Building new E-commerce platform? Beware of the pitfalls!
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Off the Shelf provides a platform for Retailers and Consumer Packaged Goods companies to discuss and gain insights on the pressing problems, trends and solutions.
February 23, 2012
October 3, 2011
Essential and Savvy features for your Social Solution
I have discussed about some important strategies that a retailer's social media plan should entail, in one of my blogs earlier. It is extremely essential that we also provide the right features in our social solution. In this blog I have discussed some very interesting features that a social solution must include. This list is a result of an extensive research of various social features currently available in the market and being put to effective use by various online businesses. We had also presented these ideas through a PoV last year.
We have all known of the facebook and twitter share/like button and this has been extensively talked about thus far. We also know about features such as the "Shop" tab on facebook, But there are some very interesting features that can make your social shopping solution savvy and fun.....
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Aligning the social strategy for your online business
We do realize that social media plays an important role in the way we conduct business today. Every retailer yearns to be a part of the social revolution. In their quest to stay ahead of the competition, is very important for every online business to strategize a social media plan. How should retailers go about planning their social media strategy?
There are a few important facts that any retailer should analyze before they jump to a strategy:
- What is it that I want to achieve, through a social media strategy?
- Do I really believe this is an unearthed goldmine?
- How should I implement a successful social media plan? How easy is it to implement different social media strategies and what is the timeline I'm looking at?
- What is my budget?
Well, as we find answers to these questions, we do realize that there are two different strategies that a retailer may plan to implement:
1. Retail layer on a social layer:
This strategy aims to build a retail layer on a social layer (For eg. Building a retail layer on facebook). Very recent examples are that of J.C.Penny embedding their complete product catalogue on facebook, and Hallmark cards embedding the "Shop" tab on their facebook page to allow customers to buy cards on Facebook.
Features such as the Facebook "like" button and "share" on twitter may also be considered part of this strategy. Another very important feature would be open id or facebook/twitter login.
Amazon implemented facebook connect in order to provide product suggestions based on likes and favorites pulled from your social graph. By connecting your account, you allow Amazon to scrape the interests and favorites of your friends. You can then view suggested gift ideas based on this data. Amazon also will populate lists of items that are popular among all of your friends, as well as suggestions based on your own interests.
What can I achieve?
In simple words -
- Connectivity to customers and a more informed and a knowledgeable customer.
- Easy Viral marketing on social media.
- Personalized recommendations using interests/likes/dislikes etc of customers based on their social graph.
What about the time and budget?
Easy to achieve. The easiest parts being "Facebook like" and "Share" buttons. The overall strategy is easy to implement and requires a few months of efforts. An agile implementation model helps in interim analysis of the success of various features you implement.
2. Social layer on a retail layer:
This is a comparatively difficult and a time consuming strategy to implement. It aims at building a social network within your retail network. Mysears.com is an example of this. Department store Sears have given their website a social shopping makeover by adding a social layer that allows you to "message" and "follow" other users, see their profiles and their onsite social activity, like products (as well as dislike, want and own them), and join groups.
What can I achieve?
- Connectivity to customers and a more informed and a knowledgeable customer.
- Easy Viral marketing within the retail network.
- Personalized recommendations using interests/likes/dislikes etc of customers based on their social graph within the retail network.
- Though most of the results are same as the first strategy, the following points are worth taking a look at.
What about the time and budget?
Time required to implement this strategy is greater than leveraging an already existing social network like facebook or myspace or twitter to do your job. If you have a greater social media budget and want to own all the trends of your customers without letting a 3rd party to know what your customers like, what they dislike, what are their gift lists etc. then this is the strategy for you to implement.
Which strategy is the best for you?
The answer to this question depends on a multitude of factors, which have been considered above. But if I were to consult you, I would recommend you to go with the first strategy if your budget is not huge and you are ok to let facebook or whoever your social media partner may be, to own all of the shopping and activity trends of your customers. Also, this is the best strategy for you to implement as long as you feel you are only testing the waters and not actually swimming. You may take a plunge into the second strategy if you have a solid budget and have already tested waters for yourself. A detailed analysis of your business format, product portfolio, customer profiles, market demographics, customer preferences and your Social commerce budget will help portray a better picture of your future social strategy.
These are some thoughts that might help you as retailers, marketers, social media executives or as consultants to help align social media strategies of the future.
