A Different Approach to Conversion Funnel

Conversion optimization often starts beyond the funnel. In the following, I will explain how external factors may influence the conversion funnel.

In one of my previous posts, I shared some techniques applicable to conversion optimization on a website. However, conversion optimization often starts beyond the funnel. In the following, I will explain how external factors may influence the conversion funnel.

Set and regularly review your KPIs. Apart from absolute values, do apply ratios, such as the ratio of site visitors to the ratio of buyers/ newsletter subscribers, etc. Even if the absolute numbers seem to be growing, but the ratios are shifting, it is time to take a closer look at what might be happening inside your conversion funnel or even above it.

If a parameter is changing, evaluate the change from the time aspect (gradual vs. rapid changes).

A rapid change is likely to be caused by changes you made on your website, whether willingly or accidentally. As an example, conversion rates may change due to the change in design of a website, product range or the site navigation, but also due a technical problem or a faulty code. Try to exclude the possibility that your statistics are not gathered or displayed incorrectly, whereas nothing actually has happened to your website in reality.

Another reason for rapid changes or rather fluctuations are short-term effects such as a holiday vs a regular day, unexpected weather conditions or a promotional activity by yourself or one of your partners.

However, if the parameter has been changing gradually over a longer period of time, the reason is much more likely to be external. Seasonality is a major factor for cyclical effects, although natural business growth (growing or shrinking market) or the state of competition (market segmentation or consolidation) are likely to have long-term effects that are irreversible.

In this case, it is important to evaluate how the change is affecting your business and what steps can be taken to optimize your website to adapt to the changing conditions.

Another less obvious reason for changes in your KPIs, especially conversion rates is the structure of your marketing leads. It is important to understand that the way how leads travel through the funnel reflects the way these leads are or where they come from.

Imagine your website has not changed in any way for the past few months. However, you can observe that the click rates on certain products you display on the website have changed. If you exclude the possibility of a major environmental change (such as shifting demand for these products or appearance of a strong competitor), the only suitable explanation is that the actual user behavior has changed.

So if you had a recent campaign that was targeted at a new customer segment, you shouldn’t be surprised that these leads convert differently than the leads you have had before. It may even be that though the source of the leads has not changed, the structure of the leads visiting the source has been shifting. E.g. if you use a social network with predominately younger audience for generating the leads, but the network manager now wants to re-position it to suit older users, the leads you get may find your products/services irrelevant.

Unfortunately, the possibility of such external effects as a major shift in the leads structure is often missed out when interpreting the performance data, since it normally requires the change of the whole mindset and getting away from pulling the same conversion levers inside the familiar environment of your website. Moreover, measuring and evaluating the leads that have not actually converted is often difficult due to the missing or insecure data on these leads.

The information above can be summarized in the form of an extended conversion funnel, that demonstrates external influence on the actual conversion rates or other KPIs on your website.

extended conversion funnel

 

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