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You are here: Home » Interactive Optimization and Analytics » Mastering Online Conversion » Defining Online Conversion: The Multi-Channel Component

March 11, 2007

Defining Online Conversion: The Multi-Channel Component

Online conversion is not only the result of online activities. Rather, the conversion process can be initiated by an offline channel, such as direct mail, catalog, flyer, TV advertising, mobile, print advertising and even radio advertising ... or even prompted by brand or retail.

On the other hand, the conversion doesn't really need to happen online, but it could happen in a physical retail store, over the phone or even using a mobile phone.

Consequently, measuring and optimizing conversion for multi-channel merchants, as well as for B2B marketers, where conversion is most often achieved in a live meeting, is a complex issue.

What Initializes Conversion?

Why do we even care which channel initiated the conversion?

  • Optimizing for the Source Consumer
    Different sources of conversion always generate different results. A TV customer will convert at a different rate than a catalog customer, and an SEM customer will convert at a different rate than a print customer. The point is, each source of traffic delivers a different type of prospect. Being able to tailor the on-site experience to these different types of customers impacts our sales success.

  • Optimizing the Source
    By measuring the conversion, and naturally sales, per source of conversion we are able to directly attribute revenues to that source. That allows us to optimize both the source (advertising) and the conversion touch-point (website). It allows us to evaluate each source, decide whether that source is performing according to our standards, and in the end helps us optimize our ad spend by channel.

So far so good. But it gets even more complex.

Imagine this scenario:

  • TV advertising generated demand for our product.
  • But instead of going to our website, the consumer goes to Google and does a search for a phrase he remembers from the TV ad.
  • Google delivers him to our website, where he does not make a purchase, but rather subscribes to our e-mail e-zine.
  • Our new subscriber then receives 5 more e-mail e-zine issues, before deciding to make a purchase.
  • But instead of coming directly to our website from the e-zine issue to make the purchase, he again uses Google to visit the website.
  • He finally ads the product to his shopping cart, but then changes his mind.
  • Because we already have his e-mail address and have identified an abandoned shopping cart, we initiate an abandoned shopping cart e-mail program.
  • After 3 follow-up e-mail messages from the abandoned shopping cart e-mail program, the consumer finally completes his purchase and converts.

Or in graphic terms ...

This isn't a sci-fi scenario, but rather a reality we're seeing in our webstores every day.

For example, in my own experience I'm finding that in our case e-mail e-zines don't convert the majority of subscribers directly, but rather facilitate the conversion indirectly. Subscribers receive the e-zine, which builds their trust, builds demand and gets them ready for the purchase. But when making the purchase, that same subscriber still enters the website through a Search Engine.

While looking at the conversion from this complex viewpoint does present difficulties, it simply needs to be done.

Just take a look at the number of steps outlined above. Each of these steps represents an optimization opportunity, enabling you to further increase sales. And every step also represents a threat that decreases conversion.

But in addition to the question of how to measure this process, the next logical problem is how you actually attribute conversion to the appropriate channel. It is clear in this scenario that TV started the process. So while each of the following steps assisted in achieving the conversion, the TV advertising needs to be attributed for starting the sales process.

The problem here is that the above scenario is really a simple one. In a multi-channel environment, the paths are much more complicated and can shift from channel to channel, including offline channels, before the purchase is concluded.

Also in many cases it will be difficult to establish the initial channel that started the sales process. If for example you're conducting a full-scale offline campaign through TV, print, outdoor and radio, all at the same time, all of these media will generate online search, consequently making it impossible to determine from which media exactly the prospect came.

Furthermore, we must not forget that an offline media cannot be taken out of the equation once the sales process has already started. Even while the consumer is receiving our e-mail campaigns, he may be exposed to our offline advertising, further facilitating the purchase decision.

Where Conversion is Achieved?

As if measuring the impact of various sources of traffic and conversion were not enough of a challenge, we also need to take into account that the conversion can be completed using an offline channel.

  • Many website visitors will make the purchase through your call center, using the phone number on your website.
  • Multi-channel merchants with their own retail stores or even with retail partners will often see the conversion happening in the physical store.
  • A website visitor may order a print catalog from your website, and then make the purchase using the phone number in the catalog ... or go back to the website and make the purchase there.
  • In B2B, online will often generate the lead, which will then be processed in-person by live sales reps.

Unfortunately we can never expect to be able to measure the multi-channel environment with 100% precision, but we certainly can get close enough.

