Since 2014, Conversion Kings have been working on Conversion Rate Optimisation processes for leading Australian and International brands like Koala, StyleTread and Woolworths. Now Matt may not have a highly gelled mullet or a roll of duct tape in his back pocket Mcgyver style, but he does know a hell of alot about creating CRO solutions to fix the problems your eCommerce business might be having. In this chat, he runs through some of the common issues and how to fix them, shares tips on ironing out your GA4 implementation and names the top tools that can help you build an army of converts.
“Before you start, make sure everything’s aligned from a tech perspective”Matthew Pezzimenti
What does a good conversion rate look like?
“A good conversion rate is giving you a positive return on investment, from your traffic sources, whatever that could be. We’ve got some lead gen clients that need to be hitting around a 15% conversion rate to make that viable for them. And we’ve got some brands, they’ve got conversion rates of 0.5, still great as well. And then comes the big question, what is even a conversion?
There’s two things to really consider. Firstly, when we’re defining conversion rate, are we doing it based off qualified traffic? It really comes down to making sure you’ve got the relevant traffic within the buy flow, and then what’s that particular conversion rate? And then the second gotcha that a lot of people have is, are we tracking it off of sessions or users? And then what’s that metric? Because, one user can have multiple sessions and multiple sessions divided by the same amount of transactions will give a different conversion rate.
So there’s a few things in there to consider, but the biggest metric to think about is, are we converting our traffic into our goals that are actually profitable for the business. We’ve done quite a bit of research actually on this and we’ve got a bit over 100 retailer data that’s fed into understanding these averages of all approved data. But if we’re looking at an average across all categories,all industries, we’re looking at 1.39% as an average conversion rate.”
First time vs returning customers
“The first thing I just can’t stress it enough is segmentation. The two segments that I would urge all retailers to really focus in on is what’s the conversion rate of the first time customer? So they’ve never purchased from the website before. And what’s the conversion rate of a returning customer? Because that’s going to give us our cost of acquisition of a new user, where we can have a lifetime value and understand is that actually a good investment or not?
And then we go back to a returning customer, what’s their conversion rate? Because the interesting thing about a returning customer, you might need to think about are they on a loyalty program? You might have a list price or a member price. So that’s going to change the profitability of that sale.
How did that person purchase? Did they go through a buy now pay later, which means that I’m also now going to lose maybe 5% to 7% of my ticket because I’m now having to pay an additional fee through that buy now pay later as well too. And this all contributes to the actual profitability of bringing that segment.”
When we started 10 years ago, we would be really proud of ourselves because we’d build out these lovely 12-month strategies. We’d be really proud, look at all these great conversion issues we’ve got, we’ve got the solutions, and now we build a 12-month roadmap.
And what we found was after about six months, it became completely irrelevant because the market had changed, the insights and learnings had changed, and now we need to do something a bit different.
So where we focus is actually on quarterly strategies. So what we would do is we look at what our opportunities or our backlog of solutions. We would then understand what our priorities are from the business this quarter or what our marketing requests are for this quarter. And then we would identify what optimization improvements can do to support that quarterly plan through the business. And that basically will create the quarterly roadmap of what that optimization program will do to support other parts of the business.”
Links from the episode
- FREE CONVERSION AUDIT
- Conversion Kings
- Full Story
- Tea leaf
- Session Cam
- Shopify Plus (sponsored)
- Signet (sponsored)
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