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Conversion Report 2010
In association with RedEye SAMPLE ONLY. Please download the full report from:
http://econsultancy.com/reports/conversion-report
Conversion Report 2010
Econsultancy London
4th Floor, The Corner
91-93 Farringdon Road
London EC1M 3LN
United Kingdom
Telephone:
+44 (0)20 7269 1450
http://econsultancy.com
Econsultancy New York
41 East 11th St., 11th Floor
New York, NY 10003
United States
Telephone:
+1 212 699 3626
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reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopy, recording
or any information storage and retrieval system, without
prior permission in writing from the publisher.
Copyright © Econsultancy.com Ltd 2010
Published October 2010
Conversion Report 2010 In association with RedEye
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage
and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2010
Contents
1. Executive Summary and Highlights ................................ 1
1.1. Key findings: ................................................................................. 1
2. Introduction by RedEye ................................................... 3
2.1. About RedEye .............................................................................. 4
2.2. About Econsultancy .................................................................... 4
3. Methodology and sample ................................................. 5
3.1. Methodology ................................................................................ 5
3.2. Respondent profiles .................................................................... 5
3.2.1. Annual company turnover ............................................................................. 6
3.2.2. Business sector ............................................................................................... 7
3.2.3. Geography ...................................................................................................... 8
4. Findings ........................................................................... 9
4.1. Types of conversion and measurement ...................................... 9
4.1.1. Conversions relevant to organisation ........................................................... 9
4.1.2. Types of conversion rates measured ........................................................... 13
4.1.3. Methods used to measure conversion......................................................... 17
4.1.4. Satisfaction with online conversion rates .................................................. 20
4.1.5. Improvement in online conversion rates in the last year .......................... 22
4.2. Tools and strategies ................................................................... 24
4.2.1. Methods currently used for improving conversion rates ........................... 24
4.2.2. Methods planned for improving conversion rates ..................................... 28
4.2.3. Value of methods used for improving conversion rates ............................ 32
4.2.4. Cart abandonment ....................................................................................... 36
4.2.5. Impact of technologies on conversion rates ............................................... 42
4.3. Best practice .............................................................................. 46
4.3.1. Best practices carried out by organisations ................................................ 46
4.3.2. Most effective technique for improving conversion rates ......................... 50
4.4. Testing ....................................................................................... 52
4.4.1. Areas of testing ............................................................................................. 52
4.4.2. Levels of testing ............................................................................................ 54
4.4.3. Tools and services used to test websites ..................................................... 56
4.4.4. Elements of websites tested......................................................................... 58
4.4.5. Number of tests carried out on website per month .................................. 60
4.4.6. Measuring the effectiveness of changes made to website .......................... 62
4.4.7. Elements of email marketing tested ........................................................... 66
4.4.8. Number of email marketing tests carried out per month ..........................68
4.4.9. Tools and services used to test email .......................................................... 70
Conversion Report 2010 In association with RedEye
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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2010
4.5. Segmentation ............................................................................. 72
4.5.1. Ways of segmenting site visitors and customers ........................................ 72
4.5.2. Types of transactional segmentation carried out ....................................... 74
4.5.3. Types of behavioural segmentation carried out ......................................... 77
4.5.4. Types of media interaction segmentation carried out .............................. 80
4.5.5. Number of different segments .................................................................... 83
4.5.6. Uses of segmentation ................................................................................... 85
4.6. People and processes ................................................................. 89
4.6.1. Number of staff responsible for improving conversion rates ....................89
4.6.2. Personal involvement in improving conversion rates .............................. 90
4.6.3. Perceived control over conversion rates ..................................................... 91
4.6.4. Incentives based on conversion rates ......................................................... 95
4.6.5. Approach to improving conversion rates ................................................... 97
4.6.6. Barriers to improving conversion rates ...................................................... 99
4.6.7. What would make the biggest difference to conversion rates? ............... 102
5. How to improve the conversion process: a four-stage plan ............................................................................... 105
5.1. Stage 1: Analyse ....................................................................... 106
5.2. Stage 2: Test ............................................................................ 108
5.3. Stage 3: Optimise .................................................................... 109
5.4. Stage 4: Measurement .............................................................. 113
Conversion Report 2010 Page 1
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1. Executive Summary and Highlights This is Econsultancy‟s second Conversion Report, carried out in association with RedEye.
The research is based on a survey of more than 700 client-side and agency digital marketers
carried out in August and September 2010.
