Wingify Conversion Optimization Blog
Tips, Tricks, How-tos, Guides, Hacks and Secrets
on Website Conversion Rate Optimization

Introducing Visual Website Optimizer – 50 free beta invites

Sick of tearing your hair for doing a simple A/B test?  Do you seek help of highly paid consultants simply for testing whether a red button would increase conversions? Do you continuously churn ideas for improving your website but your developers are sick and tired of your regular code changes to the site? Do the terms page tagging, HTML and Javascript give you nightmares?

Despair no more, Ta-da! Introducing Visual Website Optimizer – a hassle-free A/B, split and multivariate testing tool that you can use with your eyes closed. Okay, a bit of exaggeration there but honestly VWO makes split testing super fun and dead simple.  Some of the VWO features which promise to make your life much, much easier:

  • Visually design website versions – you simply type in the URL of the site you want to optimize and your website loads into a visual designer where you can pick different elements (such as ad copy, headline, buy now button, etc.)
  • Word-like WYSIWYG editor for making variations – once you are done picking important website elements, you use a WYSIWYG editor for making variations for it. Change text, upload images, change text color or do any other change you would like to test
  • Choose a goal for your website – want to increase sales? increase downloads or signups? reduce bounce rate? Simply specify what goal you would like to optimize on the website for and you are done
  • Add two simple snippets of code to your website – no page tagging, no code fiddling. Simple code needs to be added to the website and that too just for the first time. After that you can create unlimited number of tests from the interface without ever having to touch the code again. Hows that for simplicity?

We won’t do self-praise here (even though we would love to), so here is what one of the initial beta testers has to say:

“[Visual Website Optimizer] does it so disruptively, embarrassingly better than Google does, that it puts a smile on my face” – Patrick McKenzie

Of course, he is referring to a Google optimizer product you probably know about. Ask me privately on email if you don’t :)

Now for some Good News.

I’ve got 50 free invites for this blog’s readers. Use the invite code “wingify-blog” (without quotes) while signing up for a free account here: http://visualwebsiteoptimizer.com Use it or share it, but do it fast as they won’t last long.

Also, you shouldn’t miss watching a quick (4 minute) video below which shows just how simple it really is to start increasing your conversion rates using Visual Website Optimizer:

Let me know your feedback on the new tool! Did you like it? Bugs, comments or praises – all sorts of feedback is welcome. Leave a comment here or email me at paras@wingify.com

Wingify shortlisted for Econsultancy’s Innovation Awards

Just a quick post. We are too glad to be shortlisted for most innovative company in the domain of web analytics and optimization. You can see the whole shortlist here.

Only three metrics matter for your online business

There are number of metrics that startups and websites obsess on. Some of the most overanalyzed yet non-useful metrics are number of visitors or pageviews on a website. The reason startups get obsessive about them is that these metrics are easy to use and are no brainer. Just slap some code on the website and you are ready to get insights on your startup’s progress, supposedly.

In fact, there are three metrics that a startup (or for that matter, any website or online business) should single mindedly obsess on accurately measuring and hence optimizing for:

  1. Monthly growth in number of paid users – what is the number of paid users you have this month v/s you had last month? Is the difference positive month after month? Focusing on growing number of paid users month after month should be top priority because it is what ultimately brings more revenue and gives you confidence to achieve even more success. Any growth less than 50% should be a cause of worry for startups because during a startup’s early days you are looking for hyper-growth. Eventually the number would stabilize as the business stabilizes but during the first year or so target for more than 50% growth for sure. And if by chance, growth starts going towards the negative territory, you should get alarmed and act accordingly.
  2. Retention rate of existing paid users – how many of your existing paid users canceled your product/service this month? Is that figure decreasing month after month? This metric is complementary to the metric above (growth in paid users) because while the above metric helps you focus on acquiring new customers, this one helps you focus on retaining existing customers. If customer growth rate is high but retention rate is low, then no matter how many new customers you get this month, next month you are back to square one. If, on the other hand, you have good retention rate, you will build great momentum month after month. You should definitely go out of your way to retain existing customers. If they leave, do (polite) exit interviews. Ask them why they leave and fix it in your offering. A good retention rate that you should be targeting at would be 75-100%. This means no more than one fourth of your existing customers should cancel your product or service in a month.
  3. Monthly Revenue – the amount of revenue you are bringing in month after month. This is a n obviously important metric but a lot of startups just don’t focus on it as much as they would like to. Instead they start focusing on number of visitors or other such proxies. Monthly revenue ties together the above two metrics plus one more important ingredient: cross-selling or up-selling. If you are acquiring new customers and your existing customers are getting retained, are they purchasing more stuff from you than they currently do?  As your startup evolves, you and your customers should move up the value chain and you should continually find new avenues to provide value to your existing retained customers.  And in the process, make more revenue per customer.

