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

March 1, 2007

Defining Online Conversion: The Process Component

As far back as 2001, Bryan Eisenberg of GrokDotCom broke down conversion rate measurement and optimization by action type:
[BTW - check out Bryan's optimization e-books, which are an amazing resource for online optimization]
  • Macro-actions
    The macro-action constitutes a complete action performed by the subject, such as finish a purchase, download a whitepaper, subscribe to an e-zine, register at the website, become an affiliate, recommend the website to a friend and so on. This is the big action you want your subjects to take.

  • Micro-actions
    Micro-actions are a series of smaller actions or steps that need to be taken by the subject to complete the macro-action. For example, the complete a purchase macro-action might constitute of the visitor viewing the product page, adding the product to the shopping cart, entering his shipping details, entering his credit card and confirming the purchase. 5 small steps needed to complete the big step.

Bryan argued that each micro-action is a potential leak, where you might be losing macro-actions. By measuring the conversion only at the macro-level marketers are missing the real optimization potential of the website, since in order to optimize the macro-action conversion, you first need to optimize the micro-level conversions.

Consequently it should be clear that measuring just the macro-action conversion rate won't take you far enough. You need to start measuring and optimizing on the micro-level.

Now, to better understand this concept and to add a third dimension, let's take a quick look at a model I've been presenting at seminars in Europe for a few years now: Internet Processing.

This is also the model I've tried to implement in any company I worked with, with varying success, since fully working under this model requires alot of measurement and optimization. But not to worry, you can also implement very basic variations of the model, which don't take that many resources.

Quick Internet Processing Overview

Internet marketing is a process, not an activity. Hence, measurement and optimization cannot take place only on a single activity level, but should be done for your entire internet marketing process.

I'd need alot more space and time to really explain all the aspects of this, so we'll just take a look at the simple version right now.

Internet Processing consists of five distinct elements:

  • The Macro-Process
    The macro-process is your complete internet marketing process that takes an uninterested internet user (who still needs to belong to your target audience, of course) through a series of steps (micro-processes), which on the long-term aim to convert that internet user into an evangelist for your company ... or any other status you wish to ultimately achieve with that user.

  • Micro-Processes
    Micro-processes are the smaller steps needed for the user to reach your desired status. Each micro-process step changes the status of the user to a higher level. A micro-process can also be understood as a macro-action, but I'm using the term micro-process because each micro-process consists of a series of smaller steps needed to complete the process cycle.

  • Micro-Actions
    Micro-actions are the smallest steps needed for the user to complete the micro-process. These micro-actions are the same micro-actions as discussed above.

  • Macro Elements
    Macro elements are the various campaign types you are executing to get the user from one status to another. These are your input activities that influence the user. Examples include e-zine publishing, e-mail sales campaigns, advertising campaigns, search engine marketing and so on. E-zine publishing in this case would be a macro element.

  • Micro Elements
    Micro elements are individual campaigns that you're executing. For example, if e-zine publishing is one of your macro elements, an individual e-zine issue would be a micro element.

Consequently, Internet Processing demands that you measure your conversion and optimize it on each of these five levels. Today we'll just take a look at the 3 parts that are most important for conversion rate measurement, and leave the details of the model for a later time.

Macro-Process

Imagine the macro-process as a sequence of all of the big steps you need to complete with a user to reach your ultimate goal, converting him from one user status to another.

The macro-process will be different for every company, based on your internet marketing strategy. The macro-process needs to support the strategy.

Let's take a look at a quick example:

The image represents an overall macro-process, with the boxes representing the micro-processes within the macro-process, and the lines showing the current status of the user.

When measuring the macro-process conversion, you are measuring your conversion of getting the user from one stage to another, as displayed here:

For example, the 10% conversion rate from first-time visitor to e-zine subscriber tells you that 10% of your first time visitors are converting into e-zine subscribers. And then, 10% of your e-zine subscribers are converting into loyal subscribers.

What happens if we add some numbers?

