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Measuring the impact of CRO

Having defined CRO what are retailers actually doing, what are the challenges they face and how are they measuring its impact?

The research showed how retailers are defining CRO and how they are leading it from the top in the most successful instances but we also looked at the strategies retailers were actually implementing and the measures they had to determine success.

The results showed that retailers gauge impact through analysis of a number of KPIs which aren’t necessarily consistent across retailers.

At Schuh deputy head of ecommerce Stuart McMillan says the retailer looks at the landing page to success page conversion funnel and seeks to optimise every step in that journey, such as product page views and add to bag in terms of the KPIs it sets. “When it comes to testing, we more often talk about the particular funnel step than the overall conversion improvement, and in fact when we do talk about the “end result”, we’ll talk about Revenue per Visitor,” he says.

At Wauwaa Brian Mak, chief marketing officer, says the company defines and values CRO against three key metrics; traffic compared to registered users, traffic versus purchases and registered users against purchases. He says the company works hard to drive traffic to its site but even harder on ensuring those visitors translate into registered users since once they do they have a better lifetime value. “We look at which traffic sources and which channels are yielding the best purchase rate and look at everything from visuals to checkout to product,” he says.

Former retailer Paul Postance says the KPIs to focus on are determined by what matters most to the business concerned. “Every day I look for problems or opportunities to help growth and hitting targets. Conversion rate, average order value and bounce or exit are the main ones I devote love and attention to, but there are many others for example returns, credit check / fraud, product margin, site search, page download times etc which are important as these also directly influence bottom line numbers. Then there are meta-KPIs from testing itself,” he says.

Looking at macro KPIs rather than just conversion is essential according to Simon Saneback, an ecommerce and CRO specialist and former chief marketing officer at Danish fashion giant Stylepit. “People should not look blindly at conversion rate as a main KPI,” he says.

To know what changes to implement retailers of course have to test to see what works – especially as they realise that to ensure successful conversion a gut instinct approach is no longer enough. “We’ve moved away from making changes on the website because we ‘think’ it’s the right thing to do,” says Sam Barton, head of user experience at ShopDirect .

He stresses that assumptions about customer behaviour should always be challenged – even if it seems like the right thing to do and even if testing seems to have proven it is the best course of action. “Around 18 months ago we replatformed and changed our checkout process. We put it into user testing and there were no issues but we put it live without live testing and found that was a certain customer set – also one of the most high impact demographic customers – that was being impacted and we saw a drop in sales as a consequence of that,” says Barton. The experience proved a valuable lesson hard learnt. “We decided that we had to measure everything after that,” he says.

Barton says retailers have to ensure the customer is at the heart of their optimisation efforts. “The key thing is to focus on the customer- everything should be customer led,” he says.

And yet it’s something many claim the larger retailers are failing to do since they don’t have the agility of their smaller peers. “A lot of big companies that I have worked with are not even testing – they are going with their gut feeling or following their customers which is disastrous,” said one interviewee.

At Office multichannel director Robin Worthington says customer need is the greatest driver for CRO projects, followed only then by those that will deliver the biggest returns. “The first priority would always be customer feedback,” says Worthington. “If our surveys, analytics funnels and UX reviews are highlighting particular areas that customers are unhappy with, we would always try and prioritise these. Aside from that it is largely based on which ones we feel will give the biggest conversion or financial uplift, and occasionally it can be based on how quick or simple a particular test is to set up,” he says.

At Schuh McMillan says the company looks at its data to decide what to test. “Testing ideas must be driven by data; so we’ll look at our analytics data and see where we are leaking conversion, we watch user testing videos and try and identify user friction. We’ll perhaps then use eye-tracking simulation to try and understand the problem better,” says McMillan.

Retailers are generally testing for at least one business cycle – usually a week – however many experts in this field suggest at least two business cycles with the advice to also factor in sales or promotions within the test duration.

At Majestic Wine online optimisation manager Stephen Green says he runs tests on a minimum of two business cycles in order to reduce the effect of weekly variations of traffic, channel and intent – and includes at least 500 participants per variation. “Regarding CRO data analysis, this is an area where you can never be too careful. For meaningful results you will need an intimate understanding of your analytics configuration and the tool you use. Do not take any number as a given and really question any number you see, regardless of how exciting it looks. There are countless stories of CRO practitioners unwittingly falling into a data trap and for very good reason,” says Green.

Postance advises longer. “I favour multiple concurrent AB/n tests and at least one more complex multivariate test in one cycle of about a month based on core transactional journeys,” he says. But he points out that those within the optimisation teams of a business should also ensure they don’t get pushed to do the ridiculous. “It has to be a ‘testable’ test that has a chance of adding value and all tracked and controlled appropriately. Managing this will stop nonsense ideas getting off the ground. I once had a stakeholder push for a test that I showed would take over a year to give valid result. We didn’t do that test,” he says.

