, don’t offer them benefits that they do not qualify for or make wide assumption based upon a single data point. For example, a person interested in organic food may not necessarily be into paleo diets or vegan food. Before you make any assumptions, make sure you have multiple data points available and match them for more accurate and relevant results.

In addition, make sure your personalization is not shallow (ex. offering customers a product they have already bought, or just because they have it in their browsing history).

You should always be collecting data and learning from your customers. No information should be neglected or skipped, since everything your customers and visitors do can help you personalize their experience. Just make sure you use the data wisely and without creeping out your customers.

Conversion rate optimization methods

Improving ecommerce conversions is a function of many factors. Since a sale is largely dependent on the amount of information a prospect has, improving your site’s informational content will have a large effect on conversions.

Important elements of an ecommerce store

UX elements of ecommerce store

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

May 3, 2018

User interface

The user interface is one area where nearly all websites can improve. It can always be made simpler and more user-friendly, but often, this work is overlooked.

Some of the most important elements of user interface are:

  1. Input controls
  2. Navigational elements
  3. Informational elements
  4. Containers

Let’s go through these one by one.

Input controls

Input controls provide visitors with a means to convey their intentions and information to your website, and perform desired actions. By making the input elements easier to use, you can improve the user’s interaction with the website.

UX elements - form
UX elements – form

If you make interaction easy, than your triggers will have a better chance at converting your visitors into customers. This includes making your forms as short as they can be, ensuring that calls to action are prominently visible, automating input fields, offering drop-down selection menus with limited available answers, etc.

For example, if call to action buttons (“Add to Cart,” “Buy”) on your product pages are prominent, it will be easier for the customer to find them once they decide to buy. If your page has multiple screens of info, make sure the CTA buttons are anchored.

Ecommerce sites can also benefit from adding call to action buttons on product thumbnails on category pages.

L.L. Bean’s product pages include breadcrumb navigation and a prominent call to action button
L.L. Bean’s product pages include breadcrumb navigation and a prominent call to action button

Navigational elements

Navigational elements enable your customers to find the things they need on your website. They include search fields, breadcrumb navigation, pagination, tags, and icons. These items make it easier for the visitors to understand and navigate the structure of your website.

Ecommerce websites should always provide breadcrumb navigation in the structure of their product pages. If your customer advances from the home page through product categories and subcategory pages to a specific product page, enable them to backtrack their progress — since they may change their mind or want to see other products in the same or different categories.

Proper pagination and enabling prospects to enter a specific page number eases navigation through multiple pages of product categories and products. Make sure your prospect is aware of their page position at all times.

Amazon’s bottom-of-the-page numbering shows visitors where they are.
Amazon’s bottom-of-the-page numbering shows visitors where they are.

Search fields are some of the most important and useful navigational elements. If a visitor knows what they want but not where it is, they can find the product or item they need immediately by using the website search.

Thus search becomes a shortcut to the action or goal they want to achieve. This is another way to increase the ease of matching your visitor’s motivation, and making the trigger more likely to work.

Informational content

Informational content provides visitors with information on other elements on the page, or on the shopping process. These elements include tooltips, icons, progress bars, notifications, and message boxes.

For example, tooltips can make it easier to fill out forms, and progress bars provide information on how long a process will take, alleviating visitor concerns. You can also use tooltips to show different available options for a product, ex. size or color.

Notifications are mostly used to correct errors and notify visitors that they’ve been successful at a given step.

Progress bars can be used to inform prospects of their progress through processes that require extended user input — for example, configuring a laptop computer or adding information during purchase.

Progress bars also eliminate one of prospects’ greatest sources of friction. By indicating how much time the prospect should expect to spend, you diminish their uncertainty and reassure them.

Here’s an example of a checkout process with a progress bar
Here’s an example of a checkout process with a progress bar

Containers

Finally, containers represent information condensed in a collapsible form. They’re mostly used to lighten informational load and enable visitors to see only the information that is relevant to them.

Ecommerce stores use containers to provide information that may interest some prospects, but not all of them. By collapsing this information (while still providing a clear indicator that it’s there), you minimize informational load for prospects.

Lenovo uses containers to help prospects navigate their product offer
Lenovo uses containers to help prospects navigate their product offer

Checkout experience

The checkout experience is a critical point in the entire user experience. A key part of this experience is a conversion funnel, AKA the path the visitor takes from adding a product to visiting the cart to completing the transaction.

Once a prospect enters the purchase process, they need to proceed through it with as few distractions or obstacles as possible.

The key to a smooth checkout process is to make forms and customer inputs as unobtrusive as possible. Short forms, login options via social media accounts, payment using third-party systems like PayPal, and automating shipping forms by adding location recognition whenever possible, makes the process smooth and quick.

Shipping policy

A store’s shipping policy is part of the shopping experience, and can have a decisive influence on the prospect’s decision to purchase. One of the greatest complaints of prospects who drop out of the conversion process is shipping policy and cost.

In fact, 68% of all people who drop out of the conversion funnel report that they quit because the shopping policies were communicated too late in the process, or the shipping cost was higher than expected.

This is why you should put great effort into making your store’s shipping policy clear and transparent. Most ecommerce stores nowadays offer free shipping either outright, as part of a subscription package, or for purchases above a certain amount.

Return policy

Return policy is one of the best trust indicators you can employ. If you promise to refund or replace faulty products free of charge, you’ll foster trust, and prospects will be inclined to believe you, especially if the claim is substantiated by evidence. If you have a return and refund policy, try to show feedback from customers who have successfully used it.

Contact page

To increase credibility, provide a contact page to show prospects that a real and legitimate business exists behind the website. Provide addresses and pictures of your premises, employees, and founders to prove your store isn’t a scam.

About page

Your store’s “About” page should provide more information about your store and its mission or focus, including your unique value proposition, the provenance of the products you sell, and similar information.

If you’re connected with prominent institutions, companies, or governmental agencies, show those connections here. You can also use the page to provide evidence that your products are used by celebrities and other influential personalities.

Homepage

The homepage, or front page, is the page that prospects see when they type your direct URL in their browser or search for your brand name online. The homepage’s function is to build brand awareness and to steer prospects toward the shopping area. To achieve this goal, your homepage needs to provide links to all the areas of your store, and offer the ability to find or compare products.

Another important aspect of the homepage is including a call to action to some of your most popular products. This enables prospects to find what they want immediately on arrival. You should also point out any current deals or benefits to prospects on the homepage.

Category page

Category pages are crucial to effective, easy navigation. They should enable prospects to reach different groups of products, in much the same way that sections or shelves function in brick-and-mortar stores.

Products on category pages can be displayed outright, or sorted into subcategories. You can also use category pages as landing pages for your PPC and paid search campaigns.

To ease category page navigation, offer pagination and filters if there are more products than can fit on one page. Also, enable users to sort products by different criteria (price, most popular products, etc). These simple navigational aids can greatly ease the prospect’s task.

Don’t forget to allow prospects to add products to the cart directly from category pages.

Product pages

Product pages are the main place where your prospects find information about your products. Each product page has one job to do: provide prospects with all the information they need to buy your product with confidence that they’ve made a good choice.

Product pages can feature product photography, descriptions/copy, specifications, user reviews, and testimonials, and customization opportunities. You can also add indicators of scarcity or urgency, such as the number of items remaining in stock, or notifications such as “Order by 2PM for item to be shipped today”.

Finally, the product page is also an excellent place to present cross-sell and upsell opportunities. Offer related products or products that complement the one the prospect is viewing (for example, show prospects on a mobile phone product page a selection of phone cases and accessories).

Privacy page

Every ecommerce store needs a privacy page to inform visitors that their privacy is respected, and their personally identifiable data is treated with due care. This is important to increase trust with your prospects, and neutralize any reluctance they may feel in providing you with their address or credit card numbers.

Terms page

To further protect both you and your customers from any misunderstanding, your store needs a “Terms of Service” page. This page provides prospects and visitors with information about how your website conducts business, how users can cancel their accounts, and usually clarifies your purchase, shipping, and returns/exchanges process. More to the point, to be able to use most payment gateways, you need to have a terms page.

UX elements of ecommerce store

As most websites, ecommerce stores have elements and here we have listed them.

The business case for CRO

The business case for CRO

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

April 19, 2018

When does CRO make sense?

As with any investment, there is a time and place for CRO. Let’s get into when and how to implement CRO so it makes sense for your business.

The right time for conversion rate optimization will become obvious once you reach the limits of growth through other means. Getting to this point means you have already solved the basic issue of product-market fit, you’ve ensured regular profits from your business, and you’ve reached a relatively stable number of visitors. This is the ideal time to dedicate increased efforts to optimize your conversion rate.

(This is not to say that you can neglect the basic aims of CRO even earlier: AKA creating a user-friendly customer experience, defining your unique value proposition, and addressing technical issues.)

However, a fully fledged conversion optimization process is only possible once you have a mathematically significant number of customers, and you’re able to conduct every part of the CRO process (measurement, research, and testing) with full confidence in the results.

Prior to this point, your ROI from other activities — such as business process improvement, product development, and traffic acquisition — will be greater.

Since product development and business process improvement are somewhat outside of the scope of marketing techniques, we’ll assume you’ve managed to overcome those hurdles if you are considering CRO and traffic acquisition.

Now, let’s examine traffic acquisition briefly as a potential competing way to increase revenue.

Costs and benefits of CRO

The costs of conducting a conversion optimization process are usually presented as an up-front fee paid to a conversion optimization agency, regardless of the final result.The effects of a properly applied conversion optimization process are permanent, and additional investment can make the results even better.

