Wednesday, January 30, 2013

More conversions on your website in 7 steps

Part 1 - Identify your conversion targets and KPIs

The 3 most important KPIs (Key Performance Indicators) in terms of conversion optimization are:
1.    Leads/customers
2.    Sales
3.    Costs

By applying each of these 3 indicators on different levels of the engagement funnel, we can measure exactly how the conversion ratio of each of these steps is related to the total conversion rate.

To determine the correct measurement levels, we need to place the indicators in the numerator of the equation and the different steps of the engagement funnel in the denominator like in the example below:


The ad impression KPI 



The ad impression (this term stands for one view of a certain online ad) KPI allows us to measure the effectiveness of our media campaigns (such as media purchases and planning, the message, the offer, ...). This way we do not only measure the click-through rate, but also the effect of the ad impressions on the total conversion rate.

How often do we think mistakenly that when the click-through rate has increased, the overall conversion rate will also rise along?

But this isn’t always the case. Let’s assume that we’re promoting a free sample of a new product through an Adwords campaign and that this would increase our click-through rate. But if the visitors first have to fill in an entire survey on the landing page, we’ll notice that the overall conversion rate most likely will diminish (instead of increase). By also measuring this KPI we’ll get a total overview of the engagement funnel (from start to finish).

The unique visitors KPI 



This KPI allows us to measure the effectiveness of our landing pages and homepages.

When visitors strand on our website through a certain ad (eg. an Adwords ad), it’s best to speak of click-through KPI and we must link this KPI with the ad impression KPI. In this case it’s best to use multiple landing pages, namely one landing page per ad (but we’ll get to this topic later).

But sometimes we just don’t know how visitors stranded on our website (branding, “word of mouth”, ...?) and in this case it’s better that we call this KPI the unique visitors KPI.

TIP: It’s best to optimize the homepage for the most important (read biggest) target audience to maximize the conversion of the unique visitors.

These KPIs enable us to measure the effectiveness of our site in terms of the message, the design of the site, supply, … In other words they measure how consistent the message and the design of our landing pages is compared to our ads.

Thus these KPIs measure the effectiveness of the engagement funnel starting from the website until the end of the funnel.

The shopping cart addition KPI (or lead generation)



With the help of this KPI the effectiveness of the shopping carts and lead generation processes is measured. 

We prefer a shopping cart conversion process in different steps (same way for lead generation processes): this way we can collect our visitors valuable contact information in phases and can use their names, email addresses, telephone numbers and zip codes later on for marketing purposes. Even when a visitor doesn’t make it until the end of the process.
Furthermore, it’s very useful to measure the abandonment rate (i.e. the percentage of visitors that leaves the process before its end) of this process as accurately as possible. Sometimes a low total conversion ratio is caused by only one unclear field in a form.

We’ll get to the topic of the optimization of the shopping chart later.

This KPI allows us therefore to measure the last step in the engagement funnel 


De leads/customers KPI



The KPI’s per lead and per customer are essential for companies because they allow them to calculate the acquisition cost per customer and ultimately their ROI. When calculating the acquisition cost, we must not only take all costs into account but also all purchases per customer.

To achieve the most accurate picture, we must take all costs into charge and for example not only the CPC of an Adwords campaign, but also the costs of the copy, the campaign management, etc.

Next week: Part 2 – Define and acquire your target profiles

Source: Best Practices for Conversion, Omniture
This is a repost and was originally posted on

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