The three strategies of: a) getting new customers, b) retaining existing ones and c) up-selling and cross selling new offerings are not new. Management gurus have been discussing them for ages. Even then startups and websites get drowned in a flood of metrics and forget that they are there to make money.  They should better be optimizing how to make more money. And only way to optimize that is to focus on the right metrics. Do you agree?

How to benchmark competition conversion rates using Alexa in two super simple steps

Let’s face the truth; Alexa is not the best source of traffic data out there on the Internet. Plus, it does not have statistics on conversion rates. But, hey, Alexa is free and we are going to use it to benchmark (approximately) the conversion rates for your competition. Here is how to do it two simple steps:

Step 1. Establish industry norms using your actual conversion rate data

Suppose you are SEOMoz (I am using this website as an example and have no real data for them) and you sell paid tools for SEO. Let’s suppose your current conversion rate is a conservative 4% (again, hypothetical data) and you want to estimate how your competitor SEO Book is doing.

You and your competitors (since it is the same industry after all) follow a similar trend when it comes to relationship between conversion rates and other site metrics such as bounce rate, time on site, and page views per user. In this step, we try to calculate values for parameters which relate conversion rate to all these metrics. Using your actual conversion rate data and the stats that Alexa shows about your website, calculate X, Y and Z as the following:

  • Your Conversion Rate = X * (1 / Bounce Rate as shown by Alexa )
  • Your Conversion Rate = Y * Time Spent on Site as shown by Alexa (in seconds)
  • Your Conversion Rate = Z * Page views / user as shown by Alexa

The reason we don’t use your actual bounce rate, time spent and page views data is because you don’t have that data for your competitors. You only know what Alexa says about your website and what Alexa says about your competitors. So it is better to work on the Alexa data that is freely available and uses the same methodology all across.

As an example of SEOMoz, Alexa tells the bounce rate, time spent on site and page views / user is 50.7%, 219.7 seconds and 3.2 respectively. Using this data, we get the values of X, Y and Z as:

  • X = 4% / (1 / 50.7 %) = 201.6
  • Y = 4% / 219.7 = 0.018
  • Z = 4% / 3.2 = 1.25

Step 2.  Use the parameters to estimate competitor’s conversion rate

Now we have obtained the parameters which relate your actual conversion rate to the data that Alexa shows about your website. Next step is to simply use those parameters on your competitor’s data (as shown by Alexa) to get estimates of their conversion rate.

Competitor Conversion Rate:

  • Estimate 1 = X * (1 / Competitor Bounce Rate as shown by Alexa)
  • Estimate 2 = Y * Competitor Time spent on Site as shown by Alexa
  • Estimate 3 = Z * Competitor Page views / user as shown by Alexa

Finally, to get an idea of what their real conversion rate, we simply average the estimates.

Competitor Conversion Rate = (Estimate 1 + Estimate 2 + Estimate 3) / 3

Continuing the SEOMoz example, if we were to estimate the conversion rates for SEOBook, we calculate 3 estimates of conversion rate (based on the data shown by Alexa for SEOBook):

  • Estimate 1 = 201.6 * (1/69.4) = 2.90%
  • Estimate 2 = 0.018 * 135 = 2.43%
  • Estimate 3 = 1.25 * 2.43 = 3.0%

As you can observe, the estimates are quite close. Hence, we can be pretty confident that the actual conversion rate is close to the average of these three estimates, which is:

Estimated conversion rate = 2.77%

Of course, the above estimated value is only valid if the real conversion rate for SEOMoz that I assumed (4%) is true, which may or may not be the case as I don’t have access to their real web analytic data.

Summary

Simply plug in your conversion rates in the above methodology and you should have pretty good estimate on how you are doing as compared to your competitors. You can also try to triangulate your estimates by using other data sources (apart from Alexa) such as Compete.com or Quantcast.