Even if you test everything already, the CRO process can help you redesign your website to entirely new specifications (while avoiding costly missteps).

The cost of agency-conducted CRO is usually not tied to performance. It’s often a fixed sum, to which only the cost of tools and eventual costs of benefits for customers are added. Since an agency-led process involves close cooperation with the staff of the site being optimized, it also results in the creation of a knowledge base that enables the site’s team to continue optimizing on their own once the initial contract ends.

In truth, no ecommerce store can neglect conversion optimization and experimentation if it wants to grow.

conversion rate optimization business case - unbounce
According to an Unbounce study, this is the best combination of SEO and CRO budget (source)

And here is a quote from the article the table is sourced from:

“Your own private sweet spot (?) will depend on how successful your CRO efforts are. Perhaps you’ll only achieve a 5% increase per $1,000 spent. The only difference is that you’ll have a different chart and a different sweet spot. The important thing to learn here is that there does exist a point where you optimize your expenditure based on optimization efforts.” Oli Gardner, founder of Unbounce

Put another way, the initial cost of the CRO process is not likely to grow exponentially or significantly, even after a prolonged period.

Let’s look at the benefits CRO offers in both the short and long term.

The process of conversion optimization research has immediate benefits for every website. As we’ve seen, technical and heuristic research can provide immediate solutions to obvious issues, which can also have the fastest impact on a store’s conversion rate.

Most practitioners have reported some of the greatest increases in conversion rates in this short-term phase, even before conducting any experiments. Fixing technical and obvious heuristic issues makes a website much more accessible to visitors, and can help recover prospects who dropped out of the funnel for related reasons.

More mature websites, where these issues have already been largely sorted out, will experience steady, albeit usually lower growth.

Taking a longer view, conversion optimization improves the overall content and design of your website. These benefits will show up later and have a compounding effect over the long term. By improving your content’s quality and relevance, learning about your customers, and increasing personalization (an aspect we’ll cover in more detail later), your store can experience exponential revenue growth and even attract more visitors.

What’s behind these longer-term benefits? Simply put, the CRO process makes your website and your entire approach to customers better and more effective. Qualitative research is most useful here, as you’ll find out more about your customers…. and then you can bring your offer more in line with their expectations.

The prime benefit of CRO lies in establishing an ongoing process. As a matter of fact, that’s how all the big names in ecommerce (Amazon, Booking.com etc) have found success.

When you start conversion optimization, you enter a self-perpetuating cycle.
When you start conversion optimization, you enter a self-perpetuating cycle.

Pros of conversion optimization

We’ve already covered some of the most important benefits above, so how about looking at some of the less obvious ones?

  • You can start the conversion optimization process yourself at a relatively low cost
  • In the initial phase, you’ll likely see large and immediate wins
  • You can learn more about your market and target audience
  • Conversion optimization helps make your overall marketing more effective, by allowing you to target audiences more likely to correspond to your ideal customer
CRO impact
CRO impact

Cons of conversion optimization

While the advantages of conversion optimization are many, there are only a few real disadvantages. The main disadvantage lies in the fact that the process requires effort and diligence. After the initial gains, there can be a period of decreased gains, which may disappoint you. However, as we examined above, this situation won’t last, and the gains will pick back up as the process runs its course.

Essentially, the only con is the need for patience to complete the research diligently and methodically. Sometimes this research can take a month or two.

As attractive as conducting experiments may sound, you need to keep in mind that experimentation isn’t viable unless you have enough traffic to make testing possible, and you’ve also conducted enough research to make testing cost-effective.

Another disadvantage is the time it sometimes requires to achieve gains after the initial ones. While initial gains can be immediate, the process of structuring hypotheses and running tests can take six months to a year. This kind of timeframe may be intimidating at first.

However, you can be confident that the advantages greatly outweigh the disadvantages, and that a properly conducted process of conversion optimization is the most cost-effective growth activity you can conduct.

An example calculation of the ROI you can derive from CRO.
An example calculation of the ROI you can derive from CRO.

As you can see, with an assumed conversion rate of 2%, 5000 daily visitors, a profit margin of 20%, and an increase in conversion rate of (a relatively moderate) 5%, an ecommerce store can return its entire CRO investment within 8 months. Even this minimal increase in conversion rate results in a quick return on investment.

You can do your own calculation, using our web based ROI calculator.

The business case for CRO

When does CRO make sense? As with any investment, there is a time and place for CRO. Let’s get into when and how to implement CRO so it makes sense for your business. The right time for conversion rate optimization will become obvious once you reach the limits of growth through other means.

What is conversion optimization and why your eCommerce store needs it

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

April 11, 2018

The notion of ecommerce arose as the Internet grew out of its infancy and became available to a large number of people. As the Internet became accepted and more approachable to the majority of the population, without requiring technical knowledge for its use, it became possible sell products through this new medium.

In 1995, some of the first ecommerce stores, such as Amazon and eBay, became operational.

Since then, ecommerce has continued to grow almost exponentially. According to a study by eMarketer, ecommerce retail growth will continue is expected to reach $4 trillion US in 2020.

Conversion Optimization Guide - Expected eCommerce Growth
Conversion Optimization Guide – Expected eCommerce Growth

But despite the ecommerce industry’s fast growth (or rather due to it), competition on the market is intense, and all the advances in technology still have some hurdles to overcome.

Challenges faced by online stores

  • Physical disconnect between the consumer and the product/store
  • Security concerns about payments
  • Security concerns about personal data
  • Concerns about the quality of delivered products, as opposed to what’s shown on the page
  • Amazon — A challenge of its own, since it sells everything at great prices with affordable (usually free) shipping

Overcoming the physical disconnect is not an easy proposition. An ecommerce store needs to present its products to potential customers in a way that makes the customer decide the product is something they would pay for.

Since the prospect can’t touch, smell, or taste your product, they have to rely only on what they read, see, or hear on your site.

All those early ecommerce stores had a clear vision of what they wanted to be and how they would operate. This vision, however, was not aligned with available technology. The early Internet was a novelty, and most consumers didn’t trust it; nor was the user interfaces evolved enough or the access fast enough for the majority of users.

At first, ecommerce stores faced the obstacle of prospects who were unfamiliar and ill at ease with buying products online. The concept required consumers to make a mental switch, actually deciding to buy something they could not touch or feel. Early adopters proved the concept had merit, and eventually, more and more people decided to buy online.

As turnover of ecommerce stores grew, various techniques used to gain consumer confidence developed — all with the ultimate goal of turning as many visitors into customers.

While brick and mortar stores need to get window shoppers to purchase products, ecommerce stores need first to convince their prospects that the shopping window was real. These efforts resulted in the creation of techniques to foster trust and increase a prospect’s likelihood of buying, and their systematization led to the creation of a number of industry-wide best practices.

Finally, every ecommerce store must consider the fact that Amazon.com is the most popular ecommerce site online. Virtually every product can be bought there and Amazon offers free shipping everywhere in the U.S.

Your store can only succeed online if it positions itself in a niche segment and offers better conditions for specific products. Every store still needs to overcome the credibility gap that exists between its offer and Amazon’s.

Conversion Optimization Guide - Why not Amazon?
Conversion Optimization Guide – Why not Amazon?

The basic psychology of conversion

Before we go any further, let’s examine one of the most renowned theories of conversion psychology. According to a model created by Stanford professor B.J. Fogg, the primary elements of conversion are motivation, ability, and trigger.

When combined, these three elements lead the prospect to a desired behavior or action. In terms of ecommerce, that desired behavior is purchase.

“Motivation” is the initial value that reflects the customer’s desire to solve their problem using your products. This is largely a given value, and there’s very little that can be done to increase it.

However, you can actually lower prospects’ motivation to purchase if your website doesn’t fulfill certain requirements. Motivation can be thought of in three subcomponents: pain/pleasure, hope/fear, and social acceptance/rejection.

This is the point where triggers and ability come in. “Ability” means that prospect is actually able to turn their motivation into action. The easier it is to act (AKA purchase), the more likely a prospect will be to convert, and vice versa.

Ability depends on a variety of factors, such as money, time, effort, state of mind, social deviance (we’ll get to this), and how routine a task is.

The “trigger” is the specific spark that drives a customer to action. In practice, it’s called a “call to action”. Triggers begin to succeed at the intersection of motivation and ability. Below that line, they’ll fail, and you’ll need to reconsider where your trigger (call to action) is placed and what your prospect’s motivation is at that moment.

Conversion Optimization Guide - Fogg Behavior Model
Fogg’s model of behavior, showing the “action line”

Two ways to generate more ecommerce revenue

Before we begin talking about CRO, let us just briefly examine an alternatives.There are two basic ways to increase the revenue of a website. One is to bring in more visitors (increase traffic), and the other is to turn more visitors into prospects (increase conversion rate).

Way #1: Increase total traffic

Getting traffic is vital for any website on the Internet, so there are multiple ways to attain it. Plus, doing A/B testing without traffic usually doesn’t make sense.

Cost of traffic acquisition

The cost of traffic acquisition is usually expressed as cost per thousands of visitors delivered. Search engine optimization can be highly variable in pricing, starting from a couple of hundred dollars and reaching into the tens of thousands. SEO is an indispensable marketing activity for low-traffic ecommerce sites.

Pros of traffic acquisition

The benefits are obvious. More people will come to your website, and you’ll rank higher in search results as they research purchases. This enables you to grow traffic further, attracting even more visitors and more customers.

It’s a lot like the ancient credo of brick and mortar stores: “Location, location, location!” Except instead of a prime physical location, your store will enjoy top search engine results page rankings for relevant keywords.

