KFC: Katz's Framework For Conversion Rates

Framework For Conversion Rates

Cardinal Path articleWhy are insights so difficult to find in our web analytics charts and reports! Why don't they jump out of the charts unless something's off the charts! I'm proposing a framework with more conversions rates. More? How is proposing even more conversion rates going to make things easier!

To make trends and insights a little more visible, we need to scrape off some muck, reduce the noise and focus on outcomes. That is what more focused conversion rates provide. To do that, I'm describing a Visits Analysis Framework. The title is for sensationalism and is not to suggest that this has not been proposed elsewhere.

The most important aspect is that this is a framework and not a cast-in-stone structure. Different goals, different sites and different areas of responsibility will require their own data points along the visit.

Step 1 - Define Goals

Pick one of your Goals (Google Analytics) or Success Metrics (Site Catalyst). Use the metrics or feature your Web Analytics tool uses to measure your site's Key Business Objectives. We'll use an Ecommerce Goal for simplicity but the KFC applies as easily to the submission of a lead form or any of your site's measurable objectives.

To make this meaningful to you, pick a Goal that is closely linked to your bonus, performance measurement or job stability.

Step 2 - Break Down Visits into Stages

Divide the Visit into stages, each starting at a pre-defined point. The definition is relative to the goal. I've used terms to name the stages that might have different meanings for you but you may prefer your own to help them help you tell the story in your data.

In a previous post I spoke of a report consumer focusing on his individual area of responsibility. That focus is one way to arrive at the right questions to ask of your reports. The focus and areas shift according to whatever hat (or whose hat) you're wearing at the time of the analysis.

The division below provides a framework to guide you to answer those questions by identifying points in visit data that maps to your area of responsibility

The commonly identified stages are:

Arrival

Page One - that's simple enough.

Visitor Acquisition

Regard Acquisition as occurring when the visitor hints that she's arrived at the correct or appropriate site. At a minimum, that's the 2nd page of the visit.

Consideration

The point at which the visitor can be said to be considering the proposition measured by your goal. For Ecommerce goals, this would be the consideration of a product or possibly even a product category, depending on your site structure and purpose of your analysis.

Flow Start

The point at which your visitor begins the conversion process. Either the Contact Us page or the Lead Form display on Lead Generation sites, for Ecommerce this is typically Add-to-Cart. If you are measuring the effectiveness of your shopping cart it could be the start of the Checkout process proper.

This step will typically be the first step in your Funnel but it need not be - it is dependent on the focus of your measurement.

Conversion

The successful completion of your goal.

Step 3 - Extract the Data

Using the features of your analytics tool, extract the number of visits and during which time period each of these steps occurred. The numbers below will be used in our KFC calculations. In Google Analytics, one would use Advanced Segments.

Arrival

The number of All Visits. Let's use: 1000 visits.

Visitor Acquisition

Let's use the pre-defined Segment "Non-Bounced Visits" and assume: 400 visits (representing a Bounce Rate of 60%).

Consideration

This may be more difficult to define. Depending on your site, it might also be the more difficult Advanced Segment to create. Typically, on an eCommerce site, it will be Non-Bounced visits with at least one product page view. We will assume 300 such visits.

Flow Start

If your Funnel Starts at Checkout, use the Add to Cart as your Flow Start Rate? Similarly, if your Contact Us Goal Funnel begins with the form that pops up from a link on the Contact Us page, consider using the latter as the point for the Flow Start Rate. We'll assume that the point we select was viewed in 150 visits

Conversion

The successful occurrence of your goal. At a "Conversion Rate" of 1.5%, that would be 15 visits.

Step 4 - Calculating the Conversion Rates

Conversion Rates are now calculated between a series of starting points and the conversion point, or between any two points.

Start Point to End Point Rates

Arrival to Conversion (aka Conversion Rate)

= 15/1000 = 1.5%

This is the rate reported throughout GA. I have no problem with this, provided we understand it's highly limited relevance because it is at the mercy of factors external to our site. A stark example is the dilemma faced by certain travel sites when the weather goes haywire at their holiday destinations.

Acquisition Conversion Rate

= 15/400 = 3.75%

This is far more relevant at so many levels. Most importantly, it excludes most external factors. When measuring optimization efforts anywhere on the site (or even SEO/SEM efforts) we are now using a rate that is less susceptible to external media, political, health or meteorological storms. How would we measure improvements to the site's navigation if the effects of a public safety scare sends a burst of irrelevant traffic?

Consideration Conversion Rates

15/300 = 5%

From this point onwards, the rate is better insulated from external factors and changes to the rate can more accurately be measured in the context of product demand and supply and the effects of improvements to the site.

Flow Start Conversion Rate

= 15/150 = 10%

If this is the same as the first step in your Funnel, the Flow Start Rate will be similar to the Funnel Conversion Rate in the Funnel Visualization Report. Further, the converse of this rate would be your Funnel Abandonment Rate.

Point to Point Rates

Similarly, one can calculate drop-off rates or, more positively, their converse "conversion rates", between neighboring points. E.g. A Considered Flow Start Rate or an Acquisition-to-Consideration Rate.

Such rates help focus team members responsible for persuading and guiding visitors to progress from one point to another. They will not have data to inform their decisions.

Step 5 - Get Creative with KFC

I can only wet your appetite and encourage you to get your fingers dirty. Adapt and extend the Framework to focus on measuring specific roles of the areas of your site. If the above points don't match your specific needs, define points of your own. E.g. consider a Prospect Point somewhere between Consideration and Flow Start.

Step 6 - Use KFC with other Segments

The KFC techniques can be used site wide but you will want to look at these metrics for specific segments relevant to you such as Paid Search, Organic or by specific Marketing Campaigns.

For each, it provides a more granular comparison based on Segments that are relevant to your site, product, sales cycle, etc.:

  • Campaigns
  • Mediums
  • Location
  • Browser or Screen Resolution
  • Site Speed
  • New vs. Returning
  • Custom Variable Segments such as visitors who Downloaded or used Chat in prior visits
  • Visits from visitors of different Recency or Loyalty

Summary

Using a Visits Analysis Framework (such as the KFC) to compare metrics over time will give you very meaningful insight into what is going on on your website where it matters most - to your key business objectives.

Don't start with Pageviews, Time on Site or even Bounce Rate or other such metrics which, for the most part, should only be used to help you explain the changes in the KFC conversion rates.

Start with a better, more granular understanding or your bottom line and then look at such supporting metrics.

I will be blogging more on this topic, how to implement it and draw insights from it on our Cardinal Path Blog

Online Behavior © 2012