September 22, 2011
Proper Monitoring of an eCommerce Site
Proper monitoring is fundamental to the operation of any high-performance eCommerce site. The reason for this is that it is very difficult to validate that code is correct prior to going live, given the limitations of the testing process, and the limited time available to properly test. As a result, we test a little, and then throw the code over the wall to the user.
In an ideal world, the competition would test their code better, thereby giving us enough time to test ours. This may become the norm in ten or fifteen years, but for now, everyone is running as fast as they can, and very few eCommerce businesses would feel comfortable slowing down.
An alternative is to accept the fact that you are not going to get the time to test prior to going live. All is not hopeless, as there is no reason that you can't keep testing a system after it goes live. Normally, this type of testing is called monitoring, but it resembles testing in that data is gathered that indicates where the system is having problems. The fact that the transactions are real rather than synthetic is actually a positive, if the user frustration is not intolerable.
For example, if you go live with your new version of your eCommerce site in August, it may be fine for today's loads. By monitoring and continuously improving, you may be able to get it ready for the holidays, even if it is not ready on the first day in production.
There are several types of monitoring:
September 21, 2011
Our Love/Hate relationship with Web-based System
· Response Time - Why does every site that I access seem so slowwwwwww. There are several reasons for this, including a lack of investment in performance engineering and tuning. Even more investment can't solve the problem all by itself, however, because many Web-based systems have design problems that can only be solved by fundamentally reengineering the site.
· Connectivity Assumptions - Many sites are written assuming that you are accessing them via a DSL or better connection. If you are in a hotel room, on a smart phone, or connected via a portable hotspot, good luck using these sites.
· Feature Creep - It seems like every time I really get comfortable with an online banking or insurance system, they do a massive GUI redesign and I have to start the learning curve over. To make it worse, the new design is not often that much of an improvement over the old one, just different.
· Bugs - Bugs are a part of life in the computer age, but certain types of bugs are especially annoying. The worst is probably the phantom data entry error. You enter a value in and an error message pops up like "value can't be null". You enter a different value, but the error message displays again.
· Lack of confirmation - Commercial sites normally provide follow-up emails that can be used to prove that an activity took place. This is missing from many corporate systems leading to situations where the user says that they entered their timesheet, of signed up for a class, but the system didn't record it. The logs don't show much, and it is the user's word against the system.
· Too much Flash - Many sports and other sites suffer from the overuse of Flash objects. We just want to see how our team did in the West coast game last night, but instead we get tons of glitz that we have seen before, and really don't need to see again.
The owners of online systems need to start thinking like factory owners. Their site is like a factory where users are a raw material to be combined with physical products in a catalog, and processed into a completed sale or service. They need to develop metrics for speed and throughput, set the monitoring tools to gather the data, and set goals for improvement. The Web equivalents of Industrial Engineers should be hired to continuously improve these metrics through optimizing the flows in the system, removing bottlenecks, etc. (These "Industrial Engineers" are normally called Solution Architects or Performance Engineers but ideally, they are a little of both. )
Another change that is long overdue is a rebalancing of the priority given to adding new features over fixing known problems. There seems to be a belief that additional bells and whistles are more pleasing to a user than problem-free visits with quick responses. If we analyse it from the user's point of view, we would likely place a higher priority on freedom from frustration.
May 6, 2011
Performance Tuning of Web Applications
Web-based applications need respond quickly to user actions. Nothing will kill the popularity of a site or application faster than excessive lag time between user action and system response. All of us can recall site that was so responsive that it was fun to use; unfortunately, this is not common. More often we remember sites that were so slow as to be nearly unusable; this is very common. We are often left to wonder why more companies don't spend the time and money necessary to improve their performance instead of adding new features. Perhaps, it is not a lack of will, but rather a lack of know-how, or a lack of tools that show where the performance bottlenecks are.
October 6, 2010
A Castle in a Cloud
Nothing in the computing world can compete with cloud computing for the sheer volume of hype. This is because the cloud could be the solution to many problems that annoy eCommerce vendors such as capital expenditures, hardware upgrades, Service Level Agreements, etc. The promise of plug and play eCommerce is immense.
It is a beautiful picture:
· A company contracts with a cloud company for computing resources
· They hire either the cloud company's professional services or an SI like Infosys to do the customization and integration work
· They bring up the site in the cloud's sandbox and test it.
