Friday, April 4, 2008

Conversion--How the Internet Has Changed It

Read Part 1 here.
Read Part 2 here.

There’s a simple answer to the question. Pre Internet, only B2B marketers and B2C marketers who sold multi-step products (think automobiles and life insurance, for example) had to engage in conversion marketing. Mass marketers acquired customers and perhaps they had retention programs, but most, especially consumer packaged goods marketers, didn’t have to do conversion marketing. How could they? They didn’t know who potential customers were, what they were interested in, and how to reach them. The web has changed that, dramatically and forever.

The direct marketing conversion process is still the basis. It is stated as Acquire > Qualify > Distribute > Follow Up. In direct marketing, especially B2B, distribution is especially important. Leads could be distributed to the field sales force (high cost), to an internal sales force (moderate cost), or to non-personal, usually mail, follow up (low cost). Then there were two remaining challenges. One was to nurture leads until they were at a high readiness state and then forward them to the field sales force for closure. The other was to motivate the field sales force to follow up leads. Those issues still exist, but the larger challenge for all marketers is using the Internet, especially the website, effectively in the conversion process.

The conversion process (and the retention process also) will be more effective if acquisition has been well done. That means acquiring high-potential customers, not necessarily acquiring the most customers. Successful acquisition requires targeting, as discussed in the previous post. Unless people stumble onto your website by accident, they are coming in from advertising or some other online (or offline) content. Don’t just dump them onto a home page and hope they’ll find what they need. If you can simply drive them to a product page with no chance of confusion in what they are looking for, that’s great. Often that’s not the case, and even if it is, it risks visitors taking a look and leaving without giving you a chance to capture an email address. That is an important function of a landing page. A good landing page is also promotional and moves visitors a step further in the direction of purchase.

Once the visitor moves off the landing page onto the site, the question becomes how to move the person through the site, resulting in an eventual purchase—whether that takes one visit or many. It is very useful to study the paths visitors take through your site and to try to understand what pages are moving them closer to purchase, which pages are not, and where they are leaving only to return later, and where they are abandoning for good. Commercial metrics services provide path data. They can also help you segment both identified and anonymous visitors. Different segments are likely to follow different paths and are almost certain to convert at different rates.

To help understand segments, it is helpful to create personas. Personas can be thought of as a way to put some human flesh on your segments. They help everyone from web designers to marketers develop approaches that work for each segment. Staples redesigned its site around personas. Best Buy (item 1, item 2) has used them both in site development and in developing concept retail stores.

Whatever else you do, keep in mind that most visitors don’t purchase in a single session. Metrics guru Avinash Kaushik recommends measuring “days to purchase” and “trips to purchase.” With that data in hand you can develop a meaningful contact program. That may include offering a carefully-timed incentive to close the final sale. At that point the visitor officially becomes a customer, part of your retention program.

Think carefully about what “conversion” is in your particular situation. It is always desirable to be able to track a visitor from the first contact through to a final sale. If all the activity occurs online, that’s possible. If conversion occurs offline, it can be difficult, and you may want to establish a number of metrics mileposts on the way to final conversion.

Acquisition costs a lot of money. A well thought out conversion strategy is the first step to ensuring that money has been well spent.
Sphere: Related Content

1 comment:

Marketing for Conversion said...

The Conversion Marketing may be something different depending on what was intended such as making a purchase, visiting a website, or requesting additional information.