3 Steps to Optimize Your Online Conversion Funnel What you will gain from this report Considering how essential ecommerce has become in nearly every major industry, maximizing the effectiveness of your online conversion funnel is no longer ancillary; it must be a primary concern for your business. This report will demonstrate how you can leverage competitive intelligence to optimize your sales funnel and achieve your conversion goals. Learn how to identify your full competitive set, set benchmarks with checkout start and conversion rates, and understand the impact of traffic composition on your bottom line.
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Before You Get Started As you’re reading through 3 Steps to Optimize Your Online Conversion Funnel, you will notice references to various features of Compete PRO that can help you leverage competitive intelligence to maximize the return on your digital marketing investments. Visit any of the links below to learn more about a specific feature, or check out our Compete PRO overview. • • • • •
Related Sites Search Referrals Dashboards Incoming and Outgoing Referral Traffic Site Summary
Whether you’re optimizing individual marketing programs or your overall marketing mix, Compete PRO can show you which marketing strategies work best in your industry, which tactics fall flat, and where to find untapped opportunities. With Compete PRO you’ll save time and spend smarter, increasing return on your marketing efforts. When you’re done reading, you can start applying your newfound knowledge right away. Start your free trial of Compete PRO today. Beyond Compete PRO, with Compete Online Conversion Insights, you can better understand where your consumers are engaging and purchasing across rival sites. • • • •
Benchmark and optimize your online sales funnel Identify cross-shopping behavior in your industry/market Understand customer loyalty vs. new customer acquisition Know your competitors’ key performance metrics, including conversions
Click here to learn more about Compete Online Conversion Insights!
Step 1: Build Your Full Competitive Set As with any other aspect of your digital strategy, setting benchmarks and goals is essential to improving your ecommerce conversion rate and the effectiveness of your sales funnel; but, before you can make informed decisions about your benchmarks, you’ll first need to build out your competitive set–the companies yours is most likely to compete with for customers. Comparing your company’s performance to that of your competitors is the best way to understand strengths and opportunities. This is especially important when improving your online conversion funnel since you are going head-to-head with many of your strongest competitors for ecommerce sales. Don’t be afraid to include companies that are much larger than you in your competitive set. They’ve been successful for a reason, so following their best practices may also work for you. One way to identify your competitors is to conduct searches using keywords in your natural keyword set (use your local analytics provider, e.g. Google Analytics, Adobe Site Catalyst, etc.) and take note of the results and ads that display for those terms. By performing this exercise, you’ll be able to understand which companies are literally competing for the attention of your potential customers. Be sure to take notes on ad headlines, snippet copy, display URL, and anything else that may be unique about the creative. To get a more complete picture of your competitive set, in addition to performing searches on important keywords from your list, supplement your research with a third party research tool like Compete PRO’s Keyword Profiles feature, which displays all domains that are receiving traffic from that keyword, both paid and organically, as well as the share of each.
1. Compete PRO Keyword Profile
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Another way to recognize unknown competition is by examining cross-shopping behavior in your local referral traffic. By looking at where your own referral traffic is coming from, you can discover other companies that offer products and services that compete – directly or indirectly – with yours. You should also use third party analytics solutions that show outgoing traffic so you can understand cross-shopping behavior from a downstream perspective. You can also discover unfamiliar competitors by leveraging Compete PRO’s Related Sites feature, which allows you to easily explore domains that actual consumers have identified as similar to your domain based on the content of each site rather than its popularity, creating unbiased and accurate comparisons.
2. Compete PRO Related Sites
Reviewing your competitive set on a regular basis will ensure that you are keeping tabs on the most relevant competitors. Depending on your industry, your competitive set could fluctuate quarterly, seasonally, or irregularly throughout the year.
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Step 2: Benchmark Against Competitors’ Conversion Performance Once you’ve established your competitive set, it’s time to take a close look at competitive conversion data and set benchmarks to help you track your progress. By employing a competitive intelligence solution like Compete Online Conversion Insights, you can access must-have data about your competitors’ checkout start rates, conversion rates, and other bottom-of-thefunnel information. A great way to start your benchmarking is to take a look at checkout start rates of your competitors’ sites, where checkout start rate is defined as the percentage of domain visits that start the checkout process (e.g., a user has clicked “checkout” or similar button). Combined with the conversion rate data we’ll go over soon, you can calculate a checkout abandonment rate to understand how many of your competitors’ prospects are dropping out of their sales funnels. Once you’ve calculated those numbers, you can see your site’s effectiveness relative to your competition.
Online Conversion Insights
3. Compete Online Conversion Insights Site Visits vs. Checkout Start Rates vs. Conversion Rates
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When you understand your competitors’ checkout efficiency, patching holes in your own sales funnel becomes easier. You can refer back to trends in outgoing traffic to find out to which websites you and other players in your industry are losing traffic. For example, if most of your industry’s lost traffic is going to the largest player in the market, it’s important to understand why. Do they have a better price point? Is their checkout process easier to navigate? Maybe they have better product reviews or other social proof throughout the checkout process. Because you know that these customers visited your website or others before the largest players’, you can infer that the reason for their success is more than just their brand. They’re doing something better. Find out what that “something” is and do it even better. Other than notable differences in the checkout processes, there are often other factors to consider when assessing differences in conversion rates. You can use keyword data and search referrals to estimate which products may have higher conversion rates by correlating conversion data with keywords for each competitor. You could even use other third party tools that estimate search spend to potentially prove that higher search spends correlate with higher conversions for businesses in your industry. The last—and most important—type of data you need to dive into to help you set benchmarks is the conversion rate. Using competitive data like what’s available in Compete Online Conversion Insights, you can get online conversion data for your most important competitors that will help you set your own goals. Understanding competitive conversion rates will give you a sense of the overall health of the industry as well as what average conversion rates are like for your competitive set and—more broadly—for your industry as a whole, allowing you to identify opportunities for growth and set realistic targets. Additionally, when combined with traffic metrics, you should be able to build a ranked profile of your competitors to see which one is truly best in class.
