Tuesday, September 11, 2007

Conversion doesn't start where you think

We might have implicitly known about this fact, but this time it is quantified in a newly released study by ComScore/Forrester: 50% of those who start a transactional process actually have no intention of completing it.

No wonder we often see 2% or 4% conversion rates when using a magnifying glass to look at our checkout process or lead generation forms.

That's why Persuasion Architecture stresses that conversion actually begin much earlier, and also why it's important to measure more than the Conversion Funnel. Conversion Beacons, Points of Resolution, Waypoints and Driving Points needs to be understood and measured. This doesn't mean you need a dashboard will a gazillion of KPI's! At the executive level, you still want to watch Purchase and Buyer conversions (see E.Peteron's "Big Book of Key Performance Indicators"), but at the tactical level, you need to dig much more to find the root cause of abandonment.

That's where a systematic improvement process kicks in. I was first introduced to SixSigma when working for a manufacturing company where it was first applied for production of recreational vehicles, and than extended in all spheres of the business. SixSigma was the rallying cry for the whole company (maybe sometimes too much!). But I can appreciate and apply this methodology to web analytics. In SixSigma terminology, I'm some kind of a Green Belt :)

When faced with a financial transaction, the 50% or so who didn't expect to complete the process gave the following reasons:
  • 23% wanted more product information
  • 19% where not ready to apply
  • 14% wanted to see if they qualified for the product
Even when they had the intention of actually completing the transaction online:
  • 12% changed their mind (what's missing is "why?")
  • 11% had privacy/security concerns
  • 11% wanted to speak to a human regarding the product
To sum it up, "As more consumers research and purchase financial products on the Web, the importance of understanding application abandonment will increase", said Forrester. You bet!
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