Cons of traffic acquisition

There are two problems with traffic acquisition as a main engine of ecommerce growth.

First, the cost of traffic acquisition tends to curve as it grows, reaching an exponential as your traffic increases. Second, the potential of traffic acquisition is finite — there are only so many people you can attract to your website.

Sooner or later, you will encounter one of these obstacles.

Conversion optimization guide - Sooner or later, every marketing activity hits the point of diminishing returns.
Sooner or later, every marketing activity hits the point of diminishing returns.

To solve this problem, you can turn to other solutions like growing the likelihood of purchase, expressed as your store’s conversion rate.

Way #2: Increase conversion rate

An increased conversion rate is the balm to soothe the growing costs of traffic acquisition. It allows you to grow revenue from your existing visitor base without having to bring more visitors to the website.

By improving your content, user interface, and other elements of your website and/or offer, you can both make it more likely for visitors to buy and to leave with a positive impression of your website (positive enough to influence other visitors to buy, too). Customers can encourage potential prospects through reviews, testimonials, or social network activity.

CRO works hand-in-hand with SEO to improve your website’s relevance, clarity, quality of content, technical functionality, and more. Together, these two disciplines can improve both your website’s appeal to prospects, and the performance of your selling process.

By determining your target audience and identifying the best-performing customers, you can better focus your marketing and SEO efforts.

The role of conversion optimization in ecommerce

Eventually, the entire process of analyzing a website from the ground up in order to increase its profitability and total revenue became known as conversion rate optimization.

It can be broadly defined as “all activities aimed at increasing the likelihood that a visitor to the website will actually convert from prospect to customer”.

By its very nature, CRO for ecommerce is a multidisciplinary approach to increasing purchases and improving the performance of online stores. It combines customer psychology, website copy, UX, design, and functionality into a mix that makes the visitor want to buy from your store again and again.

While conversion optimization can be seen as an exact scientific approach to the problem of increasing conversion rates, there are some caveats. Unlike with math or other exact sciences, there are no definitive answers and solutions in CRO. What might work for one ecommerce store might not work for the next one.

Yes, there are some best practices, but the rest of the process involves researching and testing ideas for improvement. Testing ideas means that optimizers can implement the winning solutions to enhance your ecommerce store, improve revenue, and provide a smooth shopping experience for your customers.

Next week we will cover what the business case for CRO is. Stay tuned!

While conversion optimization can be seen as an exact scientific approach to the problem of increasing conversion rates, there are some caveats. Unlike with math or other exact sciences, there are no definitive answers and solutions in CRO. What might work for one ecommerce store might not work for the next one.

How to Track YouTube Video Performance Using Google Tag Manager

Track YouTube video performance using Google Tag Manager

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

March 21, 2018

You probably already know that video is the best way to make your products and services easier to understand for your prospects and customers.

And when it comes to using video online, YouTube is the largest and most accessible video-sharing community in the world, enabling you to embed videos directly to your website(s).

Odds are you’ll end up using it, so it’s important that you learn how to track the performance of your YouTube videos. It’s the only way to know which videos are working, which aren’t, and how much of each video your visitors watch.

Until recently, you could only track YouTube videos on your website using specialized code in Google Tag Manager. Basically, you needed to either come up with your own JavaScript code or use someone else’s finished recipe (like LunaMetrics) or plugins, like WordPress’ plugin for YouTube.

What changed? Google added a trigger to Google Tag Manager that lets you set up YouTube video tracking quickly and easily.

Now — finally — you can use Google Tag Manager to accurately measure visitor engagement with your video content.

Why would you even want to track your videos in Google Analytics?

After you upload a video to YouTube, you get access to analytics data on that video. Even if the video is embedded in your website, the data will still be recorded in the YouTube interface.

So, if YouTube already has tracking installed, why would you want to track this data in Google Analytics as well?

Four very good reasons:

  1. You see all of your data in one place — By having all your analytics data in one place, you don’t need to switch between different applications to analyze your customers. Keeping everything under the same Google Analytics roof makes it much easier, faster, and more efficient to draw insights.
  2. You can use the tracking data as a base for future goals — By creating events of video views, you can use those events as goals in Google Analytics, letting you track as a visitor that interacts with your videos directly as a “conversion”.
  3. You can easily compare results and track visitor progress visitors (using behavior and event flow reports) — When data is available within Google Analytics, you can track and compare the behavior of visitors over different time periods, or based on their acquisition source or other traffic properties in Google Analytics. In Google Analytics, you can see which videos were most popular, which led to conversion and purchase, and so on.
  4. Ability to see which visitor segments viewed the videos more than others — Finally, in Google Analytics, you can use segments to observe how popular your video or videos were for different groups of your visitors. This way, you’ll know what part or parts of your video were excellent and which weren’t good enough, instead of only knowing that visitors didn’t like it. You can even personalize your videos based on data from your segments.

How to set up your YouTube trigger

You can easily set up a YouTube trigger as a tag, similar to the mechanism for scroll tracking. Instead of percentages of page depth, you’ll use a percentage of video length.

To create a GA event that will report a YouTube video being watched, start by creating a new tag. When you open the new tag dialog, you’ll first need to select the type of tag you want to use.

The new tag configuration interface
The new tag configuration interface

The dialog box consists of two main elements: “Tag Configuration” and “Triggering”.

Tag Configuration allows you to select the type of tag you want to use, including “Analytics” tag, “Third-party” tag, and “Custom” tag. Triggering allows you to define the precise circumstances that will activate the tag and send a hit report to Google Analytics.

Since you want the hit report to appear in Google Analytics, the tag type you select should be the Universal Analytics tag.

Selecting a tag type
Selecting a tag type

When you select the Universal Analytics tag type, you only need to use a Google Analytics setting to enable Tag Manager to establish an event that reports hits to your GA account.

If you’ve set up your Google Tag Manager properly, you will have made a variable that contains the ID number of your Google Analytics account, as well as other settings you can modify using Google Tag Manager. Make sure your Google Analytics Settings field contains the variable with the correct ID number, or the data from the tag will not be reported to your GA account.

The tag configuration dialog
The tag configuration dialog

“Track Type” is an important part of tag configuration, since it defines what’s being tracked. For the usual application of tracking in Google Analytics, Page View is the default track type, so the tag can be fired on every page. This means that the tag will be added to every page of the site, but fire a report only when the selected conditions are met.

For pages that contain no video, the tag will remain inactive.

When you finish with the tag configuration and define the tag type, you’ll also need to define the trigger for the tracking event. The trigger is a set of circumstances that will send a report to Google Analytics and show when the visitors play and view the video. The trigger is a necessary element in every Google Tag Manager tag, as it makes the tag fire.

Next, define the trigger

To define the trigger for the tag, click the Triggering section at the bottom of the new tag dialog.

The triggering configuration box
The triggering configuration box

When you click on this box, a dialog opens where you can select the type of trigger you want to add to your tag.

The trigger for “YouTube video tracking” has recently been added to the number of triggers available by default, which — luckily for us — removes the need to use third-party solutions that required a ton of code.

Types of available triggers
Types of available triggers

When you open the “Choose a trigger” dialog, you’ll see only the triggers you’ve used so far. If you haven’t used the YouTube video trigger type before, it won’t be listed among your available triggers. You’ll need to add it to the list.

To add the trigger, click the plus sign at the top right corner of the dialog. This will open the trigger configuration dialog.

The trigger configuration dialog box
The trigger configuration dialog box

By clicking inside the box, you can choose a trigger to add to the list of the available triggers. Click “YouTube Video”.

The trigger selection dialog box
The trigger selection dialog box

Once you click “YouTube Video,” it will open (another) screen — this is where you’ll define the properties of the trigger. For any trigger to function properly, you need to define the visitor actions you want to track.

Trigger properties that you can modify
Trigger properties that you can modify

There are three types of properties in the YouTube trigger that you can adjust to enhance how the tag sends a video-playing event report to Google Analytics.

Property 1: Capture

Capture contains four different actions: “Start,” “Complete,” “Pause, Seeking, and Buffering,” and “Progress”. Each has a checkbox you can check to enable tracking and reporting of the specific actions in Google Analytics.

As the name suggests, “Start” tracks and reports when visitors click the start or play the video. This report will be contained in GA’s Behavior events section, allowing you to analyze the number of visitors who started playing the video vs. the total number of those who navigated to the page.

Likewise, “Complete” tracks the proportion of visitors who viewed the entirety of the video. This piece of information, together with the number of those who started the video, is vital to judge your video’s success. If only a fraction of visitors actually view the video in its entirety, it may mean that it is not engaging enough (read: it’s boring).

The operative words in the previous sentence are “may mean”. While in general it’s true that you would want your audience to view your entire video, even if they don’t, you might still see good results.

Your video can still be a smashing success even if the audience views only half of it, and then decides to buy something from your website.

You’d never know that if you were limited only to the first two properties, “Start” and “Play”.

Of course, you could examine your Event Flow report and analyze the proportion of visitors that end up converting after viewing the video.

The approach using the Event Flow report is helpful to confirm that you actually profit from having videos on your ecommerce website, AKA they either lead to more conversions or represent an integral part of your customer experience.

An example Event Flow report
An example Event Flow report

But if this report is inconclusive — i.e., viewing video does not result in changes in user flow or behavior — you’ll then need to observe other indicators of video performance.

Property 2: Pause, Search, and Buffering

“Pause, Search, and Buffering” show you the parts of videos where viewers paused, skipped, or encountered a buffering problem. While pausing is likely an inconclusive piece of data, since viewers pause video for any number of reasons, the other two actions can be more indicative.

