Sales Revenue falling? – Here’s an Analytics Checklist – Part 2

If your traffic levels are unaffected and your traffic composition is unchanged then you need to start looking at the performance of your site, and the headline metrics for this are conversion rate and average order value. As the key aim of the site is to convert visitors into customers – being able to systematically analysis on site performance is key – as this represents wasted marketing spend. Again you should first ascertain whether the drop off has been gradual or sudden. If the former then you might ask – “What have I missed”, if sudden ask “What have I changed”.

It all very well identifying the problem when you suddenly have no orders – as something has obviously gone kaput – but its more difficult when your conversion rate has reduced significantly (but not to nothing). It’s back to your analytics (and lets face it – if you’re reading this then its good old Google Analytics!) to ascertain the problem. When it comes to analytics it is identifying change that is the name of the game and to do that you have to know what things were like in the past. This means that your analytics package has to be properly configured before you have a problem – it’s no use getting round to configuring it as the problem starts – as retrospective changes are not on the agenda. So what do you need to configure?

• Goals & Funnels
• Search Query parameters
• Ecommerce Functionality (be careful if you do multi currency transactions!)
• Affiliate URL tags
• Filters to exclude internal traffic

There are a number of potential problems here

Bottlenecks – checkout process/payment methods and Pageload times

Bottleneck somewhere on your site do happen – and the quickest way to identify them is through the Google Analytics ‘Top exit ‘pages (are there any unusual items on the list?). If the checkout process is the problem it will show up in the Funnel Visualisation tool (so make sure you have set it up!).  Customers get bored pretty quickly and slow loading pages will do that pretty effectively. If your server is on go slow (either due to traffic capacity or due to database problems) then your customers are not going to hang about. You can monitor your page load times really easily – have a look at the excellent Pingdom for a solution http://www.pingdom.com/. This problem will usually be accompanied by an increase in the bounce rate.

One of the biggest “Conversion Killers” is stock level. No customer likes to hear that their order is not going to be dispatched immediately. As a rule of thumb if you halve your stock then expect your conversion rate to be half as well. An additional issue with stock problems is that they don’t show up on your analytics package. An excellent and recent illustration came from a retailer that was moving fulfilment in-house. In order to save on the cost of moving and to smooth the move process they had new stock delivered to their new in-house warehouse and ran down stock at their operational warehouse. While this produced a smooth handover, it had a disastrous and remarkably sudden effect on their conversion rate – and in the end they lost far more in lost sales margin than they saved in moving costs. The good news was that as soon as they brought all their stock back on line and levels up to their normal level, their conversion rate returned to normal.

If you do run your business on Backordered stock then then you need to carefully think about what information to give to the customer. If your backorder lead times are just a few days then there may be no problem about informing the customer about this – it will enhance your Customer Service profile. However long lead times may have a negative effect on conversion, as customers may decide to shop elsewhere – so it may be a better bet to take the customer service hit – and not tell the customer.

Trust and Convenience

Conversion failure comes as a result of two main factors  – Trust & Convenience. By Trust one might include the general tone of the site (does it look like it represents a good quality business, in line with the goods it is selling?) Is the price fair? Is the site following best practise security? Does the customer trust the business to deliver the goods required in a timely manner? By convenience one might mean intuitive usability clear and  informative design,  as well as acceptable delivery times. All conversion failures can be traced to either of these two factors – after all a buyer does not buy from you because either he does not want to (trust) or because he can buy more easily elsewhere!

In the next post we will look at gradual conversion failure – the “What have I missed” section. If you have any further questions in the meantime, or need advice or solutions, then please get in touch.