Do let me know if you find this approach helpful.  As always, feedback and comments appreciated. Want a tool to automate all this analysis for you?

PS: The way I define Bounce Rate and Conversion Rate, they are not related.  But the way Alexa defines, the two metrics are definitely related.

10+ Free Resources for Creating High Converting Call-to-Action Buttons

Lately, I have got quite a few requests for how effective call to action buttons are created in Photoshop. Though having persuasive text as call to action is important, button shape, size, color and style can also make a tremendous difference in conversion rates. So, here goes the list of free resources on creating buttons that convert and examples to get you started:

Photoshop Resources

Ideas for Buttons

This list is an ever expanding list, so feel free to suggest more (free) resources for call to action buttons. Leave a comment and I will add it in the list.

List of Industry Standard Conversion Rates and Bounce Rates

Lot of people inquire about what an ideal bounce rate or conversion rate is and if their website metrics are in the right range. One size doesn’t fit all. In this post, I fish out industry standard conversion rates and bounce rates. Though your only competition should be you, having an idea of  industry metrics might help some.

Conversion Rate Bounce Rate
Grand Average 5.50% 40.58%
Software/Product 7.00% 33%
Lead Generation 2-3% 47.38%
News/Media - 55.50%
eCommerce 3-3.5% 34%
Branding Pages - 43%



Sources for these figures:

What is your bounce rate or conversion rate? Does it match with your industry average?

Is bounce rate and conversion rate related? Short answer: No

To set the definitions right, it is generally agreed that bounce rate is the percentage of visitors who exit the website immediately after arrival. Conversion rate is the percentage of visitors who complete website goal, which may be a signup, subscription, purchase, download, etc.

balance

Most people believe that bounce rate and conversion rate is inversely proportional. That is, if bounce rate goes up, conversion rate would go down and if bounce rate goes down, your conversion rate will go up (because apparently you will have more interested visitors). On the face of it, this seems to be true and hence the proposition that fixing the bounce rate OR the conversion rate alone will achieve business goals seems to be true.

Sadly, this relationship between bounce rate and conversion rate is an illusion. To understand that there is NO relationship between these two metrics, you need to know what bounce rate really is. Does the bounce rate talk about visitors who viewed just one page on your website? Or should it capture more nuanced idea of visitors who stumbled across your website by chance? Most web analytics tools define bounce rate as the former: that is, a single visit is considered a bounce. Bounce rate, defined in such a manner, conveys completely wrong information.

Increasingly, visitors are becoming goal oriented.  For example, if they need to see your shipping policy, they will Google it, read about it and leave your website.  That visit is not a bounce: visitor got what he was looking for. Similarly, most of you will exit after reading this post for say 3-5 minutes. Do I consider you a bounced visitor? No, not at all.  You were engaged for a long time, how could you be classified as a bounced visitor. However, the web analytic tool I use will classify you as a bounce because you just read one page on the website. Realize that bounce rate which you are reading out from your tool is not what it says. Scrutinize definitions and understand what the metric is saying to put it in the right context.

So, what is the best way to represent bounce rate? I think bounce rate is best captured by measuring what percentage of visitors spent less than 30 seconds on your website. Any time  spent which is less will signal that visitors arrived on your website by chance and is NOT at all interested in what you are offering, hence quickly went back to what he was doing. All other visitors spending >30 seconds, even if they just see one page, should be classified as non-bounced visitors. To summarize:

Bounce rate = Number of visitors who spent < 30 seconds on the website /
Total number of visitors


Unfortunately, measuring exact time spent by a visitor by web analytics tools is difficult and most of them will approximate this number. That said, I think bounce rate should be defined by time spent on website and not by pageviews.

Coming back to conversion rate, how is it related to bounce rate? As traditional thinking goes, the visitors who bounced bring the conversion rate down as they have no chance of completing the website goal. I fully agree that bounced visitors (by definition) have no chance of completing the conversion goal. Then, I ask, why to include bounced visitors in conversion calculations at all? To truly reflect the progress you have been making on your website, conversion rate calculations should NOT include bounced visitors. Bounced visitors never really cared about your website, non-bounced are the ones who engaged and spent time going through what you are offering. Conversion rate should capture how good a job your website is doing for getting those visitors (who care about your website) to complete the goals. Conversion rate, ideally, should be calculated as following:

Conversion rate = Number of non-bounced visitors who completed the goal  /
Total number of non-bounced visitors


So, now we have two metrics which are not at all related to each other: bounce rate and conversion rate. Both of these metrics convey different information regarding how you are performing. Hence, both of these metrics should be separately optimized. Optimizing bounce rate is for convincing more number of people to engage with your website. Optimizing conversion rate is for convincing the visitors who are already engaged to complete your website goals. Reducing bounce rate AND increasing conversion rate are two different activities.  Remember that.