If you detect that many visitors actually skip some part of your video, you may consider editing the video to leave out that part and shorten the video.

If an equal number of viewers views different parts of your video, you might consider splitting it into two parts, thus engaging both segments of your audience better. (By analyzing the structure of your audience, you can increase personalization by offering each segment only the part they are interested in.)

Property 3: Progress

Finally, the “Progress” property indicates how far in the video viewers progress. Similarly to scroll tracking, progress is shown in Percentages or Time Thresholds.

Configuring the “Progress” property
Configuring the “Progress” property

Percentage (or time) of video viewed is important in understanding the performance of your video, since it offers a more granular analysis of viewer behavior. While the majority of viewers may not watch to the very end, maybe the most important part is toward the beginning — and that part influences the behavior of your visitors. In this case you can even consider shortening the video itself, since it seems to be doing the job.

Of course, if the opposite is true, and the majority of viewers stop watching the video at some point, especially early on, you’ll have a clear understanding of where to improve the content of your video.

Advanced functionality

Using advanced functionality, you can track videos embedded on your page using JavaScript that plays them automatically, stops them at a certain time, etc.

By enabling API support you can track the videos implemented through iFrame
By enabling API support you can track the videos implemented through iFrame

Since these videos are implemented through an iframe, tracking viewer activity inside them requires that you enable the Add JavaScript support in GA. Additionally, this parameter will automatically add API calls to all the YouTube videos on the page.

Decide when the trigger should fire

The final parameter you can adjust is to enable the tag to trigger on all or only on some videos on your website. Triggering the tag selectively can lower the load on your analytics effort by excluding less-important videos from tracking.

Trigger firing
Using ‘Some videos’ option you can limit tracking to videos you deem important
Track YouTube video performance using Google Tag Manager

You probably already know that video is the best way to make your products and services easier to understand for your prospects and customers. Until recently, you could only track YouTube videos on your website using specialized code in Google Tag Manager. You can now do this easily as Google added a trigger to Google Tag Manager that lets you set up YouTube video tracking.

Turn Google Tag Manager’s Scroll Tracking Feature into a Powerful Visitor Insight Engine

Google Tag Manager Scroll Tracking

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

March 13, 2018

Virtually every website, ecommerce and otherwise, contains at least a few pages of content longer than a single screen — so visitors have to scroll down.

Chances are you’d like to see how far down the page your visitors actually scroll, especially if they’re browsing a product page or similar page that contains important information below the fold.

Until recently, the only way to do this in Google Analytics was to use Google Tag Manager and create completely new events, custom dimensions and triggers.

The non-Analytics method was to use mouse tracking tools like Crazy Egg, Hotjar, or Mouseflow to track how visitors behaved on your website (among other things, how far down they scrolled). And while all of these tools offer excellent and compellingly-visualized data, they’re not free.

The Google Tag Manager method was free — but it involved a huge amount of code to define events, variables, and triggers. If you weren’t familiar with JavaScript, you’d be forced to depend on pre-developed packages without many options to customize.

A few months ago, however, Google created a number of new triggers and event types. Among these: the ability to track visitor scrolling using tags.

How to set up a scroll tracking tag

First, create a new tag

In order to set up a scroll tracking tag in Google Tag Manager, click the “New tag” button.

Google Tag Manager Scroll Tracking - Tag Creation
Click the button in the red rectangle to create a new tag

A new dialog window will open, where you’ll need to select the type of tag you want to add. Since you want this tag to report data to Google Analytics, select one of the Analytics types.

It’s likely that you’re using Universal Analytics, the latest incarnation of the tracking code, which has been available for a few years.

Google Tag Manager Scroll Tracking - choose tag type
Tag types available in Google Tag Manager. Select “Universal Analytics” (in the red rectangle above).

Next, configure your tag

Once you select the correct tag type, you’ll need to configure it in the Tag Configuration dialog. Since you use Google Analytics, you need to provide your account’s UA identification number.

Simply select the Google Analytics configuration variable, which is configured specifically for the Google Tag Manager account.

As a “Track Type,” select “Page View,” since you want to track the actions of a visitor viewing pages on your website.

Google Tag Manager Scroll Tracking - Configuration Dialog
Tag Configuration dialog

This is all you need to do in the tag configuration screen! The only remaining step is to define a trigger for event to be sent to Google Analytics.

Then, configure your trigger

Google Tag Manager Scroll Tracking - Trigger Configuration
The trigger configuration window

When you click on the rectangular window at the bottom of the Tag Configuration screen, you’ll open the trigger configuration dialog screen. Here, you’ll be able to select a trigger type — this is the step which enables you to start tracking visitor scrolling.

If the “Scroll depth” trigger is not already listed among the available triggers, you’ll have to click the blue plus sign at the top right corner of the screen and find “Scroll depth” among the existing and predefined triggers.

Google Tag Manager Scroll Tracking - Available Triggers
The list of available triggers

To enable the scroll depth trigger, just click it. When you do this, Google Tag Manager will link it with the scrolling tag you’ve just created.

All that remains now is to configure the trigger in the way you want by clicking on the trigger.

How the trigger should look when you configure it properly
How the trigger should look when you configure it properly

Using the scroll depth trigger, you can track two types of scrolling — vertical and horizontal.

To track vertical scrolling, you’ll need to enable “Vertical Scroll Depths” by checking the checkbox next to it.

Enter thresholds you want to track
Enter thresholds you want to track

When you check the checkbox, you’ll see a field where you can enter the thresholds for the trigger to fire. Each threshold will fire a new event to your Google Analytics to report how far your visitor has scrolled.

You can use two types of depth metrics — percentages or pixels. Either way, just insert the numbers, and GTM will automatically take care of the rest.

Horizontal scrolling works the same way. However, you’re unlikely to need to enable horizontal scroll tracking. If your page requires visitors to scroll horizontally, then it’s already not very well optimized for all screen sizes.

When inserting percentages, try to identify the part of your webpage where the content ends. For example, many web pages contain a footer or a contact form or other elements that aren’t vital to the visitor’s understanding of the information on that page. Say your page content ends at 80% of the page length; there’s little point in tracking visitors beyond that point.

Using pixels as a metric is rare, because it’s tough to readily define thresholds when setting up this trigger. But if you know the pixel length of your page accurately, you can choose to use the pixel metric instead of percentage.

Finally, configure which pages your scroll depth tracking will track

In addition to configuring the trigger in other ways, you can limit the pages you’ll track.

For example, if you have a blog on your site, with posts that typically span multiple screens, you may want only to track those pages and leave out pages with only one screen (and thus no need for visitors to scroll).

To limit the pages on which Google Tag Manager will track scrolling, you can use the radio button at the bottom of the trigger configuration screen:

The trigger configuration dialog
Choose the pages you’d like to track using the radio buttons at the bottom of the Trigger Configuration dialog

If you select “All Pages,” the scroll depth tag will track scrolling on every page of your website. Selecting “Some Pages” will allow you to define what pages you want to track.

By limiting tracking only to the pages with content that spans more than one screen, you’ll lower your analytics load, reduce the number of events reported (Google Analytics starts sampling if a number of hits on one property exceeds 500,000 a month), and make it easier to make sense of all the data.

You can use either the name or part of the name of the page or path to it, or you can use RegEx and define which pages will be tracked.

When you configure everything in the way you want, you just need to name the tag, save it and preview it to make sure it works. Once you’re sure the tag is configured properly and it works, you can publish it to your property workspace.

Using scroll tracking in GA

When you’ve successfully set up tracking, you’ll receive new event reports in Google Analytics. You can find these in the Behavior subsection of Google Analytics.

A sample Google Analytics event report
A sample Google Analytics event report

As you can see when you open this report, the events are properly reported as Engagement and Interaction-category events.

The advantage of tracking scrolling as “events” is that you can use those events to establish goals, and mark interaction with your website — so when a visitor actually scrolls all the way to the bottom of the page and leaves, it won’t count as a bounce.

How to use scroll tracking as a goal

As with any other event, scroll depth tracking can be used as a goal for Google Analytics. By creating a goal based on scroll tracking, you can track how many visitors actually view the entire page.

As a form of conversion, scroll depth is useful if you maintain a blog and you expect and want visitors to read your posts (especially if you include some form of call to action at the bottom of each post).

Since this goal is not a destination goal, there is no way to create a funnel visualization. Nevertheless, you can still use multiple events for scroll depth tracking, with each tracking to a specific percentage depth. This way, it’s possible to create a funnel-like representation of visitor dropout on every specific page.

Scroll tracking can help you develop your content

It should be fairly obvious that the content which your users view to the end is your site’s most interesting content.

By observing top events with landing pages as a secondary dimension in Google Analytics, you can quickly determine which of your landing pages engage your visitors the most:

Report on top events, with “Landing Page” set as the secondary dimension
Report on top events, with “Landing Page” set as the secondary dimension

Sometimes a landing page will be popular in search, but in actuality, it may not be as successful in engaging your visitors. By tracking how deep your visitors scroll on a given landing page, you can determine what information those visitors want to see and adjust your content accordingly.

You can also determine which content is more engaging and performs better in terms of general visitor engagement, so you can provide more of it, restructure it, or rewrite it to contain more useful information.

For example, some blog posts might contain a paragraph or two that are particularly interesting to your customers, but most leave after reading it. In that case, you can try changing the structure and content of the post itself, or writing another one with more detailed information.