At ShopDirect Barton prioritises tests on the pages that have the biggest volume of customer – allowing him and his team to quickly understand and ensure tests are relevant.

At optimisation manager Ollie Scheers says his company also tries to use as much traffic as possible across all its devices for test and learn opportunities. “We plan our roadmap so that we can run concurrent tests across our site on desktop, tablet and mobile. We set an expected conversion rate uplift (or change in our chosen success metric) for the test and then calculate the required sample sizes for a 2-tail T-test. For us it’s important that we can also measure any negative impact a change on our site delivers, so we can validate ideas,” he says.

Seb Villien, director of ecommerce at fashion retailer Joe Browns, sounds a note of caution when deciding how and what to test however. “From my point of view, it is always key to remind yourself of the aim of any test you run, i.e. what would I like to find out and will that make any difference to the business. So many things are just interesting but without any potential for real business impact,” he points out.

And he says the same is true when deciding on the variant of tests run. “The other point is to be 100% comfortable with any variation of a test you run; if there is one that you would never want to implement because it is not on brand or goes against your strategy, do not include it in the test – it would be pointless (and head-scratching if this specific combination was the winning formula!),” he says.

Retailers know there is much to do in the area of CRO and it’s certainly keeping them busy. The customer journey must be as frictionless as possible to drive conversion and that’s increasingly harder to do as customers’ expectations rise yet further. “People are far less patient now, and will get irritated and leave the site for quite small things,” says founder and managing director Gary Baker.

CRO is about converting as many visitors to your business as possible into customers but of course this means that traffic driven to the site has to be as relevant as possible. “The problem with driving irrelevant traffic to your site is that it can be costly. If you have a low conversion rate of 0.1% with irrelevant traffic, and a conversion rate of 1% with relevant traffic, that’s a ten-fold difference. Therefore with a low conversion rate, the cost for that irrelevant traffic conversion should be a tenth of the cost of relevant traffic,” says Ivan Lopez, CEO of Wauwaa. “This doesn’t take in to account the cost of handling a high-volume of irrelevant traffic, such as SEO, bandwidth cost, potential customer service issues, social media, history score for SEM and social media. Because of this, we focus our efforts in driving traffic that is relevant to the site,” he says. This is seeing the company increasingly focus on segmentation and personalised content, using marketing automation software from specialists Bronto.

Discoverability is a huge problem for many retailers – especially those that have a wide variety of ranges and suppliers such as “We have over 170,000 products on our site shipped from over 5,000 different sellers across the UK. We have a key focus on site search testing and algorithm testing that ensures the best products appear within the right category, and the right recommendations are surfaced across the site,” says Scheers.

Walls and Floors web development manager Tom Murrell says the competitive environment of the online world makes differentiating a tough must do and that new technologies can help with that. “There’s so much choice and so many options, you need to aim to stand out from the crowd. I like us to innovate and take the odd risk with a new online technology, if it doesn’t work out discard it and on to the next test,” he says.

The challenges of conversion also differ according to location and what may be a frictionless transaction for one country may not be for another – with payment being a typical example. Country Attire for example is looking at offering differing payment options in Germany that better suit the habits of the local consumer with the aim of boosting conversion there.

The checkout process can be easily overlooked in the challenge of conversion yet can be a powerful functionality to enhance conversion. At one of the company’s most recent CRO projects focused on the development and release of a new checkout producing some staggering results, according to head of online Kevin Sears. “We were able to reduce the number of steps to payment by an extraordinary 25%. As well as improving conversion rate, it speeds up the process for the customer making their life easier. We have seen an 8.2% increase in the number of customers that entered the checkout and then proceeded to the payment stage,” he says. The numbers achieved from the changes also made it a key talking point at board level, according to Sears.

At WauWaa a very simple change of moving the checkout from forced registration to include a guest checkout in the middle of 2014 also increased conversion rates dramatically, according Mak.

At Danish fashion retailer Stylepit the retailer addressed conversion at checkout with the implementation of Klarna Checkout which speeds up the checkout process by taking away the usual payment barriers to conversion, thereby increasing the likelihood of a sale. As well as saving in time and money the project saw an increase of 68% in its conversion rate in Norway.

Some of the most influential CRO changes can be about challenging ill-thought out assumptions and so few tests are without cause since the tiniest factor can have huge impacts. “Other barriers could be as silly as your messaging or your visuals,” says Mak. However it could also be that a retailer is simply missing a call to action. “Having clear calls to actions is very important. Sometimes we run promotions of 30% off and on the first day we will get some people that are interested but often it’s not till the last day when we message customers to say that the Sale is ending that orders actually come in. We have done campaigns where we didn’t run reminders and saw that the conversion was more flat,” he says. “Having very clear call to actions – “shop here”, “buy now” – these things are so important and without them a lot of time people won’t actually become customers,” says Mak.

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