Hitmetrix - User behavior analytics & recording

Keep sales funnel top-of-mind

In an online world dominated by search, e-mail and analytics, most every visitor’s intent can be tracked to something. Despite this insight, why do many online stores fail to engage, persuade and convert their visi­tors? E-commerce shoppers are increasingly mature, with correspondingly high expecta­tions, but the problem is deeper. Marketers have broken the sales funnel.

According to Shop.org’s State of Online Retailing report for 2008, online retailers allocate 53% of their marketing budgets to online customer acquisition — driving traf­fic to a Web site or landing page. But when it comes to online customer retention, the marketing spend shrinks to 21%. Does this mean that any effort to convert visitors into customers must come out of the remaining 26% of budget? Because retention is all about building engagement and loyalty, this dispro­portionate spend and disregard for the sales funnel is alarmingly short sighted.

Acquisition strategies that drive traffic to Web sites designed for mass appeal are safe. But going a step further, by creating Web sites with “personalized content,” you improve engagement, retention and loyalty. Loyal customers typically buy and spend more than new customers, so shifting budget into engagement and retention should be a no-brainer. What, then, is the problem?

I think it stems from marketers playing it safe in the comfort zone of e-mail and search. E-mail and search have definite roles to play, but won’t address conversion. After all, what happens after the beckoned traffic arrives? Too often, engagement is weak and visitors bounce. With competition just one click away, there’s a very small window of opportunity. It can only be optimized with personalized content, displaying the right message to the right person at the right time, based on that person’s profile and behaviors.

A 2007 Aberdeen study states that the impact of Web personalization is significant — 91% of companies report increased conver­sion rates, 79% report increased average order size and 62% report increased total revenue. But given e-marketers’ usual discomfort with something new, 17% of best-in-breed com­panies use Web personalization to optimize engagement and conversion potential.

Creating personalized, relevant Web site experiences is a major step toward moving visitors through the sales funnel.

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