Scroll depth tracking also helps you discover if a landing page or any other page with a call to action contains potential distractions. If you notice that people leave the page after viewing it to a particular length, you can examine that part of the page for possible distractions.

And that’s not all. Scroll depth tracking can be used for many other things.

A few drawbacks of scroll tracking using GTM

The first drawback is that to accurately track scrolling, you’ll need to create multiple events. The total number will depend on the granularity of tracking you want to achieve.

Chances are that you’ll need to use at least 5 or 6 events, with triggers at every 15% or 20% of the page, to be able to accurately track scrolling.

The second drawback is the possibility that inserting events may result in an increase in “(not set)” values in your landing page reports. The problem of “(not set)” values can happen when the default session duration runs out, and then the user scrolls the page and triggers an event before the session has restarted.

The reason for this is that most people navigate the Internet and find content by running across interesting content on social media, opening it in a new tab, and then going on with their previous activities. They return to the original content later.

But if the session runs out in the meantime, Google Analytics will not be aware that the visitor has yet to view the content. When the visitor returns and starts to read, the first scroll event will send a hit to Google Analytics account and result in that hit being reported outside of a session.

The only way to reduce this issue is to increase your minimum session duration. While this may introduce a new set of problems, it will likely eliminate most of the “(not set)” values from your landing pages.

Aside from these minor drawbacks, tracking scrolling using Google Tag Manager and Google Analytics is incredibly beneficial. Since it doesn’t require technical proficiency if you already have a functional GTM account, you can implement it very quickly.

And while this scroll-tracking method will never replace the dedicated visualization tools mentioned earlier, it will enrich the data Google Analytics provides you, so you can reach new insights or confirm existing findings.

Google Tag Manager Scroll Tracking

Every ecommerce website contains at least a few pages of content longer than a single screen so visitors need to scroll. Google created new triggers and event types recently. Among these: the ability to track visitor scrolling using tags. It enables tracking of how far down the page visitors actually scroll.

Zero In On Your Best Content & Most Valuable Visitors Using the Google Analytics Cohort Report

Google Analytics Cohort Report

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

March 7, 2018

Cohort: More just than a group of Roman soldiers

Before we get into analyzing Google Analytics Cohort Report, let’s have a quick definition of what cohorts are and what they’re used for.

If you search “cohort,” the first definition you’ll see is “an ancient Roman military unit”.

Since you’re probably not concerned with the army structures of defunct empires, this isn’t the meaning you were looking for.

Cohort definition
Cohort definition

But just look at the second bullet under definition #2: “A group of people with a common statistical characteristic”.

Since web analysis is all about statistics, this is the definition we need. In fact, you can think of a “cohort” as just another name for a segment — since “segment” also denotes a group of observations sharing the same characteristic(s).

Need to understand segments better? Take a minute to read our article on segmentation in Google Analytics.

The anatomy of the Google Analytics Cohort Report — where to find it & what it can do

Cohort Reports can be found under the Audience Reports section of your Google Analytics dashboard.

Note the tiny “Beta” sign signaling that this feature is still in progress — so additional features could materialize within this report even as you read this post. Make no mistake, though, the beta feature is functional and provides accurate data.

In its present form, the Cohort Report shows the number of visitors acquired and retained over a given time period. Cohort analysis begins at the start date you select, and can range from one day to 12 weeks.

The report consists of two sections. One is a chart showing the time period on the Y axis, and number of visitors on the X axis.

The second part is a sheet, which shows the percentage of visitors retained within each day or week from the initial day or week.

Google Analytics Cohort Example Report
Google Analytics Cohort Example Report

The purpose of this report is to analyze visitor engagement based on the acquisition date of each group of customers. In other words, it should help you measure the number of visitors still coming back to your website after their initial acquisition.

Choosing a cohort type

The drop-down “cohort type” menu determines the primary criterion for sorting a cohort. For now, the only cohort type available is Acquisition Date.

As this feature develops, you can expect more Type criteria to be added — like “Transaction” or “Event”.

The “Cohort Type” selection box
The “Cohort Type” selection box

Acquisition tells you how interesting your website is to your customers. If a large proportion of your customers continues to be engaged with your site for a long period of time, it means that your website provides useful information and draws repeat visits. (Well done!)

However, if most of your customers are barely engaged over a period of time, this indicates that your website needs to increase the amount of engaging and new content it creates, and make better use of its traffic.

Engaged visitors convert better — so use cohort analysis to help determine what makes your visitors engage, and who the most engaged visitors are.

Choosing a cohort size

To better analyze your visitors’ behavior, you can select different sizes of cohorts you want to analyze. This enables you to observe the behavior of cohorts across days, weeks, or months.

The size of cohort you select should depend upon the intensity of your website activity. If you post new content every day, than you should observe the daily cohort — but if you publish new content on more of a weekly basis, look at weekly cohorts.

The cohort size selection box
The cohort size selection box

Choosing a metric

The cohort analysis default view uses retention as the primary metric to show the behavior of a given cohort.

However, you can select different metrics (such as conversions, revenue, session duration, or pageviews). To select a metric, ask yourself what visitor activity you want to analyze.

For example, by observing conversions, you can use cohorts to determine how long the average purchase cycle of your customers is.

The metric selection menu
The metric selection menu

Analyzing cohorts with metrics can improve your website in many ways. You can identify the days when it’s best to publish new content, or when to start product offers or deals. It can even help you formulate your own attribution model and analyze your acquisition strategy.

Choosing a date range

Use the date range menu to select the length of the period that your cohort reflects. The increments here will depend on the cohort size you chose.

If you decided to view your cohort by days, the time increments available in “Date Range” will be displayed in days. You can select up to 30 days; up to 12 weeks; or up to 12 months.

The date range helps you analyze cohort data with greater granularity (using days), and to analyze long-term retention and conversion (using weeks or even months).

The date range selection menu
The date range selection menu

Acquisition date selection

Another useful option in cohort analysis is the ability to select a particular date range for display in the chart. This option is very useful for comparing different cohorts.

Date selection can determine which day or week was most effective in retaining visitors. You can even match this data up with content published at that time, or other changes made to the site, to identify WHY that date range was more effective.

The cohort comparison chart
The cohort comparison chart

Cohort analytics sheet

The final part of the cohort analysis report is the sheet, which displays the total number of visitors and the percentage that returned to your site after being acquired.

This sheet provides a detailed and complete view of returning visitors:

The cohort sheet
The cohort sheet

As you can see from the example sheet above, deeper shades of blue represent the better-performing cohorts according to the metric selected (in this case, User Retention).

This means that more of the visitors from that particular cohort returned to the website within the given amount of time — ergo, they are more-engaged visitors.

Turn cohorts into segments for advanced analysis

Cohort analysis can be used to gain insights about your user engagement and retention, and to identify the reasons why users return to visit your website.

Using your defined cohort, you can create a specific segment of users. The cohort analytics screen makes this very easy to do. Just click on a cohort that seems interesting, and you’ll immediately create a segment.

In our previous example, we can see that the cohort of visitors from November 12 to November 18 had a higher retention rate than previous or subsequent weeks. By creating a segment of these visitors, we can determine what makes them different compared to other visitors.

Once you create this segment, you can check it against other reports in Google Analytics, such as:

  • Audience reports: See who these visitors are, and if they differ significantly from other visitors
  • Acquisition reports: See what channel these visitors came from, and if that channel is more effective in acquiring more engaged visitors
  • Behavior reports: See landing pages and all other pages to which these visitors navigated
  • Conversion reports: See if these visitors converted better than your average visitors

Let’s go through what to look for in each of those comparisons.

Find out who your cohort is by using Audience Reports

By analyzing audience reports on our sample site, we found out the following:

The segment we created from our November 12-18 cohort was more engaged overall than the average visitor, with a lower bounce rate, more pageviews, and longer sessions.

Audience Reports
Audience Reports

Most of the retained visitors used desktop computers to visit the site.

Google Analytics Cohort Report Example
Google Analytics Cohort Report Example

All of the most engaged visitors were males belonging to the 25-34 age group.

Google Analytics Cohort Report Age Group
Google Analytics Cohort Report Age Group

According to the In-Market Segment report, the selected cohort was predominantly comprised of people in Business Services, including Web Design and Advertising-related services.

In-Market Segment report
In-Market Segment report

These are just a few examples of the kinds of reports that can provide valuable insights and allow you to further improve and adapt your website to better match the audience it engages.

See how your cohorts arrived at your site by using Acquisition Reports

By using acquisition reports in conjunction with your cohort segment, you can see what the most effective channel is to acquire the most engaged audience — so you can double down on that channel.

An Acquisition Report overview
An Acquisition Report overview

In our example above, there is no significant difference between the cohort segment and all users, meriting no further deeper analysis using acquisition reports.

However, if you detect that there’s a significant difference, and one channel brings in far more engaged visitors, you can open up the Source/Medium Channel Report and do a detailed investigation.

Of course, before using the above reports, make sure you’ve properly configured your channel grouping.

See how your cohort navigated the site by using Behavior Reports

Using behavior reports, you can observe how your cohort segment navigated the website and what their most popular content was.

There are three reports in the Behavior section that are very useful for this purpose. The first is Landing Pages Reports (found under the Site Content subsection).

The Landing Pages Report
The Landing Pages Report

Using this report, you can figure out which of your landing pages were more popular with your engaged audience.

Once you know that, you can provide more content similar to that page, or promote more popular products to a similar audience using PPC. You can also use your mailing list to address similar prospects and offer them a popular product.

See how your cohort navigated your site using Behavior Flow

Behavior flow reports can’t be segmented, so you can’t compare the behavior of your cohort segment to the behavior of all your other users.

