15 Jan 2015

7 Reasons Why Your Conversion Rate Is Down (Or Up!)

In an industry of increasingly complex data, the ability to quickly and accurately diagnose changes in your website’s conversion rate is immensely important. While there are thousands of specific and unique causes for your conversion rate to either decrease or increase, almost all can be boiled down to a few common themes.

The following causes are in no particular order in terms of likelihood or severity, and it’s important to understand how each can influence your website’s performance, both alone or in conjunction with multiple factors.

Factors that Drive a Change in Conversion Rate

Website Change

While a best practice is to always split test your website to improve conversion rate, site changes are frequently rolled out for purely cosmetic purposes, without a second thought about its impact on conversion rate. It’s a safe bet to assume that any change to your website will impact your conversion rate, either positively or negatively. If a site change will not be A/B tested, the date should at least be marked in your analytics package for future comparison.

Pricing Change

This may seem obvious but changes to your prices can have a major impact on conversion rate. A good example is an Ecommerce retailer, operating in a competitive vertical. It’s not uncommon to search for a product and find 10 Ecommerce retailers all selling the same product. Because of all the great comparison shopping engines available to consumers, price shopping is easy and your price is important. Certainly, changing your price from the most expensive to least expensive will have a major impact on your conversion rate.

In a similar light, promotions and sales will have a major, positive impact on conversion rate, while the end of those sales will likely correlate with a decrease in conversion rate.

Competitor Change

While competitor changes can be a bit more difficult to diagnose, major changes can absolutely have an impact on your own conversion rate. This is especially true in industries where customers do a lot of comparison shopping and may visit not only your website, but your three main competitors as well. Competitor changes that may negatively impact your conversion rate could be pricing changes, but they don’t have to be.

Google Shopping Same Product

Seasonality

Seasonality affects every business. Understanding your business’ seasonality is a critical component of any and all website performance analysis and should be taken into account for all marketing efforts. Seasonality could be a busy season, like the holiday shopping season, or it could be day-of-the-week specific, like a B-to-B service provider that sees lower conversion rates on weekends.

Below is a sample of an Ecommerce retailer’s seasonality, which has a small peak during the Spring, gradually declines through the summer and fall, and rapidly peaks and drops off during the Holiday shopping season.

Conversion Rate Seasonality

Being able to accurately forecast not only when seasonality will occur, but also the severity of those rises and dips in conversion rate, is a critical aspect of any PPC analysis. Comparing prior year’s seasonal data is a great way to gain insight into performance trends for the coming year and will help considerably with forecasting.

Traffic Source Change

While, at a glance, your site wide conversion rate may increase or decrease, what has actually happened is that your traffic sources have changed.

For example, in the table below it appears obvious that conversion rate has dropped dramatically during Period #2:

Conversion Rate Change Overview

However, upon closer inspection via the table below, conversion rate by source hasn’t actually changed at all.

Conversion Rate Change Breakdown

Although site wide conversion rate appears to have dropped off, this is simply a case of the traffic source changing from one period to the next. In period #1, Search traffic was responsible for 50% of overall traffic but in Period #2 only drove 25% of the traffic. As you can see, on a source-by-source basis, conversion rate remained unchanged.

Ad Copy Change

A conversion typically occurs when a website visitor’s expectations are met or exceeded by the site content. A critical piece of that equation is the visitor’s expectations, which are set prior to ever landing on the website. Changes to ad copy messaging that shift visitor expectations will likely result in changes in conversion rate, as the fundamental visitor mindset has been altered.

Tracking Issues

If a change in conversion rate seems unnatural, taking 5 minutes to ensure your tracking is installed properly can save you hours trying to explain why conversion rate dropped 50% overnight. Anytime a change in conversion rate seems too extreme to be believable or seems completely random (a huge spike beginning on a random Tuesday night), it’s best to run a quick tracking test.

There are undoubtedly other possible causes for the ebbs and flows of conversion rate, accurately diagnosing a change, even with a short list of 7, can prove to be difficult as there can be multiple forces occurring simultaneously. For example, when an Ecommerce site’s Cyber Monday promotion ends, many forces are working concurrently.

  1. Website change
  2. Seasonality
  3. Pricing change
  4. Ad copy change
  5. Possible tracking issues

While it is expected that conversion rate will decrease following Cyber Monday, the busiest online shopping day of the year, there are a number or factors that could also be causing an issue. Ultimately, understanding how and why your conversion rate changes will provide you with a better understanding of your customers and understanding your customers will provide a better understanding of how and why your conversion rate changes.