4. Compete Online Conversion Insights Trended Conversion Rates
Using all of the information discussed above, you can hone in on the most important key performance indicators (KPIs), like conversion rate, and set actionable benchmarks to track your progress. By tying your goals to the most important data, you’re setting yourself up for success.
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Step 3: Understand Competitors’Traffic Composition Ultimately, the benchmark with the most direct impact on your bottom line is conversion rate; however, there are other important factors that can help you improve your marketing channels by giving you a deeper understanding of traffic composition across your industry. Since you’ve established your competitive set and created benchmarks and goals, next take a look at the bounce rates for your competitors’ sites. While the definition of bounce rate will vary by data source, we’ve found the most effective definition to be the percentage of site visits that last fewer than 15 seconds. By understanding bounce rates in your industry, you can get a much better feel for which companies are best capturing shopper attention. In conjunction with bounce rates, you should go through the buying process for each of your competitors several times to begin to understand every step in their customers’ paths to purchase. You should be looking for advertisements, entrance points to their sites, landing pages, the checkout process, etc.
Online Conversion Insights
5. Compete Online Conversion Insights Bounce Rates
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Now that you have a general sense for your competitors’ customers’ buying experience, you can begin to understand how loyal their customers and prospects are by exploring their new vs. returning traffic. By looking at new vs. returning trends, you can put together a loyalty timeline for each of your competitors that may expose specific campaigns in certain months or even seasonal changes in loyalty. Using this data in conjunction with what you know about your competitors’ inbound and outbound marketing channels, you can begin to establish a much clearer picture of their channel effectiveness. Then, once you’ve learned what it is they’re doing to drive channel success, you can replicate and/or improve upon their tactics to create your own success. What works for them can very well work for you as well.
Online Conversion Insights
6. Compete Online Conversion Insights New vs. Returning Traffic
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One of the best places to identify opportunities to gain market share is by diving deeper into cross-shopping behavior. Using a third party data solution like Compete Online Conversion Insights, you can see crossshopping rates for each individual competitive site which will help you understand whose prospects and customers do the most shopping around before a purchase. We’ve found that the most effective way to define cross-shopping rate is the percentage of unique visitors to a given site that also visit a competitive site in the same month. By analyzing shared traffic between several sites in conjunction with bounce rate, you can flesh out your understanding of traffic composition across your industry. A crossshopping analysis will also expose who your biggest competitor really is—who you likely go head-to-head with on marketing channels like paid search, which directly impact your bottom line.
Online Conversion Insights
6. Compete Online Conversion Insights Cross-Shopping
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As discussed in the last step, you can get a much more granular, product-specific estimation of effectiveness by using search referral metrics. In combination with cross-shop rate, you will get a better understanding of which products people are looking for the most and through that discovery, you can better inform product marketing and sales decisions. If you’re at the top of your industry, you can still gain from this exercise by learning where to focus your defensive tactics to make sure you stay on top. For example, if you notice a competitor stealing a lot of traffic from the industry because of a new product, it is likely worth your time to investigate creating a competitive product.
But Wait, There’s More: Don’t Ignore Your Offline Customers No matter what you do, there will be some percentage of your online shoppers that will refuse to buy online for various reasons. For example, according to surveys we’ve done at Compete, that number is consistently around 25% in the Technology & Entertainment industry. Just because they won’t be buying online doesn’t mean that you can’t influence their purchase behavior. Some of the most hotly discussed data at the moment is in tying online behavior to offline revenue. As analytics solutions become more sophisticated, there are bound to be more and more ways to explore the impact of digital on the holistic path to purchase. With third party data providers like Online Conversion Insights, you can set up reports for usage of the Store Locator tool on competitors’ websites. Using this information, you can begin to estimate offline activity impacted by the website. If, for example, you noticed a relatively low online conversion rate for a competitor, but a lot of activity to their store locator page, perhaps they offer an in-store price matching policy that can be very appealing to consumers. Additionally, by using reports on traffic to weekly ad coupon pages, you can gain a much better understanding of your competitors’ prospects’ purchase intent. Coupon pages are often some of the last pages visited before a conversion, online or offline. Once you have a grasp on purchase intent, you can run experiments for your own business by offering weekly coupons or other deals to see an impact on sales. Lastly, beyond the domain-level data that’s available in most competitive intelligence solutions, you can get custom traffic metrics for any page on a competitor’s site. Whether it’s for a specific product, campaign, or navigating to the search page on the site, it’s data that can be invaluable in your website and marketing decision making processes. By using all of this data together, it’s easy to create a picture and tell a story of how you’re performing online compared with your competitors. Armed with that knowledge, you can continuously optimize your conversion funnel to make it as effective as possible at every step in your ideal prospect’s path to purchase.
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Key Takeaways
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Utilize checkout start rates for your competitors’ sites combined with conversion rate data to calculate a checkout abandonment rate to understand their checkout process effectiveness at a high level.
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Tie your goals and benchmarks to bottom line conversion data so you can easily connect the dots between your marketing efforts and ROI.
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Understand bounce rate to see which of your competitors is best capturing shopper attention and emulate and improve upon what they’re doing.
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Analyze new vs. returning trends to put together a loyalty timeline for each of your competitors that may expose specific campaigns in certain months or even seasonal changes in customer loyalty.
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Dive into cross-shopping data to identify opportunities to gain market share and understand the composition of shared traffic across your industry.
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Make sure your analytics provider allows for custom, page-level metrics so that you can get the most granular data to inform your decision making.
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