The study looks at the types of conversion and measurement used, as well as tools, strategies and
processes employed for improving conversion rates. The report also examines different areas of
best practice and identifies which techniques and methods are most valuable for improving
conversion rates.
The aim is to provide data and a framework to help companies invest their time and resources as
effectively as possible, by examining which methods and processes are most likely to yield results.
The report includes RedEye‟s four-stage plan for improving the conversion process.
1.1. Key findings: Since last year, there has been a slight decrease in the proportion of companies that are “quite
dissatisfied” or “very dissatisfied” with their conversion rates – from 39% to 36%. However,
only 26% are “quite satisfied” and not one company reported being “very satisfied”.
As was the case for last year‟s survey, 70% of companies said they have seen an improvement
in conversion rates over the last 12 months.
There has been a significant increase in the use of A/B testing, with almost half of
companies surveyed (44%) now using this method.
The more ways used to improve conversion the better. Survey respondents whose conversion
had improved over the previous 12 months used nearly one and a half times more
methods to improve conversion than those whose conversion had not improved.
More than a third of companies surveyed (34%) do not test multiple landing pages.
However, the proportion of companies “doing this well” has increased by 8% since 2009.
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2. Introduction by RedEye RedEye is delighted to sponsor this second Econsultancy RedEye Conversion Report and would
like to thank all the survey participants. The overwhelming response to the survey clearly reflects
the growing importance of website conversion to businesses operating online.
Why is conversion important? According to ZenithOptimedia $56.8 billion will be spent this year
on generating traffic, but only 2 to 3% of visitors will actually convert. Clearly there is a lot of
headroom in improving conversion which is a major opportunity for online marketers.
So why are conversion rates not better than they are? Our experience is that this is because
improving conversion is complex. This is why we have sponsored this research to help improve
industry best practice and make it easier for all digital marketers (including ourselves!) to get
better results.
Coming from the perspective of a business that works with clients to improve their website
conversion, the results reinforce a number of the practical trends we see on a day-to-day basis:
If improving website conversion was easy everyone would be doing it! It involves many
different technologies, analytical methods and skills.
Improving conversion is like eating the proverbial elephant. You cannot do it in one go; you
need to break it down into specific parts. There are many methods and prioritising those
methods is important.
Many successful techniques such as testing and segmentation are grounded in direct
marketing practices which have been applied successfully offline for many years.
Improving conversion is a continuous process. There is no magic bullet.
Looking around the industry you could be forgiven for thinking that improving conversion was
simply a matter of buying the latest technology. As practitioners we know this is simply not true.
Improving conversion requires both technology and people. It is what you do with the technology
that really counts.
Having a structured approach to conversion was one of the most predictive variables for website
conversion success. A staggering 89% of survey respondents who had a structured approach to
improving conversion had seen improved conversion rates in the last 12 months. For this reason
we have included a white paper we recently wrote on how to develop a structured approach to
improving website conversion. Also, companies‟ lack of resources is cited in the report as the
biggest barrier to improving conversion. The white paper will show how you can prioritise scarce
resources to get the best results for your money.
I hope this report helps you improve your online marketing. Enjoy!
Mark Patron, CEO, RedEye
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2.1. About RedEye RedEye provides an integrated service of web analytics, email marketing and usability. Our
services help clients understand their customers, and target and communicate with them more
effectively in order to improve conversion.
RedEye is the leader in behavioural email. Behavioural email integrates web analytics data with
email marketing to send relevant and targeted email campaigns based on a user's individual
online browsing behaviour. Sending targeted email campaigns based on site behaviour and
personalising from data can drive a 30-40% increase in response and conversion. Our
behavioural email campaigns typically generate at least a 750% ROI.
RedEye‟s data warehouse and web analytics tools are the most accurate possible enabling an
extremely in-depth analysis of user behaviour. This includes the ability to look beyond the last
click and analyse the full customer journey. This enables companies to precisely attribute media
spend leading to effective media planning.
RedEye‟s usability services help answer crucial questions of why users behave in a certain way (eg.
failure to complete a purchase). Pinpointing these problems allows clients to make the necessary
changes needed to improve user experience and ultimately improve conversion.
At RedEye we pride ourselves on having an extensive and highly specialised team who work on a
strategic, tactical and administrative level to help clients get the most from their online
opportunities.
