How Top eCommerce Companies Utilize CRO to Stay Ahead
Published: January 17, 2018
Author: Jeremy Epperson
This week, we’re diving into innovations in eCommerce, and we’re looking at it from various angles. Today, how to increase ROI of an eCommerce website using Conversion Rate Optimization.
eCommerce companies are constantly looking for opportunities to drive ROI; typically they place the majority of their focus on optimizing media. Unfortunately, over time most companies will hit a plateau because there are diminishing returns to driving additional traffic to a site.
What many companies fail to consider is that an ad click is only a few seconds of that potential customer’s overall experience. By shifting even a small amount of time and resources to optimizing the onsite experience, you can unlock massive returns. In this post, I’ll dig into the ways top eCommerce companies are using CRO to outpace the competition.
Culture of Optimization
1. Top eCommerce companies prioritize CRO and a culture of continuous improvement
For the most successful companies, experimentation and optimization is part of their core identity. Today’s top companies realize there are huge advantages to optimizing across the entire customer experience instead of just focusing on media.
For example, one eCommerce client I worked with spent six months of frustration trying to get marginal returns out of the most nuanced testing with their paid media, yet they had never tested on their website. The first test that we launched fixed some blatant usability issues in their checkout flow that lead to a 42% increase in purchases.
The returns you can get when optimizing media and the onsite experience are similar to compounding interest. What you learn about your customers along their journey can be used to improve the experience at every step, and your ability to drive ROI will improve over time. It’s the constant feedback loop that’s created when a company makes testing part of their lifeblood that creates huge wins.
2. They believe in function over form
I like to joke that ugly sells. UX designers may take offense to this, but in my experience, a beautifully designed site doesn’t necessarily equate to more sales. Take Amazon, for example. You aren’t going to see it on any “Top Designed Website” lists, but they are very effective in converting. Amazon has figured out what works based on scientific testing, and you won’t see them pouring millions of dollars into keeping up with latest trends. Too many sites focus their resources on complying with rigid brand standards and following the ever-changing design trends online. None of this is done with the customer in mind.
When someone lands on your site, they are there to complete a task. The more intuitive and simple you make that, the more you will sell on your site. This is not to say that a site cannot be beautifully designed and optimized (they aren’t mutually exclusive), but the hypotheses you develop to test should be driven by customer research. Above all else, it’s about following the data, which brings me to my next point.
1. Data should drive all testing
The most effective way to drive ROI in testing is to isolate the issues that are “blocking” users from converting. These could be related to the messaging, user experience, or any number of issues that stop users from buying. Therefore, the best eCommerce companies let customer research inform all of their hypotheses. If there is no solid data or proof that something needs to be fixed on the site, then they don’t allocate resources towards it.
This is very important in CRO, because you have a limited amount of resources and visitors to test different experiences on. Being data-driven helps provide prioritization to the process and provides a higher probability that that tests you run validate as a lift in conversions.
2. Map the entire customer journey
Some eCommerce companies have the misconception that purchasing online is a one-time, single-session event. In reality there is a much longer customer journey that occurs over time. Top eCommerce companies understand this and use it to their advantage.
Attribution is a critical piece of optimizing the onsite experience; it takes into consideration where a user is in that journey and provides them with an experience that matches their intent and motivation. Again, optimizing media is just one piece of a much larger picture. As you begin to follow customers through their journey, and map out how they are getting to each step, you can create experiences that much better meet their needs, which will drive more conversions.
3. They utilize analytics for deeper customer understanding
Analytics is a means to achieving the previous two points. Analytics helps you understand what customers are doing at each phase, so you can understand when and where abandonment is happening and work to fix it. I’ll briefly touch on a few methods that eCommerce companies can use:
- Funnel abandonment: Isolating the pages and events that cause users to abandon before converting.
- User pathing data: Discovering onsite behavioral trends. Finding out how users move through a site and what they engage with.
- DMPs (Data Management Platforms): Provide a means to track abandonment rates across specific 3rd-party attributes such as gender, income bracket, geo-location, etc.
Top eCommerce companies utilize these methods of understanding their customers so that they can build their hypotheses off the findings. This greatly increases their likelihood of achieving quick, high-impact wins.
1. Use KPIs as your foundation for testing
Top eCommerce companies optimize for the right KPIs to move the needle. It’s important to measure both macro and micro conversions, but you need to decide upfront which you are optimizing for. This is pretty straightforward for most eCommerce sites for customer acquisition. However, results can be conflicting, so having everyone in agreement about what constitutes a winning test means is important.
For example, one client that sells clothing online was churning out dozens of tests with micro-conversions of engagement, add to carts, and other goals that were not closely tied to sales. They were validating lifts in conversions in their A/B testing platform, but it wasn’t truly driving revenue and ROI. By shifting their focus to testing on only hypotheses that could improve sales and utilizing goals that measured purchases and revenue, we were able to drive a 34% increase in revenue within the first 3 months of our project.
2. They utilize iterative testing that is measurable and statistically valid
Top eCommerce companies understand that the value of CRO comes from the iterative nature of testing. Even when pinpointing the exact issue blocking conversions on the site, they are aware that they won’t get a lift in conversions if the implementation is off. It’s always important to keep iterating to find the optimal experience.
The companies that are most successful with CRO follow a rigorous scientific process to avoid data pollution and statistical errors. It’s all too common for data to be misinterpreted, so ensuring that you have the right people in place to make sure tests are moving forward and being interpreted accurately is pivotal to success.
3. They understand that done is better than perfect
eCommerce companies that find the most success with CRO understand that part of the optimization process is ensuring they can get tests live in a timely manner. There are a number of obstacles that exist to getting this done in a fast-paced digital environment with so many stakeholders. The best policy is to focus on minimizing the level of effort to proving or disproving a hypothesis.
Anything that doesn’t directly tie to the hypothesis should be excluded from testing to allow you to get the development done quickly. You will always have the opportunity to continue to iterate based on your learning or to clean up the implementation when you push it live on your production site.
In summary, today’s most successful eCommerce companies understand the following:
- Successful CRO is more than just optimizing media
- CRO is not just about a single test, but should be a company mindset and should span the entire customer journey to improve the overall customer experience
- CRO must be based on data and informed by analytics and customer research, and it requires a rigorous scientific approach
- Success is dependent on quick, iterative improvements. It’s not about being perfect
- When performed correctly, CRO can and will make monumental changes in how you understand your customers, they understand your business, and your bottom line.
If you are ready to get started with CRO, or want to ramp up more quickly, my team would love to work with you. The 3Q CRO team offers a full spectrum of capabilities, including customer journey mapping and research, roadmap development, precise scientific testing methodology and principles, and more. Contact us to learn more.