· They launch it and start making money
· They pay the cloud company out of the revenue that they bring in.
· As the site grows in popularity, they increase the resources by paying more to the cloud company.
It is kind of like electrical power. Most of us have no deep understanding of electrical power generation and transmission; we just plug into it and use it.
Before the beautiful picture can become reality, however, we have to solve several potential problems:
· Security - Both financial and personal information must be safeguarded under the laws of most countries. Most companies are very conservative in this area and they would require huge reassurances before letting this information come into or out of their firewall. Perhaps a PayPal-style solution could provide this assurance. The cloud would never actually see any credit card info or personally sensitive data. Your site would send a request for payment to the third-party payment site. The user would trigger the payment back to your site via that third party, either automatically, or manually, as they prefer.
· Level of Service - Clouds are not magic-they are composed of computer and the humans who tend to them. There is a finite computing and human capacity at any moment in time which cannot be exceeded. Suppose demand for everyone's site began to rise in a surprising fashion as often happens at the end of a recession. The cloud company would have to scramble to meet the demand by installing new hardware and hiring new people. One solution might be an alliance between the hardware vendors and the cloud owners. If the hardware vendors were willing to stage, or even pre-install their inventory in the cloud's computer centers, the capacity could be increased by agreeing to pay for the additional computing power.
· Outages - most eCommerce sites tolerate a small amount of downtime because the cost of achieving 100% uptime is so high. When the site goes down, everyone hates it, but they understand the tradeoff. Tradeoffs, however, are not easily tolerated between a customer and a vendor. If a cloud company experienced a protracted downtime, who would be liable for the lost revenue?
· Customization - Ideally, every customization available on a self-hosted platform would be available in the cloud. In reality, limitations are there, and they are likely to persist for some time. A cloud is normally built on a software suite that consists of a set of services that you can call. If you have a great idea for a new service, the cloud vendor may not choose to implement it. If you create it in a custom fashion, it may not perform well enough for the cloud company's taste. Additionally, you may find that the tool provided by the cloud company is not powerful enough to implement all of your ideas.
Where there's a will, there is a way. All of the drawbacks are essentially engineering problems while all of the advantages are business advantages. Where real advantages slam up against engineering limitations, clever people find ways to solve them.
September 22, 2010
Should Search Analytics Drive Online Content?
Deciding what content to serve on your website isn't so much a factor of what you want to sell as it is a factor of what your prospective customers want to buy. The good news is that they are telling you exactly what they want to buy every time they perform a search and wind up on your site. One of the most successful methods of content management I have used is determining the use of online real estate and creative through Search analytics. There is a direct correlation between search strings entered by users, creative messaging of both organic listings and paid listings, related landing page content, and conversion. For companies with a large variety of similar products to sell, and especially for those who sell experiences more so than physical products (leisure, travel, luxury, lifestyle sectors), riding the Search 'long tail' and creating A/B/n scenarios between Creative and related landing pages/page content can yield extremely high profit margins due to the low bid cost and considerably higher conversion rates (I have run these at up to 15%).
So, let's say you've done this for all your products and services, maxed out the long tail and hit the wall on conversion. What now?
I said earlier that customers are already telling you what they want. It is those customers who have searched for something, clicked on your site because they thought you might be able to sell them what they were looking for, and then left because you weren't selling it that we must consider. Search analytics can tell you everything people were looking for when they arrived at your site. Often it is the people who walked away who give great insight into existing demand for something you don't sell, but perhaps should.
The point is, don't just consider how to organize the content you already have- sometimes it is more profitable to create new content, and even products and services, to meet demand. A good Search Analytics Research model can deliver the information to make content related decisions with a very high degree of certainty.
August 30, 2010
Improving customer experience - Virtual Agents
"I do not have the time to call the customer service center in case I do not find the right product. I will switch to some other vendor"
Now all these things point to coming era of good customer service or customer self service.
According to Consumer Technographics, 57% of US online consumers report that they are very likely to abandon an online purchase if they cannot find quick answers to their questions.
For leading companies, Customer self service has become the mantra of success in terms of good customer service. Companies are providing this service through the virtual agents a.k.a smart agents a.k.a Intelligent agents. Customers directly interact with these agents and get their problem solved in lesser time.
Virtual agents are programs that work as real customer service agents solving the problem of the customers in real time. For example, IKEA is using the virtual agent to help customers locate the right set of products.