  • Internet users reached: 100,000,000
    (our online advertising campaign)

  • First-time visitors acquired : 10,000,000 [10%]
    (the number of visitors we received from the 100,000,000 users reached at a 10% first-time visitor/internet user conversion)

  • E-zine subscribers: 1,000,000 [10%]
    (the number of e-zine subscribers we converted from the 10,000,000 first-time visitors at a 10% conversion rate)

  • Loyal subscribers: 100,000 [10%]
    (the number of loyal subscribers we generated from the 1,000,000 e-zine subscribers at a 10% conversion rate)

  • Customers: 11,000 [10% & 0,01%]
    (the number of customers we converted from the 100,000 loyal subscribers at a 10% conversion rate, and the 1,000 customers directly generated from first time visitors at a 0.01% conversion rate)

  • Satisfied customers: 1,100 [10%]
    (the number of satisfied customers we generated from the 11,000 customers at a 10% conversion rate)

  • Loyal customers: 110 [10%]
    (the number of loyal customers we generated from the 1,100 customers at a 10% conversion rate)

  • Affiliate partners: 11 [10%]
    (the number of affiliate partners we converted from the 110 loyal customers at a 10% conversion rate)

  • New first-time visitors from our affiliate partners: 1.1 [10%]
    (the number of new first-time visitors we received from our 11 affiliate partners at a 10% conversion rate)

Micro-Process

Now, to understand the power of this model for optimization, consider what happens if you increase your overall conversion from first-time visitors acquired to e-zine subscribers acquired, keeping all the other numbers the same.

Let's say that you manage to increase this conversion to 30%:

  • Internet users reached: 100,000,000

  • First-time visitors acquired : 10,000,000 [10%]

  • E-zine subscribers: 3,000,000 [30%]

  • Loyal subscribers: 300,000 [10%]

  • Customers: 31,000 [10% & 0.01%]

  • Satisfied customers: 3,100 [10%]

  • Loyal customers: 310 [10%]

  • Affiliate partners: 31 [10%]

  • New first-time visitors from our affiliate partners: 3.1 [10%]

Instead of 1,000,000 e-zine subscribers you now have 3,000,000, and this eventually converts to 30,000 customers as opposed to 10,000 customers ... just by optimizing your e-zine subscription process.

It needs to be admitted that this demonstration is taking a much to simplistic view of the conversion process, but it should be enough right now to show you the power of taking an overall look at your internet marketing process.

But, in order to get this kind of increase, you actually need to optimize the lead generation micro-process, which in this case is also 10% when we start with it.

So, we need to take a look at the lead generation micro-process:

What does this process tell us?

  • 50% of first-time visitors clicked on the whitepaper banner, which eventually leads to the e-zine subscription
  • 90% of these entered their e-mail address on the first step
  • 40% of these entered the additional required information to register
  • 56% of these confirmed their subscription
  • In total, 10% of first-time visitors completed the lead-generation micro-process to convert into an e-zine subscriber

To optimize this micro-process to achieve the increase of the e-zine subscriber/first-time visitor conversion rate to 30%, we have two optimization routes, and one of them takes place on the overall micro-process level.

The simplest thing to do --> remove the confirmation micro-action:

By removing the confirmation micro-action, the total conversion rate for the lead generation micro-processes jumped to 18%. This is optimization on the micro-process level.

Micro-Action

The other optimization route is optimizing the actual micro-actions that form the micro-process, for example optimizing the whitepaper banner in such a way that a higher % of first-time visitors take notice of it and click on it.

At the same time, we optimize the field for entering additional information, perhaps removing some required fields to make things easier for our visitors.

  • 60% of first-time visitors now click on the banner.
  • 80% of these enter their e-mail address. As you will notice, this decreased from 90% from the previous example, since the more attractive banner generated more clickers that really weren't that interested in going forward once they saw what it's about.
  • 63% of thee entered the additional information and completed the lead generation micro-process.
  • The overall conversion rate for the lead generation micro-process jumped to 30%.

This was optimization on the micro-action level.

Again, all of these examples were fairly simplistic and did not take the entire complexity of the issue into account, but they should be enough to demonstrate the Internet Processing model, which we will cover in greater detail in the weeks and months to come.

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