eBiz News: Managing Metrics to Make More Money

This week in e-commerce news, marketing is making the most headlines. Experts outline how breaking down metrics into four critical steps, as opposed to using just conversion rates, can pinpoint problem areas in the buying experience at your site, a mobile-commerce company introduces a marketing program for e-tailers and a survey shows A/B split testing gaining traction as a way to optimize site performance. Plus, the industry alliance Shop.org announces it will start an advocacy group to watch hot topics in the legislature.

Client research by e-commerce business optimization firm BDXi reveals that while most online marketers are using sophisticated Web analytics applications, many are overlooking an important set of online conversion metrics that can expose specific strategic problems and tactical barriers. As a result, these Web shop owners struggle to identify and address the real root-causes underlying low profitability and growth performance.

"Today, most e-commerce marketers have more online metrics than they really know what to do with," Rafe VanDenBerg, CEO of BDXi, said in a statement. "But surprisingly, our client research shows that critical decision-page metrics are often being overlooked; or are missing from the analysis altogether. And when visibility and insight around this specific point in the sales funnel are lacking, it's much more difficult to diagnose the major strategic and tactical issues impacting profitability and growth."

According to BDXi's report, Four Funnel Metrics, "a single conversion ratio (orders-to-visits) is simply too general to be very useful beyond just getting a vague sense of how a site is performing — it provides no real insight into exactly where the critical deficiencies are."

Here are the highlights of VanDenBerg's recommendations outlined in the BDXi report:

Visit-to-Decision-Page Ratio: On a typical e-commerce site, decision pages are usually product pages, or the pages immediately preceding the shopping cart. Visits-to-decision-page ratios of less than 60 percent should signal a need for further diagnosis, according to the report.
Common problems: A limited product selection, poorly-targeted traffic generation, poor site performance, inefficient product selection tools and navigation.
Decision-Page-to-Cart Ratio: Looking at this, the report says, answers the question, "Are visitors to decision pages compelled forward to the next step in the sales cycle? A similar offline scenario would be a shopper taking a product off the shelf, studying its features and price, then deciding whether to put it back, or put it into their cart." Decision-page-to-cart ratios of less than 30 percent should be a red-flag to e-tailers.
Common problems: Uncompetitive pricing, lack of product information, poor page layout.
Cart-to-Checkout Ratio: This is generally the page right after the shopping cart; the start of the checkout process. The report says that a Cart-to-checkout ratio of less than 60 percent warrants investigation.
Common problems: Slow secure socket layer response, poor page layout, unexpected shipping rates or sales taxes, coupon-code confusion and overly aggressive cross-selling and up-selling.
Checkout-to-Order Ratio: Looking at this addresses the question, "Are visitors who begin the checkout process actually getting through it and completing their orders?" Checkout-to-order ratios of less than 75 percent should be investigated.
Common problems: Slow SSLresponse, required registration, lack of payment options, poorly designed forms and unprofessional-sounding terms and conditions.

M-Commerce Marketing Made Easy
On the mobile commerce front, mPoria announced the launch of GoMobile GM3, a marketing program e-tailers can use to promote their mobile commerce sites to consumers nationwide. It includes mobile advertising, SMS promotions, direct marketing and product merchandising - all of which are customizable to meet the needs of each retailer's business customer base.

Working with mPoria's client services team, merchants receive personalized service and a diverse menu of marketing options including complementary services from key mPoria partners like Merchant Advantage, MillenialMedia and Mobivity. The program integrates marketing techniques across various channels including offline, online and the mobile Web.

Survey Says Split Testing Required for Competitive Edge
In other marketing news, a survey shows that, not surprisingly, boosting conversion rates and improving the shopping experience are the top priorities for e-tailers in 2008. But what is somewhat unexpected is that more than half are using A/B testing to do so.

Conducted by SiteSpect, Inc., a Web site conversion optimization technology company, the survey gathered responses from 70 marketing and e-commerce professionals attending eTail 2007 in Washington, D.C. held this month. Most of the respondents' 2007 budget dollars went to actual site management which provided staffing, tools, services and other resources needed to run their Web sites. With staffing and tools in place for 2008, 57 percent said that testing will be an important focus, with 17 percent stating that it will be their top priority.

Some of the key findings in the survey are as follows:

Over half, 54 percent, of Web marketers are currently performing A/B and/or multivariate tests to gauge the effectiveness of their Web pages. Of that group 75 percent are only running A/B tests.
The majority of marketers (33 percent) indicated that they launch A/B and multivariate tests on a monthly basis, while 31 percent are testing on a weekly basis and 17 percent test daily.
The most common optimization tests that retailers ran were headlines/copy and text, graphic placement and page layout and formatting.

When asked an open ended question about the biggest challenge they face in improving the effectiveness of their Web stores, many mentioned lack of resources, in addition to budget and time constraints as their top obstacles.

Eric J. Hansen, president of SiteSpect, offered the following insight in a written statement: "For marketers who have already adopted testing to optimize entry points to their sites, such as landing pages and the home page, they'll next need to consider internal areas of their sites for further optimization. This means testing and optimizing site search results, navigation, checkout, and other areas where users must successfully complete a multi-step process in order to reach a marketing goal."

Shop.org Goes to Washington
Finally in online sales news, Shop.org announced that it is expanding its mission to include public policy advocacy. As a part of the initiative, Shop.org is creating a Policy Advisory Group, comprised of online retail executives, to identify potential issues for online retailers and provide guidance in advocacy efforts.

Shop.org's initial advocacy agenda will expand upon current and previous lobbying efforts of its parent, the National Retail Federation, on issues such as "card not present" interchange fees and spyware. Other issues that Shop.org will explore include click fraud, patent trolling and net neutrality. Additionally, Shop.org will continue its work with NRF's Association for Retail Technology Standards, helping to create benchmarks and guidelines for the industry to rely upon.

Michelle Megna is managing editor of ECommerce-Guide.com.

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