Our first in a series of six topics discussing the eCommerce Conversion Funnel. When broken down to its core components, successful eCommerce websites will use some variation of the following to convert a visitor.

1) Targeting & Acquisition
2) Landing Page Effectiveness
3) Optimizing Checkout & Cross Selling
4) Analyzing & Segmenting Visitor/Keyword Data
5) Modifying & Testing Hypotheses born from Analysis
6) Repeat

In reality, very few eCommerce websites devote the required amount of attention to each stage of the process. The majority have some grasp on Steps 1-3, but steps 4-6 are often neglected or given less emphasis. Clearly, the most successful eCommerce websites understand the importance of all 6 stages, and devote the proper tools and manpower needed to insure that each stage is fully realized. The role of an analytics tool is to help mine, gather, and arrange visitor/keyword data into a manageable and flexible database from which Key Performance Indicators (KPI or Metrics) are calculated. By observing the trends and performance of key metrics, hypotheses can be drawn and tested. Regardless of whether the hypotheses are proven right or wrong, the testing process itself leads to conclusions being reached, each of which, can then be retested or adopted. However, the quality of the analytics tool will be a major factor in determining how well each of the following stages is realized.

Targeting & Acquisition

The first step is the most obvious one, targeting and acquiring qualified visitors. Note the word qualified. The easiest thing to do is to send traffic to a website. There are countless advertising venues on the internet, some good, some bad, some shady. The primary concern for the marketer is how well qualified the visitor is. When it comes to search & PPC, the best indicator for the level of qualification of a visitor is the number of words used in the visitor’s search phrase. There is a direct relationship between the number of words in a given search phrase and the conversion rate of the visitor. One word searches convert at the lowest percentage, while four word searches convert at a much higher percentage than 1, 2, or 3 word searches. However there is an indirect relation between length of search phrase and total amount of searches. In this case, there are far more searches done for one word search phrases than for four word search phrases.

This leads to a small dilemma for the marketer. For branding purposes, clearly a business would want to target shorter phrases for which there are more total searches. Branding initiatives are not concerned with conversion insomuch as they are exposing the brand to the largest amount of visitors per dollar spent. But if the goal is conversions and return on investment, it is far better to target the longer search phrases as these are indicators that the visitor is more ready to buy. Naturally there are exceptions to the rules as well. Certainly there are high converting 1 and 2 word phrases (Brand Terms are a good example), and there are 3-4 word phrases that convert poorly. There are fewer exceptions to the amount of traffic rule which shouldn’t come as a big surprise. It makes sense that more people start with broad (1-2 word) searches and begin to narrow (3-4 word) the search over time as they educate themselves and narrow their choices.

The role of the analytics tool is to measure the effectiveness of keywords and phrases on a traffic, ROI, & retention level. A good analytics tool will identify high traffic phrases, high converting terms, and high retention keywords. Each type of keyword has its place in the marketing plan. Many keywords will stretch across all three types and these keywords will become the website’s Core Keywords. Core Keywords include Branded Keywords (Keywords incorporating the name of the brand or website), as well as highly relevant product/categorical keywords. These Core Keywords should be aggressively marketed, for many times they follow a variation of the 20/80 rule(20% of the keywords create 80% of the revenue). While the true percentages of that rule will vary by website and market, the inherent truth of the statement lies in the fact that a small percentage of the keyword list will create the bulk of the revenue for almost any eCommerce site.

A good analytics tool will identify ROI from a source (Search, PPC, Email), referrer (Google, Yahoo, www.referring-site.com), and keyword level (lava lamp, black light poster, etc….). By determining ROI at both a global and granular level, online marketing budgets can be utilized most effectively, shifting money away from under-performing sources or keywords. The end result is a highly optimized campaign flexible enough to produce any desired outcome be it branding, conversion or retention.

Stay tuned for Part Two: Landing Page Effectiveness.