Regardless, you already know that these visitors are more engaged. By using the Behavior Flow report, you can identify the sequence of their navigation. That way, you can personalize your website or improve your promotional activities by pointing the visitors to more interesting content or products.

Behavior flow reports can’t be segmented, but they do show how your visitors progress through your website
Behavior flow reports can’t be segmented, but they do show how your visitors progress through your website

Discover whether your cohort converts well or not by using Conversion Reports

When used with your cohort segment, conversion reports can help reveal whether a more engaged cohort converts better, and how.

Depending on your website’s goal, you can analyze conversions made by a given cohort and identify the content most likely to engage that audience. You can also identify the most popular products.

The Conversion Report
The Conversion Report

Why Cohort Reports are superior to Audience Reports

Use cohorts to effectively segment your visitors and detect those who are most likely to make return visits and engage more with your website.

Although you can see return visitors using Analytics’ Audience Reports feature, cohorts offer you more granularity. Plus, you can use them to uncover visitor behavior even after significant events or changes to your website. For example, if you redesign your website, you can create a cohort to see how the change in design impacted visitors.

You can also, as we’ve seen, use cohorts to analyze how new content affects your visitors, and if you’re addressing the right visitors in the right way.

When analyzing cohorts, you need to take care of a few things first.

The first thing to do is to compare your cohort with the behavior of users over the same time period. For example, if you segment your cohort to a single week, compare that weeklong segment with all the visitors who browsed your website during another full week. Otherwise, the results may not be comparable.

As Cohort Reports are still being developed, you can expect Google to add more functionality and make the tool even more useful in the future.

Google Analytics Cohort Report

Cohort Reports can be found under the Audience Reports section of your Google Analytics dashboard. In its present form, the Cohort Report shows the number of visitors acquired and retained over a given time period. Cohort analysis begins at the start date you select, and can range from one day to 12 weeks.

Build Top-of-Funnel Content That Boosts Your Ecommerce Conversions

Ecommerce top of funnel content

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

March 1, 2018

Content marketing has become a vital part of every ecommerce website. But what exactly does “content marketing” include?

Content marketing is an information delivery system that serves three main functions:

  1. To grow your prospects’ knowledge of your product
  2. To increase their engagement with your website
  3. To boost your store’s SEO rank

At its most basic, content marketing means providing prospects with more than just the basic information on your products (AKA what’s typically found on product pages).

Your prospects need — nay, want! — more information. They want to know everything there is to know about your product.

Your aim in creating content should be to provide visitors with a reason to frequently visit your website, where they’ll find new and exciting blogs, videos, podcasts, products, you name it. The best way to bring users back is to identify their interests and create content that speaks to them.

However, not all content is equal — and not all of it serves the same purpose.

So how can you differentiate your content from competitors’ and make sure that each piece of content is doing its best work? Start by dividing your content by its location (or stage) in the purchase process.

Reassure & encourage prospects at the top of the funnel

On a typical ecommerce site, the purchase process is usually visualized and analyzed as a “funnel” of customer behavior. All prospects enter the purchase process at the top of the funnel.

The funnel’s purpose is to guide prospects through the purchase process by logically, sequentially presenting the steps necessary to buy. The prospect moves from adding a product to the cart, to customizing the product, to providing shipping and billing information, and finally to confirming the purchase.

To facilitate and encourage this process — and decrease the likelihood of the prospect abandoning their purchase halfway through — you need to provide constant reassurance.

Funnel entry is always marked by an event that constitutes a “macro conversion” (for example, adding a product to the cart). Not all prospects, and likely not even a majority, will proceed to the interim stages. Your funnel content should therefore aim to increase the number of prospects who reach the entry point of the funnel, AND who proceed to the next stage.

Ecommerce top of funnel content
Content at the top of the purchase funnel should aim to increase the percentage of visitors who enter and remain in the funnel

So what content will make visitors more likely to enter the funnel and move from the top to the middle? Generally speaking, most prospects at the top of the funnel are motivated to buy your product, and they’ve searched the web to find it (or a similar product).

Translating their existing motivation into a purchase depends on your ability to identify prospects’ needs, fears, and problems. By addressing these issues at the outset, you can significantly increase the likelihood that prospects will convert. You’ll also increase their engagement and persuade them to take micro-converting actions, such as subscribing to your newsletter, enabling notifications for your website, or even registering as members.

Understand your buyers’ mindset

Neuromarketing researchers have identified three basic types of buyer behavior, and categorized them by the propensity to spend money:

  1. Tightwads
  2. Spendthrifts
  3. Average spenders

Tightwads are extremely careful with their money to the point of not spending it at all. Spendthrifts are profligate buyers, best described as a store owner’s dream. And average spenders are just that: buyers who spend a moderate amount.

3 types of buyers
Source: Tightwads and Spendthrifts

These different types of buyers behave differently, which greatly influences the type of content they require to convert. The content you serve each buyer type needs to be tailor-made for them. It should alleviate their specific worries and prove that the product you offer is actually worth their money.

According to the aforementioned study, average buyers comprise 61% of all buyer types. Prior to purchasing an item, those buyers do a significant amount of research, and try to justify spending the money. While they are not burdened by the fear of “buyers remorse,” they still require sufficient reasons to spend their cash.

For most customers, the purchase process starts when they type a term in a search engine. Depending on your marketing spend, the uniqueness of your product or offer, and how well-known your website is, your store will hopefully display high enough on the search results pages to get customers to notice you. (For ecommerce websites, the search term will often be the name of a product or a product category.)

This makes your product and category pages prime landing page real estate, and the first contact point with the customer. As you’ll recall, product pages live at the very top of the purchase funnel. Usually, the prospect will add a product to the cart through a product page.

Having said this, your prospects may use a few other types of search terms to get to your website. They might state their problems, seek solutions, or look for answers to their questions. Each of these searches is an opportunity for your well-targeted SEO and ad campaigns to increase the likelihood that those prospects will end up on your website.

To illustrate what we mean, take a look at this search query. “How to set up a tent” gets us to a sporting goods ecommerce website:

Ecommerce top of funnel content-google - Google ad
A sporting goods website offers good advice on how to set up a tent… and sells tents, too

When we click through, we land on a page that offers more information directly related to our search query — AND a call to action that will bring us to a related product category page. Boom. There’s the purchase funnel entry.

Ecommerce top of funnel content - example shop with related gear CTA
Notice the “Shop related gear” CTA on the right sidebar

Here’s another example: a query about freeze motion photography brings up a number of results. One of these results is B&H Photo Video, which has a podcast about making freeze motion photography (using one of the products they sell).

Ecommerce top of funnel content - a search result for “freeze motion photography
A search result for “freeze motion photography”

Here’s the landing page to which that search result connects. Notice the emphasis on the Profoto D2, a product that B&H Photo Video sells.

Ecommerce top of funnel content - In addition to listening to the educational podcast, you can buy the equipment
In addition to listening to the educational podcast, you can buy the equipment.

These examples illustrate just two of the numerous ways you can get your products on the map — even without customers searching for the products directly.

In fact, by positioning your products as a solution to your prospects’ problems, you increase the likelihood that they’ll actually convert. This is especially true if you offer relevant, helpful advice on how exactly to use the product.

So it stands to reason that one of the best ways to engage customers at the top of the funnel is to publish a blog or video post, like we saw in the ads above. Content like this immediately links the product to either 1) a customer’s problems, 2) a customer’s life situation, or 3) a customer’s needs.

When prospects are researching products prior to buying, this type of content can greatly help them to compare your product to your competition’s and decide which is right for them.

Informative, educational content may be exactly the type of content that the “tightwad” buyer archetype needs to justify spending money. They’re likely searching for solutions to the problems, and their main aim is to reassure themselves that your product will address their needs.

Types of content that support conversion

Research

Usually, prospects do research prior to purchasing. In fact, studies show that 82% of all customers do online research prior to purchase. This number corresponds with the proportion of “tightwads,” “spendthrifts,” and “average spender” figures.

If we take it that “spendthrifts” comprise 15% of all customers, that means that roughly two percent of other buyers don’t do any research prior to purchase (most likely, these customers belong to the “average” group).

Spendthrifts will buy whatever they find given the slightest nudge — and their research, if any, will mostly concern actually locating the product. That means that when you create content for shoppers who do research, you should mostly be concentrating on average shoppers and tightwads. Given that tightwads are most concerned and research-oriented group, obviously, they will be the toughest sell.

According to research conducted by the Nielsen Norman Group, 60% of customers shopping for consumer electronics searched for more information on the product. Fifty-two percent compared prices and 34% sought for deals and coupons.

In the category of beauty and cosmetics products, 54% were looking for more product info, 44% compared prices, and 35% looked for coupons, promotions, or deals.

The content you create for the research phase of the purchase process should familiarize prospects with your brand, your products, and the problems you solve.

Let’s talk about what types of content serve this purpose, and examine how to create research-friendly content for ecommerce stores. If you provide adequate content for this stage in purchase process, it will increase the chances that your prospects advance to conversion.

The best types of content for this research-intensive stage are:

Blogs

The amount of product information that can fit into a blog post is huge. A blog post can be structured to provide not only basic information and product specifications, but to…

  • Present use cases
  • Provide detailed information on product development (when applicable)
  • Point out less obvious functions of the product

If your store sells a limited number of products, or limits itself to several distinct product categories, writing blog posts makes perfect sense.

Along with providing information on your products, blog posts can foster a connection between the prospect and your brand or site.