Leading Web companies are already using virtual agents. SFR, a division of the mobile communications giant Vodafone, employs a virtual agent to answer customer questions about their accounts and the company's services. Online auctioneer eBay is facilitating customer conversations with virtual agents across six countries. Apple recently bought virtual agent company Siri. IBM will soon release an artificially intelligent agent named Watson.
Virtual agents impact the companies and it's customer in variety of ways. Virtual agents as a change initiative can help increase sales by improving customer experience, low abandonment rate and high cross sells. It also helps reduce the live help costs.
It would be interesting to see how virtual agent can really help the customers in providing accurate services similar to the real people. Do you have some more thoughts on what it should do? Please do share it across.
June 10, 2010
The Next Facebook Generation (psst...it has a lot of spending power)
Everyone as a child has at least one moment when they think to themselves, "I will not be like my parents." Although this thought tends to appear in a moment of 'unfair' punishment or discipline of some kind, it does seem to be the beginning of one's fear of growing old. At the extreme, the elderly are described as being 'invisible.' The Pharmaceutical industry cherishes this population, but from a retail industry perspective, I cannot argue against the attitude of invisibility. Gap, Inc. has a brand for every generation of one's life up until the stretches of middle age. If however, there is a huge demographic shift occurring, why is the retail industry not focused on this population?
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June 1, 2010
Next generation Bartering
One day my wife told me that her friend offered her to teach swimming. This was in return for taking care of her aquarium while she was away on vacation. My wife said 'what an offer', to which I said 'what a Barter'.
March 31, 2010
Using TOGAF for eCommerce Projects
March 18, 2010
Online Logistics/Reverse Logistics Marketplace - The concept
Over the last decade the concept of an online market-place and e-commerce have gained all the requisite importance. The way the Logistics/Reverse logistics is handled on a market-place generally depends upon a number of factors including but not limited to the business policy of the Marketplace. For e.g consider a marketplace which takes care of your deliveries if you are a seller, and you returns if you are a customer. The way this would work from an e-commerce perspective would be as follows: 1. A seller would create shipments on a front-end system and on requesting a carrier to collect the same - the Marketplace carrier would collect and deliver the product to the customer address. 2. A Customer would create return parcels on a front-end system and on requesting a carrier to collect the same - the Marketplace carrier would collect and return the product to a return address.
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March 12, 2010
flip-flop-flit
I have always been advocating the point of providing physical store experience over the online stores. The idea is to provide great usability experience. A customer entering the stores normally looks after the labels and gets the product. He might flip- flop through various brands within the store.
February 16, 2010
Knowing the Customer
Much has been written about the need for customer understanding and indeed, customer intimacy. We hear from all quarters about how we need to know who is buying our products, in what combinations and why. We can then target our marketing at them with a laser-like focus providing them with offers and information that will be interesting to them. This benefits the customer by reducing the amount of marketing that we are sending them and saves money for the organization by reducing the total number of marketing items.
Growing out of ecommerce packages
Most of the large retail enterprises start multi channel commerce transformation initiatives with a strategizing and package evaluation phase - the idea being that the selected ecommerce package would act as the center pin of their multichannel strategy. But is it really about the package or is it about what is done over and above to what the package provides that really matters?
November 13, 2009
Mobile Momentum – What’s the Hold-up?
Every retailer in the eCommerce world is excited about the prospect of interacting with their customers via mobile devices like iPhones. They dream of the day when a customer places an order using an iPhone app, then drives by the store to pick it up. They envision their customer creating a shopping list, pushing a button, and getting an ordered pick list mapped to the layout of their local store. They also want to create an item-Finder where the customer walks into the store, enters an item description on their phone and gets an aisle and shelf location for that item returned to them on their screen. They would love for their customers to be able to access product reviews, video demonstrations and detailed specifications from their mobile device so that the purchasing decision could be made on the spot, even for expensive items like cameras and TV sets.
September 30, 2009
Why is my Web Site Slow - Part 2
In my last posting, I talked about the impact of requirements on performance. Another reason for the slowness of Web sites is the number of moving parts that could be performing poorly. Let’s look at the most important components in your customer’s Web experience:
September 12, 2009
Why is my Web Site Slow?
This is a question that I hear frequently. Everyone seems to recognize that a quick response time is the ultimate feature, but very few people understand all of the factors that can harm performance. In this series of blogs, I will try and shed some light on the different factory that combine to determine your site’s ability to perform. In this blog, we will discuss the impact of requirements on the overall performance of the site.
