Conversion optimisation is beautiful. It is the caviar of digital marketing, it is the most elegant field of expertise in the entire digital marketing spectrum. After all, there is nothing else that has such an impact on business outcome as conversion optimisation. However there are some things that we have to take into consideration when analysing the results of our CXO program as they can have a profound impact on the conversion rate.
1 – Advertising campaigns
Advertising campaigns, both digital and non digital can have a huge impact on CXO programs. Advertising campaigns can drive traffic and conversions or any micro or macro conversion. This might be a good thing as it enables speeding up the CXO program (more experiments in a shorter amount of time) but it can also mess up running experiments. The quality of traffic might drop leading to lower conversion rates. This is a common phenomenon in case of large e-mail or affiliate marketing campaigns. The opposite might occur as well: the conversion rate increases dramatically because a fantastic offer is communicated in the campaign. In both cases, it is difficult to determine which variation of running experiments wins.
2 – Competition
The entrance of new competitors or increased activity of existing competitors will impact your conversion rate. This can go up or down depending on the specific market situation. If you operate in a mature market, chances are that you will lose market share and will have a lower conversion rate. The telecom market and insurance market are examples of this. If you are active in an emerging market, conversion rate might go up as the entire market benefits from increased activity. Think of Ryanair and Easyjet who paved the way for an expanding air travel market or Bitcoin that enabled the existence of other crypto currencies or Netflix that ignited other video streaming platforms.
3 – Seasonality
Normally sales volume tends to vary during the year. For retail black Friday and the holiday season are important revenue drivers while for business to business markets this might be low season. Travel websites welcome their booking peak in January while sunglasses obviously are popular items for Spring and Summer. So every product or industry has its own market dynamics. This seasonality can have a big impact on the conversion rate, so always check historical data or Google trends to understand market trends.
4 – Proposition
Price, return policy, product warranty, delivery time, product quality, availability are all elements that together shape your value proposition. This is probably your most powerful weapon for Customer Experience Optimization. In best case scenario the proposition is part of your experimentation program but in my experience this rarely happens. So most CXO experts are only informed afterwards about changes in the value proposition. Needless to say that a change in value proposition has a huge impact on the conversion rate. An increase in interest rate for mortgages or loans will affect the conversion rate. Poor product quality will decrease conversion rate and leave you with unsold stock. Free shipping and returns improves conversion rate normally. So it is important to understand how your value proposition compares to the competition and when changes in the proposition take place so you can anticipate it and take it into consideration when analyzing results.
5 – Customer satisfaction
It is very much possible that your conversion rate increases without being a direct result from your CXO program. A plausible explanation is an increase in customer satisfaction. This can be reflected in an increase in NPS score or receiving a lot of positive reviews or a higher score in the periodic customer satisfaction survey. All have a positive impact on the conversion rate, which is great. For the CXO expert the challenge is to isolate the impact of the CXO program and to show how it contributes to overall customer satisfaction.