What we have to understand though is that measuring multi-channel conversion is not a one-time deal, but rather a long-term process that will slowly enable you to increase measurement precision.

We will return to these issues in more detail in many of the future posts on this blog.

Comments

Being a media buyer, I naturally have many questions for you regarding the statements you have made. I have tracked multi-level campaigns before and the hassle is almost always more than trouble that its worth. For example, I ran a television, billboard, newspaper and internet campaign for a client whose 1800 number marketers asked where the customer heard about our ad. Nearly 75% of them said they heard our ad on the radio! And Im being serious. Then when the campaign got stale and I mixed it up a bit by taking out the overpriced newspaper ads and adding in the radio, customers started saying they saw us in the newspaper. How do you account for the true cause of the conversion when the cause does not even exist? I had another client who was extremely angry because he was paying a lot for radio advertising and he was tracking his conversions and it seemed that NONE of them came from radio. But we dont know that for sure. A customer could have heard it on the radio and then looked it up in the phone book or got the ad in the mail. I have no way of tracking that, especially when some of the media theyre referring to does not exist. What would you suggest for getting around this type of egregious error?

Posted by: Online Shopping at June 13, 2007 6:25 PM

Being a media buyer, I naturally have many questions for you regarding the statements you have made. I have tracked multi-level campaigns before and the hassle is almost always more than trouble that it�s worth. For example, I ran a television, billboard, newspaper and internet campaign for a client whose 1800 number marketers asked where the customer heard about our ad. Nearly 75% of them said they heard our ad on the radio! And I�m being serious. Then when the campaign got stale and I mixed it up a bit by taking out the overpriced newspaper ads and adding in the radio, customers started saying they saw us in the newspaper. How do you account for the true cause of the conversion when the cause does not even exist? I had another client who was extremely angry because he was paying a lot for radio advertising and he was tracking his conversions and it seemed that NONE of them came from radio. But we don�t know that for sure. A customer could have heard it on the radio and then looked it up in the phone book or got the ad in the mail. I have no way of tracking that, especially when some of the media they�re referring to does not exist. What would you suggest for getting around this type of egregious error?

Posted by: Online Shopping at June 13, 2007 6:26 PM

I noticed that you mention about the use of number stated in some merchant�s web site. I�m someone who is very dependent to the Internet and my credit card. Most of the time, I shop online and when I happen to see one item that�s really mouth-watering I�d pick up the phone and dial the number stated in the website. There was one time when I dialed a number hundreds of times because the item I saw from them was really hot. But nobody was answering me. I tried calling it at around off-peak hours but still I didn�t get any reply. Weeks passed by still I didn�t get anyone to pick up the other end of the like. So, I had to give up and search the Internet hoping that I could find something better. Several weeks after that, I saw a forum with someone probably working for this site doing some advertising. The person is promoting a sale from that site and directing the interested visitors to their site through that same number I dialed. I couldn�t contain myself so I had to give him a reply telling him that there�s no one in that phone number he�s giving.

What I�m trying to say is call centers or numbers stated in one�s site can be at its most effective status in terms of traffic and conversion if it�s really working. We cannot deny the fact that some merchants offer fake phone numbers for some reason or two. Therefore, it�s not all the time that this thing can be a good measure for traffic or the likes.

Posted by: Anniversary gift at July 5, 2007 5:25 AM

I noticed that you mention about the use of number stated in some merchants web site. Im someone who is very dependent to the Internet and my credit card. Most of the time, I shop online and when I happen to see one item thats really mouth-watering Id pick up the phone and dial the number stated in the website. There was one time when I dialed a number hundreds of times because the item I saw from them was really hot. But nobody was answering me. I tried calling it at around off-peak hours but still I didnt get any reply. Weeks passed by still I didnt get anyone to pick up the other end of the like. So, I had to give up and search the Internet hoping that I could find something better. Several weeks after that, I saw a forum with someone probably working for this site doing some advertising. The person is promoting a sale from that site and directing the interested visitors to their site through that same number I dialed. I couldnt contain myself so I had to give him a reply telling him that theres no one in that phone number hes giving.

What Im trying to say is call centers or numbers stated in ones site can be at its most effective status in terms of traffic and conversion if its really working. We cannot deny the fact that some merchants offer fake phone numbers for some reason or two. Therefore, its not all the time that this thing can be a good measure for traffic or the likes.

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