I saw a cartoon some years ago that showed a businessman frantically searching for a lost item in a room labeled “Testing”. Another character walks up and asks, “What are you looking for?” “Site performance”, the searcher answered. “Where did you lose it?”, asked the visitor. “In Requirements”, he answered. “Then why are you looking for it in “Testing?” He answered back, “The light is better here”.
June 6, 2009
The Proliferation of Third Parties
In the early days of eCommerce development, the world was a simpler place. You created the user experience, configure the payment servers, set up the fulfillment channels, and turned it on. The browsers were fairly simple HTML rendering engines that took what you sent it and drew them on the screen. You could control the user experience by tuning your servers to deliver the resulting HTML quickly.
Fast forward to today. It is not unusual for a modern eCommerce site to use twenty-five or more third party sites. These sites help to satisfy both the non-functional and functional requirements. For example, an eCommerce site needs to know how many shopping carts are being abandoned, how many orders are being placed, how many pages are being accessed, how often certain pages are being viewed, etc. Enter Web Analytics vendors. You place a JavaScript snippet in your important pages and there you have it. Do you need to understand the detailed performance of your site’s pages? Just add more scripts that send data to a Web Performance Company. Do you want to provide consistent performance in spite of the geographical location of your customers; you need a content delivery network. Do you want to sell travel, conduct auctions, sell credit cards and gift cards? There are services for all of these.
April 22, 2009
Build, Buy or Outsource - the Retailers Online Commerce conundrum....
Over the last few years, this subject has preoccupied the management at the all Retailers world over. There are significant benefits & drawbacks in each of the options which I cover in the following sections. Initial thoughts during the early days of online commerce has been around how retailers can control their destiny by creating a site that they could manage & control. Alternate options were considered surrounding how this could be outsourced to a MSP (Managed Services Providers) who could start with the construction of the web site and manage the entire commerce lifecycle from site to Order capture to Fulfillment within a short turnaround cycle. The recent trends have been to move towards a packaged implementation where there has been a significant progress made by a few leading vendors.
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April 17, 2009
Key Roles in an eCommerce Development Project
Creating the correct management roles in an eCommerce project is a critical step when embarking on a new site ( or a replacement for an existing site). If you consider that a typical retail site will contain 50,000 item numbers(skus), take 10,000 orders per day and interact with 75-100 external touch points to legacy and third-party systems, you will see how complex the project can get. The management of this complexity is a challenge, especially if no one on your team has been through this before (and only a few people have).
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February 16, 2009
The First Step
It is easy to agree with the need for a performance model, but how do you build one. Here is one approach that is suited for a transactional site:
February 12, 2009
What was that all about?!! - Thinking about The Acquisition Funnel and Conversion Rates – Part II
This post is Part II of a series that discusses the online customer acquisition funnel and how to improve conversion rates. The customer acquisition funnel is a construct that helps visualize the junctions at which an online portal looses the attention of a visitor.
A side note about online shopping cart abandonment… Wouldn’t it be interesting if people behaved the same way in a real store as they do online? I could imagine people at the grocery store piling a basket high with goods and then for whatever reason just ditching it in an aisle and then running out the store. Most cases one would think, “What was that all about?!!”. That’s pretty much what happens in the E-Commerce world, whether it is shopping cart abandonment or at the landing page.
In this post I will be talking mainly about landing pages. Landing pages are the first thing that a user sees when they access your portal. This might be your main page, or if you are savvy, it might be a personalized page based on the traffic driver that brought the user to the site. As a general rule of thumb, you have about 3 seconds to grab the user’s attention before they decide to click the back button. In analytics terms, the rate of ‘back button pushing’ is called the landing page bounce rate and is defined as (Visitors who leave on landing page) / (Total visitors to landing page).
Ideally, you would want to have a landing page bounce rate associated with each “high traffic” landing page on your website. This allows you to get a picture of not only which landing pages are working but which traffic drivers are driving qualified visitors to your site who are interested in the products you are trying to sell. However, in order to disambiguate the influence of each factor on the bounce rate, it will take a little analytics.
Landing page optimization can loosely be categorized into two classes: 1) Subjective optimization based on design, usability or other bases such as our perception of the users intended goals; and 2) Mathematical optimization based on analytical models and behavioral data. The most powerful landing page optimization schemes utilize both simultaneously.
