Conversion Rates 2011 – Nothing’s Changed

Econsultancy has just released its Conversion Rate Optimisation Report for 2011, and sadly the rates are still stuck around 2% to 3%. The same as they’ve been for the past decade and more.

So Econsultancy asks the question: “...why are conversion rates not better than they are?” and it suggests it’s “...because conversion rate optimization is complex.”

I disagree.

While conversion rate optimisation undoubtedly takes work and discipline, it’s not like we don’t know what to do.

Leading Conversion Rate Optimisation consultants such as Bryan and Jeffrey Eisenberg, Tim Ash, Steve Krug and others have been proclaiming the techniques and benefits of conversion rate optimisation since the 1990’s.

Yet marketers and businesses still do almost nothing about it.

Why? Read on...

As Econsultancy notes, Forrester Research estimates for every $100 spent on driving traffic to websites, companies spend only $1 converting that traffic into business.

And this is backed up by further research from, Omniture, which points out that the industry spends nearly $25 billion on getting people to a site, but only $250 million on site optimisation.

See my previous post: Online Marketers Still Clueless

The conclusion is inevitable:

Online Business Simply Isn't Interested in Conversion Rate Optimisation

If you look at where the money is being spent, then clearly the industry as a whole just isn't interested.

The money doesn’t lie.

If the industry were seriously interested in optimising conversion rates, then the graph would be very different.

You can't argue with the scoreboard. It hasn't changed in over a decade.

While I’m tempted to call this insanity, there are several deeply entrenched reasons for this ongoing poor state of affairs.

Firstly it is really no different than what happens in the offline world. Fortunes are spent on advertising while very little is spent on doing the hard work that will really make a difference to a company’s marketing performance.

That's just human nature, we're always on the make for a quick fix or get rich quick scheme.

Secondly, the web by its history and its nature is a technical beast. As a result the industry naturally gravitates towards technical processes and solutions. Conversion rate optimisation on the other hand is a much more psychological practice.

As the neuromarketing crowd has taught us, human beings are a highly emotional and irrational lot.

Read Dan Hill, Dan Ariely, Sally Hogshead for more on how lust is a more powerful motivator than slick coding.

As such, many in the online marketing and business field simply don't have the right personality type and mental skill sets to properly take on conversion rate optimisation.

Thirdly, there is a lot of vested interest in preserving the status quo. Clearly at over $23 billion there is a lot of money at stake, and a lot incentives and commissions are used to encourage marketers to continue to use the less effective forms of marketing.

Conversion rate optimisation is a direct threat to the revenue stream of the online advertising industry.

What Online Marketing Needs to Learn from Master Chef

TRY THIS ANALOGY: Imagine driving hundreds of people to your restaurant and then giving them a lousy experience. None of your customers would ever come back, and word of mouth would kill the business.

No amount of advertising would ever overcome that, especially in this social age.

Thankfully good restaurants don’t work that way. They get the food right first, they are passionate about the food, then they focus on decor and creating a great atmosphere, followed by staff training etc. And they spend big money on it. Then they worry about getting people in the door.

Creating a great experience is a key part of their marketing strategy.

Online marketers could learn a lot from good restaurants.

Smart Marketers Know the Secret – But No-one’s Listening

A few smart online companies do focus on creating a great online experience. As I’ve noted many times in this blog, some are getting online conversion rates of 40%, 60% and incredibly even 80%from their websites.