What are your views on relation between conversion rate and bounce rate? How do you and your web analytics tool measures bounce rate?

6 Eye Tracking Studies and What do they say about Website Conversion Optimization

I have collected 6 research studies on visitor eye tracking and done the studying for you. Here is what eye tracking studies talk about conversion rate optimization:

glance

15+ Free A/B Split Testing Resources

There are NOT a lot of free resources available on the Internet for A/B Testing. This post tries to lists the best tools, guides and resources for A/B Testing. As it will be an ever growing list, feel free to make suggestions for additions into the list.

Tools

Guides

Show case of existing A/B Tests

If you have any other suggestions for additions in the list, I will be happy to add them. Just leave a comment.

Stop measuring number of pageviews on your website! Measure the right metric: Visitor Lifetime Value

When people install a shiny, new (and possibly free) web analytics tool, few of the initial metrics that they obsess on are: number of pageviews and number of visitors. There is nothing wrong with measuring how many visitors come to your website; it is good metric that gives an illusion that you have everything in control on your website. If website traffic increases, it is good. If traffic decreases, it is bad. What metric can beat the effectiveness of such a simple heuristic!

The real problem arises when website owners never look beyond these simple metrics. Relying and optimizing website around these metrics is a serious error.  What you indeed need to optimize should be something I call visitor lifetime value.

Visitor lifetime value, to put simply, is a concept borrowed from traditional marketing where they use something called customer lifetime value. The idea goes like this: every customer has a potential to deliver certain lifetime monetary value (read sales) to your business and a business can only survive if its customer acquisition cost (money spent on acquiring the customer) is less than customer life time value.

A similar concept can also be applied to websites. Every visitor who comes to your website holds potential to deliver certain value to you and you should know what that value is. Visitor lifetime value has following components:

  • Goals – what goals you want the visitor to complete; it can be signups, downloads, leads, clicks on ads or purchases
  • Value of those goals – you should put a dollar figure to each of those goals. What is a signup worth to you? What is a lead worth to you? What is average sale made per visitor?
  • Conversion rate for those goals – out of 100 visitors who visit your website, how many complete goals you have defined. That value is called conversion rate.
  • Visitor retention – on an average, how many visits does a visitor make on your website. Is that value 1, 2 or as large as 5-10? With each additional visit, you get a chance to have the visitor complete your goals and deliver value to your business. You are doing an extremely poor job if on an average most of your visitors never come back. Have them come back to your website!

Based on these parameters, a simplistic formula can be derived for visitor life time value:

Visitor life time value = [ (Goal 1 monetary value * Goal 1 conversion rate) +
(Goal 2 monetary value * Goal 2 conversion rate) + ….  ] * Visitor Retention Rate


Tracking and optimizing a single metric like visitor life time value gives you THE best perspective on whether your activities on the website are really worth it. If you aren’t calculating and increasing visitor life time value, you are loosing a lot of opportunity to drive your business ahead.   The metric also attaches a bound to what you should be paying for acquiring visitors through paid advertisements, banner ads or affiliates. You cannot spend more to acquire a visitor more than what you expect to derive from him.

Coming back to measuring number of visitors to your website, I lied when I said it is a worthless activity! If you see visitor life time value, it is money/sales/business that a single visitor is expected to deliver to your business. Multiply that value by the number of visitors and you get total website value (in monetary terms).

Total website value = Number of (unique) visitors * Visitor life time value


So, all in all, there are really only two ways to increase total website value:

  • Increase the number of visitors to your website
  • Increase visitor life time value

You must be measuring number of visitors already. But ask your web analyst or web analytics tool to calculate visitor lifetime value and total website value for you. Track it, optimize your activities around it and base your decisions on these values. Because, after all, these are the only values that REALLY matter to your business. Agree?

What are your thoughts on visitor lifetime value? Any additions to the formula? Do you calculate this value for your website?