RedEye was established in 1997. In 2005 the company bought e-relationship marketing Ltd, „e-
rm‟, and began the drive towards integrating email and web analytics in order to increase the
return on investment for customers. Capabilities grew and in 2006 a unique behavioural email
marketing solution became available. During this time optimum.web Ltd also became part of
RedEye, expanding RedEye‟s services to website usability. RedEye now helps many online
companies improve conversion. Clients include Monarch Airlines, Interflora, Butlins and
Sainsbury‟s Bank.
To find out more about RedEye visit www.redeye.com
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2.2. About Econsultancy Econsultancy is a digital publishing and training group that is used by more than 200,000
internet professionals every month.
The company publishes practical and timesaving research to help marketers make better
decisions about the digital environment, build business cases, find the best suppliers, look smart
in meetings and accelerate their careers.
Econsultancy has offices in New York and London, and hosts more than 100 events every year in
the US and UK. Many of the world's most famous brands use Econsultancy to educate and
train their staff. Some of Econsultancy‟s members include: Google, Yahoo, Dell, BBC, BT, Shell,
Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.
Join Econsultancy today to learn what‟s happening in digital marketing – and what works. Call us
to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can
also contact us online.
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3. Methodology and sample
3.1. Methodology This is Econsultancy‟s second Conversion Report carried out in association with RedEye. There
were more than 700 respondents to our research request, which took the form of an online
survey1 in August and September 2010.
Respondents included both client-side (in-house) organisations who want to improve their
conversion rates, and agencies, vendors or consultancies (supply-side) who are involved in trying
to improve conversion rates for their clients.
The findings are shown for client-side (i.e. „company respondents‟) and supply-side („agency
respondents‟) separately.
Information about the survey, including the link, was emailed to Econsultancy‟s user base and
promoted online via Twitter and other channels. The incentive for taking part was access to a free
copy of this report just before its publication on the Econsultancy website.
If you have any questions about the research, please email Econsultancy‟s Research Director,
Linus Gregoriadis ([email protected]).
3.2. Respondent profiles More than half (55%) of survey respondents work for client-side organisations that are trying to
improve conversion rates, whilst 41% work for agencies, vendors or specialist consultancies.
Figure 1: Which of the following best describes your job role?
Response: 702
1 Econsultancy uses Clicktools for its online surveys
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3.2.1. Annual company turnover
There is a good representation of organisations across the full spectrum of company size. Just
under a fifth of companies (19%) have an annual turnover of less than £1m, whilst over a quarter
of respondents (28%) have revenues of between £1m and £10m.
Over half of companies surveyed (53%) have a turnover of more than £10m, and 27% of
respondents are earning more than £150m annually.
Companies
Figure 2: What is your annual company turnover (revenue)?
Response: 278
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3.2.2. Business sector
Client-side respondents come from a wide range of sectors, with retail (24%), financial services
(12%), publishing (11%) and travel (10%) being the best represented.
Figure 3: In which business sector is your organisation?
Response: 281
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3.2.3. Geography
The majority of companies surveyed (70%) are UK-based, whilst most of the remaining ones are
based in mainland Europe (12%) and North America (8%).
Companies
Figure 4: In which country/region are you (personally) based?
Response: 281
Just over half of agencies (55%) are based in the UK, whilst 17% are from Europe and 13% are
from North America .
Agencies
Figure 5: In which country/region are you (personally) based?
Response: 206
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4. Findings
4.1. Types of conversion and measurement
4.1.1. Conversions relevant to organisation
The chart below shows that the most widespread types of conversion are sales (85%) and sign-ups
/ registrations (69%). Significantly more companies than last year (+12%) consider sales to be a
more relevant conversion type.
Companies
Figure 6: What types of conversions or actions are relevant to your organisation?
Response: 352
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4.1.2. Types of conversion rates measured
Nearly three quarters of companies (71%) measure overall site conversion to sale, while more
than half of respondents (54%) measure overall site conversion to response. There has been a
significant increase in the proportion of companies measuring basket conversion rate, from 35%
in 2009 to 42% this year.
4.1.3.
4.1.4. Methods used to measure conversion
The table below summarises the different methods used to measure conversion, while Figure 15
shows the extent to which they are used by company respondents.
Methods used to measure conversion
Method used Formula
Sales as a proportion of overall visits Number of sales / (divided by) visits
Key actions as a proportion of overall visits Number of key actions / visits
Sales as a proportion of leads Sales / leads
Sales as a proportion of started baskets Sales / number of started baskets
Key actions as a proportion of ‘unbounced’ visits Number of key actions / (visits – bounced)
Sales as a proportion of unbounced visits Number of sales / (visits – bounced)
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4.2. Tools and strategies
4.2.1. Methods currently used for improving conversion rates
More than half of responding companies use customer journey analysis (54%) and copy
optimisation (53%) to improve their conversion rates, making these the most commonly used
methods [Figure 22].