I have always found the mathematical optimization portion quite interesting because it allows you to test several different design scenarios on a population of people. This can produce some very interesting results as populations of human beings can sometimes behave in unanticipated ways. For instance, you might find that increasing the size of the title font from 16 to 18 on the landing page decreases the bounce rate by 5%. Does it make any sense? I say no, but it is sure easy to conjecture some reason after you have the answer!
The best way I have found of performing these types of mathematical optimizations is through multivariate statistics. This class of statistics differs from split A/B testing, which is the testing of two different scenarios during a single experiment, in that it allows you to test multiple variables at one time without a huge magnification in the number of behavioral samples you need to capture. For instance, you can test the title font height, background color, header image and body text in a single experiment. Simply speaking, strict A/B testing would require four separate experiments.
The combination of subjective landing page optimization with mathematical optimization allows you to finely tune your landing pages to decrease bounce rates. It also allows you to disambiguate the influence between a traffic driver and the actual landing page on the bounce rate. If you then perform these optimization exercises on all of the high-traffic landing pages, a picture begins to emerge as to which design elements are working, which ones are not, which audiences need to see what content and how to best capture their attention. This then sets you up for being able to personalize content and user experience based on the traffic driver source and other user specific incoming information.
Since the landing page is the first and largest junction in the ‘Acquisition Funnel’, changes as small as a percent in bounce rate can have dramatic effects on the downstream number of visitors who become engaged in the site. I can’t stress enough how important it is to get a landing page optimization program in place and get it done correctly.
February 2, 2009
Indian Railways - Epicenter of Indian Online Travel Industry Revolution
In the past year, online travel industry faced a lot of challenges globally but amidst all this the best thing that has happened to the Indian online travel industry was the opening of railways reservation APIs by Indian Railways. Currently, OTA (online travel agency) business in India is expected to be approx. $800 million and depends largely on air travel related transactions. Till now, Indian Rail Catering and Tourism Corporation (IRCTC) was the only provider for online train ticket bookings in India but with the Railways opening its inventory for private players this space is ripe for some huge changes this year.
Why this move by Indian Railways is noteworthy?
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December 23, 2008
Web Analytics – Year 2008 in Retrospection
I love to read predictions made at the beginning of the year and look back at those predictions at the end of the year in retrospect. Click here to take a look at what people were talking about web analytics at the beginning of this year.
As we approach end of the year 2008, I have put together a timeline representation below to give the readers a snapshot view of the key developments in the area of Web Analytics and the direction taken by key players in the industry in the past year. I have tried to provide references wherever possible but this post can be best received if you are familiar with the Web Analytics market dynamics.
(For the benefit of the readers the links for each of these announcements are provided at the end of this post)
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November 22, 2008
Going Live: A White-Knuckle Experience
If someone were to write a book called “Great eCommerce Site Launches in History”, the book would be very thin. With few exceptions, the replacement of an existing eComm Platform with a new one is a wild ride filled with crashes, slow-downs, time-outs, and roll-backs. In this post, I will discuss the source of these bad experiences, and how to improve the situation on your next project.
Early in the project, the team is focused on gathering the requirements, creating the customer experience and designing the back end connections to the legacy systems. “Going live” seems safely in the distant future, and gets very little attention up front. As a result, the deployment is handled by a team that is exhausted from the push to finish the coding on time. Errors are made and sites crash. Revenue is lost, managers are embarrassed, programmers are stressed out, etc. There has to be a better way.
November 5, 2008
A new Beginning for Obama?
With the polls now shut, votes counted, and electoral college votes apportioned, we now have a new President-Elect in the U.S. It is a historic moment watched by all around the world, and as the previous blog entry discusses, it is one where the internet has played a pivotal role - in campaign funding, debates, electoral registration and voting. The new President-Elect will be tasked with implementing his programme as quickly as possible to harness this landslide win. However, it is easy to get lost in the detail, and this is where the parallel for MCC deployments is apt. While a grand plan and key actions are key, the devil will truly be, "In the detail".