For example, Patagonia’s blog posts do not directly promote their products. Instead, they provide stories about things their target audience cares about.

Ecommerce top of funnel content - Patagonia
Patagonia’s blog The Cleanest Line usually presents subjects their audience cares about

Tightwads can find this type of content sufficiently incentivizing to tip them over to your side and convert them. If you write relevant blogs that show them you care about the same things they do, and your product really solves their problem or helps them in some way, you’ll go a long way toward alleviating their fears and worries.

“Purchase pain” or “pain of buying” is a psychological phenomenon that causes a consumer to stop and abandon the process of purchase in anticipation of possible buyer’s remorse. Tightwads experience an extreme variant of the pain of buying, and are thus very reluctant to part with their money.

Cost isn’t the only variable that causes “pain” — it’s really the perceived fairness or unfairness of the deal that creates the reaction. Other parts of an offer that caused it to appear unfair would presumably cause a similar reaction as a too-high price. – Neuromarketing Science

Plus, good blog posts can serve as a traffic acquisition tool and improve the SEO ranking of your ecommerce site.

“About” pages

For most ecommerce stores, About pages are usually viewed as a necessary evil. They serve a perfunctory role, giving the company name, address, and support info.

But if you approach your About page this way, you’ll miss an excellent opportunity to influence your customers and improve conversions. Your About page should convey the story of your company and set the tone for other interactions between prospects and your store.

Your About page should highlight the people who work with or for your store. It should include graphics or photos to help connect visitors with your brand, and provide up-to-date information that you feel your customers should know. Here’s what else a well-rounded ecommerce About page should include.

Product videos, how-to guides, FAQ pages

Need to promote a specific product or product feature? Blog posts can feel a bit too generic and unfocused.

Instead of writing a blog, prove to your prospects that your product solves their issues and then some by creating product videos, how-to guides, and FAQs.

The point is to tell a story, be honest and transparent, and entice prospects to buy the product. How-to guides can be useful to explain the process of using the product, especially if it’s complicated or involves multiple steps. A good example of this type of content is the “How to set up a tent” article example from earlier.

FAQ pages for a product can help customers solve common issues. However, if there are many FAQs about a product or feature that should be easy to use, you should consider updating your manual to make it more clear.

An FAQ section done right can be an effective addition to your website that serves several functions, from:

  • Alleviating purchasing anxieties that your product page copy doesn’t directly address.
  • Relieving some of the burden on customer support by publicly answering common questions.
  • Improving SEO and site navigation.
  • Earning trust by demonstrating product expertise and explaining your business model.
  • Delighting customers by creatively answering their questions.

Customer testimonials or case studies (if applicable)

If the product(s) you sell can be showcased by your customers in an honest and spontaneous setting, you can use testimonials or user reviews to your advantage.

When customers enter the top of the funnel, they’ll seek confirmation that the product they’re researching will actually work for them (solving their issue or benefiting them in some way). The best way to demonstrate or prove it is to present a peer opinion, review, or showcase by people similar to those customers.

Compare your product with others

Comparison is one of the inevitable phases of research. As we’ve seen, over 40% of customers compare products during their research.

The best way to improve their chances of conversion is to help customers compare your products.

Make it easy to access product specs, shipping information, price calculation, and answers to any other questions your customer may have. Try to be proactive. Conduct user research using surveys to find out the questions that aren’t being answered by your existing content.

Both tightwads and average customer groups will appreciate the effort you expend to be transparent and honest.

So unless you have a monopoly, and most likely you don’t, your customers are faced with a tremendously difficult choice.

Many customers don’t care too much about getting the perfect product and simply roll with the first one that feels right. But there is a big group of picky customers that will want to make sure they are making the best choice. These are the people that will ask you: “Of all the suppliers out there, why would I choose you?”, or “What are you doing better than X?”, etc.

However, the supplier that this customers finally chooses is not typically the optimal solution. No, it’s the supplier that answered this question clearly. – Userlike

In addition, you might want to check the websites of your direct competitors to devise a marketing pitch that’s clearer and more relevant than theirs. You can also update the format in which you provide your product specifications to make comparison easier (try presenting information in bullet points instead of paragraphs, for example).

Finally, if a customer does not convert, there are two more things you can get from them that don’t require a “macro” conversion. Even if they drop out of the conversion funnel prior to purchase, you can still get a micro-conversion in the form of lead collection.

Collecting leads

As a prospect reaches your website, start tracking their behavior. Observe as they progress through various stages of your conversion funnel. Using tools like Google Analytics or Kissmetrics, you can find out what type(s) of content the prospect consumed and show them a relevant call-to-action to capture their contact information.

This micro-conversion creates a commitment on the prospect’s part, and enables you to enhance your impact through directly sending that prospect content via a newsletter, email series, a call, or another form of direct communication.

Even better than getting a lead and creating that bigger commitment? Getting a prospect to register as a member on the site.

Encouraging registration

If you offer membership on your site, you should try to get prospects to register and create an account. For example, if a prospect shows interest in a particular product (say they frequently view the product, spend a lot of time reading about it, view a video, or download documentation) you can invite them to set up an account and add that product to their wishlist or notifications list.

If a prospect takes this step, they’ll be more likely to purchase that product in the future.

Custom content should inform your buyer personas

Getting customers to proceed from the top to the middle of the funnel is frequently the most challenging obstacle for ecommerce stores. Of all the prospects who abandon the cart or the funnel, nearly 60% of them drop out at the initial step. The reasons for abandonment are various, and the stats show that many prospects were simply not ready to buy yet.

You can leverage different types of content to guide your prospects and help them overcome any reluctance they may have about your products.

Bear in mind that sometimes, all the effort in the world won’t convince some tightwads to open their wallets and spend money. But your content should still aim to give prospects enough information and point out your product’s benefits in order to overcome all but the most extreme pain of buying.

Using buyer traits as a part of your persona models is a smart move, since this enables you to lead customers of a particular group to customized content. The more you customize and add detail (based in real data, of course) to your personas, the more you can personalize your message to each prospect.

Of course, not every ecommerce store can publish product blogs or videos. If you sell thousands of products, you will likely be hard-pressed to choose which products to promote. But you can still make an effort to connect to your prospects and offer them content that allows them to identify with your store.

Ecommerce top of funnel content

On a typical ecommerce site, the purchase process is usually visualized and analyzed as a “funnel” of customer behavior. All prospects enter the purchase process at the top of the funnel. Funnel entry is always marked by an event that constitutes a “macro conversion” (for example, adding a product to the cart). Not all prospects, and likely not even a majority, will proceed to the next step. Your funnel content should therefore aim to increase the number of prospects who reach the entry point of the funnel, AND who proceed to the next step.

Optimize Your Website For Growing Customer Lifetime Value

Optimize customer lifetime value

Published by

Edin is a Senior CRO Consultant. Edin is into Google Analytics and testing (any A/B testing tool really) and likes to write about it. You can follow Edin on Twitter.

February 14, 2018

What is customer lifetime value (CLV), and why is it so important?

CLV is a predictive metric that attempts to estimate the amount of revenue a single customer contributes to an ecommerce (or other revenue-generating) website during the course of that customer’s relationship with the website.

It’s used to guide stores’ efforts in customer and traffic acquisition by showing how much an additional customer is worth in concrete financial terms. When you know how much a customer is worth, it sheds new light on the process of acquisition — and can reveal when acquisition is simply too expensive to be sustainable.

Generally, acquisition accounts for a cost per visitor for each channel. CLV enables you to add an additional criterion to this calculation: the actual ROI of that channel. Knowing how much each additional customer contributes to the gross revenue and net profit of your store, you can assign more value to particular channels and justify a higher acquisition expenditure in some cases.

CLV can also predict your site’s future cash flow, so you can estimate its value to you and other stakeholders. This is especially helpful when looking for new capital investments to expand the business.

How to calculate your most useful CLV

Measuring CLV is a simple exercise: take your average order value, multiply it by number of transactions, multiply that by the number of customers and the time period for which you’re calculating.

Then, multiply the resulting number by your average gross margin. The end figure shows the share in profit that can be attributed to a single customer.

Customer lifetime value formula
Customer lifetime value formula

The formula above discounts the future value of the CLV to its present value, accounting for time value of money. When you calculate the CLV for past periods, you can omit this part.

While the math itself is rather basic, there are a few intricacies that, when applied, can make your CLV data so much more useful. For example, by segmenting customers, you can derive different CLVs that will show you how much each segment of your customers actually contributes to your website.

Customer lifetime value - Google Analytics report
Here is an example of a CLV report in Google Analytics.

As you can see from this example, this report is segmented in the most useful manner: by acquisition channels. That way, you can quickly discover which channel is most effective, and act appropriately.

In our example above, the Referral channel brings in the best customers with the highest average CLV. Since the referral channel has such a good performance, it means that this channel should be treated preferentially when we consider further increases to the acquisition budget.

However, there is a definite point where the law of diminishing returns kicks in and ROI starts dropping. Before this happens, in order to increase the likelihood that your CLV won’t drop too, you should start researching the customers who reach your website through the best-performing channel. For more on CLV reports in Google Analytics read our in-depth post.

Segment them. Observe their behavior and try to find out more about them. The primary aim of this research is to discover alternative acquisition channels for these customers. By acquiring them through alternative channels and at a lower cost, you can further improve your ROI.

That’s not to say the cost of acquisition is the sole metric you need to consider. The idea is to regard each customer as an asset for your website. Assets, in addition to their acquisition cost, require maintenance to continue providing benefits.