4.2.2. Cart abandonment
Figure 34 shows that targeting consumers who abandon shopping carts or „drop off‟ during the
buying process is not a widespread practice among companies. More than half of company
respondents (53%) do not target these consumers.
Companies
Figure 7: Do you target consumers who abandon shopping carts or 'drop off'
during the buying process?
Response: 296
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4.3. Best practice
4.3.1. Most effective technique for improving conversion rates
Survey respondents were asked to identify the single most effective action they had taken to
improve online conversion rates. Analysis of verbatim answers revealed that the following
techniques are considered to be most effective:
A/B and multivariate testing
Building a new website
Customer journey analysis
Cart abandonment analysis
Improving the checkout process
Copy optimisation
Improved navigation and layout on landing pages/product pages
What has been the single most effective thing you’ve done to improve your conversion rates?
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SAMPLE QUOTE
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4.4. Testing
4.4.1. Areas of testing
Figure 48 shows the most common areas that organisations test. Just over three-quarters of
company respondents (77%) test their websites, while 60% test landing pages.
Companies
Figure 8: What areas do you test?
Response: 289
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4.5. Segmentation
4.5.1. Ways of segmenting site visitors and customers
As Figure 68 shows, there has been a significant increase across the full spectrum of ways of
segmenting visitors and customers. As was the case last year, demographic (58%), geographic
(50%) and behavioural (47%) data are the most commonly used ways of segmenting visitors and
customers.
Responding companies whose conversion has improved over the previous 12 months are more
likely to segment their visitors.
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4.6. People and processes
4.6.1. Barriers to improving conversion rates
For half of company respondents, the biggest barrier to improving conversion rates is lack of
resources. The lack of budget is a major barrier for 29% of respondents, although this issue has
decreased in significance since last year [Figure 98].
Just under a quarter of companies (24%) are hindered by the poor integration between systems,
their siloed organisation and conflict of interest between different departments.
Around a fifth of responding companies (22%) say poor technology is a problem, but the slight
decrease since last year (-3%) provides evidence that technology has become more reliable.
Figure 100 shows that significantly more agency respondents than last year (+16%) cite lack of
strategy as a barrier.
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.
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5. How to improve the conversion process:
a four-stage plan The following information is based on the RedEye white paper: How to improve
conversion – A detailed look at the conversion improvement process2
Every business selling online wants to improve conversion. With it commonly accepted that the
average online website conversion rate is only 2% to 3% clearly things could be better. The truth is
improving conversion is complicated. If it was easy everybody would be getting better results.
5.1. Stage 1: Analyse To improve online conversion it is critical you understand your business and understand your
online customers; and understanding begins with analysis. In order to fully analyse your online
business here are a few basic areas you need to address.
KPIs to consider
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2 http://www.redeye.com/events/whitepapersandreports/how-to-improve-conversion/
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5.2. Stage 2: Test Testing is key to improving website conversion. Once you understand how your customers are
behaving on your website you need to assess what will affect behaviour. What actions and
changes can you make to positively influence buyer behaviour and increase conversion?
Table 1: How valuable do you find the following methods for improving
conversion rates
Proportion of respondents saying “highly valuable”
A/B testing Sample
Customer journey analysis ...
Multivariate testing ...
Cart abandonment analysis ....
User testing ...
Online surveys/customer feedback ...
Event-triggered/behavioural email ...
Segmentation ...
Copy optimisation ...
Expert usability reviews/consultancy ...
Pinch-point analysis ...
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5.3. Stage 3: Optimise After carefully analysing and testing you will then be in a position to begin to optimise your
website based on the information you have extracted about your users.
Segmentation check-list
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Examples of segments
Purchased any product:
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5.4. Stage 4: Measurement The final stage in the process is measurement. In order to continually improve conversion you
need to continually assess your activity and the market place. Remember you cannot manage
what you cannot measure. Here are a few of the most important practices to keep your conversion
rates ever increasing.
Benchmarking
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The original RedEye white paper, covering the four stages of the conversion improvement
process and a range of client case studies can be downloaded for free from the RedEye
website: www.redeye.com/events/whitepapersandreports/how-to-improve-conversion