October 6, 2008
Thinking About The Acquisition Funnel and Conversion Rates
Conversion rates are often on the forefront of the mind when operating a website. In the simplest of models, increasing conversions can be lumped into those that increase the total number of visitors making it to the point of conversion and those that increase the conversion rate by increasing the probability that a visitor completes a transaction. Ideally you would like to increase both simultaneously. A useful way to look at and diagnose problems related to web conversions is through an acquisition funnel model. This is the first post in a series that will be discussing this model in the context of a generic eCommerce site.
The acquisition funnel model analyzes the macro behavior of visitors from the traffic drivers that brought them to the site up until to the transaction conformation page. The premise is that at each stage in the model is associated with a probability that the visitor will leave the site or effectively not complete a transaction. Thus the total conversion rate can be approximated by a multiplicative function whose variables are the individual probabilities of each stage in the funnel. Although this does assume independence between the events that caused the visitor to leave the site or abandon the transaction it overall offers a reasonable approximation.
The first stage of the acquisition funnel examines the relationship between traffic drivers and how effectively the website encourages visitors to stay on the site past the landing page. This critical step affects not only the total volume of visitors browsing further into the website but also is a direct factor in influencing the effectiveness or cost per visitor to the site.
An effective means of optimizing the cost per visitor and marketing spending is to link an individual traffic driver to the probability that a visitor will engage with the site. This probability is typically referred to as the “bounce” rate on a landing page. This allows one to correlate the effectiveness of a marketing campaign directly to the cost per click. It also can be fashioned into a marketing effectiveness dashboard to clearly denote which campaigns are working and bring attention to those that are not. Common reasons for high bounce rates typically include an inconsistent user experience and/or content that differs greatly from the users expectations when they clicked on the advertising link. Tracking a specific traffic driver all the way through conversion can also be useful to understand the quality of visitor that a specific traffic driver is bringing to the site.
In my next post, I will be discussing landing page optimization in the context of the acquisition funnel model.
September 16, 2008
User-Generated Requirements - Part I
A few weeks ago, I was talking to a friend of mine who is employed with one of the leading web portals in the world. Besides discussing other things, our chat ventured into the realm of customers, how to work with them better and what has changed in requirement extraction in the recent days, etc. One thing lead to another and not long into the conversation, my friend threw in an interesting statement – “Its relatively easier for us, we have got just one customer – our own company”. There was something odd about this statement that was making it hard to digest but I could not pin point it for a few minutes. When my thoughts caught up with me, I replied –“Hmmm, instead of just one customer, shouldn’t the whole world be the customer for you? After all, your apps are used by the whole world and I am sure a lot of people out there have ideas of about how to make them better. How can a bunch of business analyst think on behalf of the whole world and draw requirements for you?”
September 15, 2008
Your Site's Performance
It is finished. After months of working weekends, you are finally ready to go live. The bug list is now short and manageable. You have done your performance testing and you are good to go. You go live with the redesigned site, breathe a sigh of relief and book tickets to the Caribbean. Then something happens. Support calls are spiking. It seems that your customers are complaining about the speed of the new site. The calls are coming mainly from customers in Ontario and in Florida. Your boss has been called in to the CEO’s office and gotten chewed out. He comes to see you with a stressed-out look on his face. He isn’t yelling but …
June 18, 2008
Flying Blind
I am often called upon to review a design. The first things that I ask for are the performance goals and the scaling assumptions, often called the Load Model. More than half the time, they don’t exist, or they are pure fantasy. (I have heard business types specify sub-second response and infinite scalability.) The Load Model tells us how many transactions, page hits, orders, etc. a system will be experiencing per unit of time for a certain number of years in the future, often the next 5 years. This table or graph will determine the type of design that you have to create. Without it you are “Flying Blind”. For example, if you are told that you will have 45 orders per hour at peak then you have any number of ways that a system could be built. In fact, almost any design can handle such a light load. On the other hand, if you are told that you will have 45,000 order per hour you will have to examine every aspect of the design to detect bottlenecks as quickly as possible. Many times, no one really knows what the load numbers will be. Often, the business people will try to pawn the estimation off on the technical people. Resist this! You must make the business people take the bottom line for this. If you don’t, you will be accepting the risk that the business people are paid to accept. If you create the Load Model yourself, you will be ultimately responsible for its correctness. This is especially important when the load is unknowable. In that case, the business must pick a number out of the air. Once picked, you should ensure that everyone agrees to design to it. Later, if your approach is correct for the assumed load, but incorrect for the actual load, you will be able to defend the design.
April 18, 2008
eCommerce Engineering is Hard
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