All the effort and investment you put into a customer from acquisition on should build toward a singular purpose: increasing that customer’s value of the customer and setting the stage for future benefits.

Before you sell…

Of course, before you can even think about selling to customers, you must ensure the product you offer is attractive enough. By that, we mean that the products you offer are high-quality, your website is attractive and easy to use, and your product copy is convincing.

These conditions should be your first priority. Only products that solve problems for customers and give them tangible benefits can ensure the long-term survival of your store. Once you’re secure in what you sell, you can start thinking about improving customer lifetime value.

As we’ve covered, getting someone to buy again is much easier than getting a new buyer, not to mention that repeat customers tend to spend more. And once you’ve got those repeat customers, you need to develop a well-thought-out strategy for increasing CLV.

Below are some ways we’ve been helping our clients grow their CLV. They might serve your ecommerce store well, too.

Improve CLV at every point in the purchase funnel

It’s about much more than conversion

Let’s get one thing out of the way: if you focus solely on improving conversion, and spend all of your effort just to get a customer to buy, it’s like having a one-night stand with that customer.

While one-night stands can be nice for both parties, what you’re really looking for is a stable relationship that will last. However, to turn a one-night stand into a relationship, constant effort is required — and the same is true of that first customer conversion.

The entire pre-and-post conversion process can be neatly summed up by the following image:

Customer lifetime value - entire pre-and-post conversion process
Customer lifetime value – entire pre-and-post conversion process

Even though it’s easier to get a once-converted customer to return to purchase more, don’t assume you can stop communicating with that customer.

After all, you probably know what they like, where they come from, to which marketing channel you can attribute their conversion, and what content or combination of content caused them to convert… and that’s valuable knowledge that you need to put to use.

Get in touch right after the purchase

The best practice immediately following a customer purchase is something that should go without saying, but just in case, we’ll say it:

You need to ensure that a customer who purchased a product receives it in the form they saw it on the website, on time, and undamaged. Only when you ensure the customer is completely satisfied with your service the first time around will you have a chance at a repeat purchase.

If a slip-up happens and the customer receives a faulty delivery, you should make every effort to limit the damage. Offer a replacement product or refund, provide free return or exchange shipping — whatever makes the customer happy and doesn’t destroy your bottom line. The way you handle customer-facing problems is critical because it can influence the entire image of your company.

Although there are people who will complain about everything, always treat every complaint with respect. HelpScout has this advice for dealing with customers who are truly lost causes:

“Winning customers back with exceptional service is fundamental, but when people already have one foot out the door, you’re better off letting the parting be as frictionless as possible. Learn what you can, see if there is a way to resolve the issue, and accept the outcome if there isn’t.”

Remember that the absence of a complaint is not necessarily a sign that all is good. The second step is communicating directly with the customer. Send them a thank-you email, and try to make it feel personal, using what you know about that customer.

Your thank-you note can also contain product placement, especially upsell and cross-sell options for the product they just bought. If the product requires a resupply or a refill (for example, printer ink cartridges or batteries), offer those too.

MarketingLand points out that in fact, there are many ripe opportunities in post-purchase emails:

“Smart businesses know the powerful opportunity presented by emails sent to buyers after they’ve completed a transaction — from the order confirmation to processing status updates and the shipping notification.”

Streamline your registration process

Inviting customers to opt-in, register, or create a membership with your store increases the potential for future engagement. You can entice customers to register by offering various benefits, such as discounts, free shipping on higher-value purchases, or loyalty programs (we will tackle those in detail later on).

Plus, registering customers means you have a way to identify them, track their activities, and better personalize your store’s interactions with them. Creating a custom registration process is largely unnecessary, since most social networks enable you to use customers’ identities on those networks to log into your website. These “social logins” may not offer all the advantages of creating your store’s own managed accounts, but they reduce friction for customers and enable hassle-free login — both of which are good news for conversion.

ConversionXL points out that social login can also facilitate better retargeting:

“Social login in combination with social ad solutions like Facebook custom audiences, Facebook Retargeting & Interest targeting allow you to deliver more personalized experiences over the social networks.”

Even though using a social login removes your ability to track customer behavior more directly, it’s still much better than not knowing who customers are at all. And once you offer a social login option, you can then use social networks to target similar users and send them relevant offers and content.

Build truly valuable loyalty program

Once a customer becomes a registered user, you can engage them further. One method long recognized and used (which hasn’t lost any of its effectiveness) is the “loyalty program”.

Loyalty programs come in many forms, but their underlying basis is the same. Each time a customer converts, they receive a token of some kind. After accumulating tokens over a period of time, customers can use them to receive benefits.

Nordstrom’s loyalty program is a good example. In addition to regular points that customers can collect by buying, Nordstrom offers bonuses on certain days. See the “Earn Triple Points” banner on the store’s site below:

Nordstrom’s loyalty program
Nordstrom’s loyalty program

Another shop that began featuring a loyalty program and saw a twofold increase in conversions is Nancy’s Floral. They introduced a program that rewards customers with points that can be used as credit for their future orders.

Loyalty program used by Nancy’s Floral
Loyalty program used by Nancy’s Floral

Other loyalty programs are based on different achievements or milestones, like number of total orders, or different types of products bought. Some of them are not tied to the purchase process at all, but rather to entice customers to provide reviews. The best example of this style of loyalty program is Amazon, which sends customers an email asking for a review of the item(s) they purchased.

Once a customer writes a review, Amazon keeps track of the number of times that review is read. It also allows other customers to rate reviews for helpfulness. This rating provides customers who review products with a sense of achievement; meanwhile, Amazon derives valuable information about the product and can display ample social proof for other prospects.

Consider creating a community around your products

Community-based selling is another way to engage customers post-purchase. By making visitors feel like a part of a like-minded group of people, and offering them a place to converse, you can increase engagement with your website.

Members of a community generally share the same values and can help shepherd others toward more purchases. Besides, communities make for great opportunities to communicate with the customers and prospects.

By creating a community, Beardbrand gained ideas for blog posts on beard grooming, reviews and opinions of their products, and other content interesting to their current and potential customers. Their community spans social networks like Instagram, Twitter, and Facebook, and helps spread the word to other prospects looking for beard care products.

Beardbrand’s community page
Beardbrand’s community page

A community like this can help new prospects connect with existing customers and find out more about possible solutions to their problems. The presence of both a prospect’s peers and experts from your company can ease their search for solutions, and help your website be seen clearly as providing the best solution.

Additionally, customers who become part of a community tend to develop feelings of personal achievement, especially if they establish themselves as trusted and helpful members. This provides additional incentive for customers to stay engaged, and both prolongs the relationship between your store and customer and increases their average spend and CLV.

Creating a community is the perfect idea for stores that sell niche or specific products that appeal to a relatively limited group of people. Your community can become a gathering spot where they share their joint interests.

Optimize your upsells and cross-sells

Upselling and cross-selling is a way to engage customers post-purchase by offering them items that upgrade the functionality of, or complement, the item they just bought.

These marketing approaches help your store make use of the customer’s existing momentum and motivation to entice them to spend more. Often, upsell and cross-sell offers are made at a lowered price or with other special benefits.

The best examples of upsell and cross-sell offers can be seen at stores that sell electronics, like computers, TVs, and mobile phones. For example, if you buy a laptop online, you’ll enter a process of configuring the device. During that process, the store may try to sell you upgrades to the memory, hard disk drive or processor. Once you complete the configuration and purchase your item, you may be offered complimentary items such as backpacks, software packages, or other items.

For example, Best Buy below offers an upsell in the form of an additional warranty, a backpack, a mouse, or a printer. The customer can also choose to buy an external DVD drive, since the device does not include one.

Customer lifetime value - Bestbuy upsells & cross-sells
Customer lifetime value – Bestbuy upsells & cross-sells
Customer lifetime value - Bestbuy upsells & cross-sells
Customer lifetime value – Bestbuy upsells & cross-sells

Optimizing your upsell and cross-sell offers means hitting the right balance between the additional increase in price and the promised increase in functionality of the product your customers are buying.

Notice how Best Buy above offers an external DVD drive for just under $40, or a Microsoft Office software package for half the price a customer would otherwise pay for it. Offering these items at the moment when the customer is buying a big-ticket item like a laptop increases the likelihood that the customer will say “Why not?”, buy those additional items, and increase their average order value.

Upsell and cross-sell opportunities need not end at the moment of purchase, as you might remember from our discussion of post-purchase emails above. For example, a software company might send an email offering an upgrade (at a lower price than normal) to the piece of software a customer owns.

This strategy is frequently applied to registered users, as knowing which customers respond to which offers allows stores to gather additional data to inform their marketing efforts.

Get started with the right data

Optimizing to increase your CLV is the best way to ensure your ecommerce store’s constant growth. It means that not only can you rely on existing customers to contribute more of your store’s revenue, but you can effectively market to a wide segment of similar prospects by knowing what your existing customers like and prefer.

While CLV is a predictive metric, you can use it as a good indicator of how much an actual customer will spend. By segmenting and matching customers, this metric gets greater accuracy and reliability.

Even if you are just starting your business, beginning to track visitors and estimate your CLV is vital. While an average CLV can be hard to calculate if you have no customers or a very small pool of them, you can still derive useful knowledge from the way they interact with the site.

To get started, structure your goals using analytical tools like Google Analytics and its goals and funnels function.

Optimize customer lifetime value

Customer lifetime value is used to guide efforts in customer and traffic acquisition by showing how much an additional customer is worth in financial terms. When you know how much a customer is worth, it sheds new light on acquisition — and can reveal when acquisition is simply too expensive to be sustainable.