We are often asked by clients, many of whom are among the world’s biggest e-commerce websites, about the effect that website changes have on their ROI: Can recommended changes be directly tied to an increase in revenues? Can they be measured and even predicted? Our answer is Yes and Yes!
But they also ask another important question: Don’t these changes need to be large enough to really make a financial difference? To this our answer is a resounding No!
In order to assist them with these questions we developed a formula and method to quantify and predict the optimization percentage and monetization of a web page. This formula adds a necessary financial layer to digital customer experience and enriches the insights gathered from traditional analytics tools.
Minimizing Guesstimates with Econometrics
Analyzing a range of client cases, we were able to create a mathematical equation for calculating revenue uplift. This enables us to effectively forecast the revenue increase that will result from optimizing the website’s monetization potential. Here it is:
To calculate the Revenue Uplift we must first determine the value of the “Total Funnel Conversion” and the “Average Order Value”, typically these figures are made available through our client’s analytics tools and CRM.
The next step requires getting the value of the “Actual Optimization”, this is achieved by utilizing the following calculation:
“Actual Optimization” is the sum of Micro-Conversions multiplied by a term we coined as “Predicted Optimization %.” A Micro-Conversion is the actual number of visitors who converted in the specific segment that is being analyzed (e.g. the total number of visitors who converted from one step of the funnel to the next).
“Predicted Optimization %” is the sum of Visitors’ “Abandonment Rate” for the specific segment (e.g. the number of visitors who left at this stage) multiplied by the “Predicted Conversion Increase %”, a variable which is based on the analysis of the specific case combined with our proprietary industry benchmarks.
The Monetization of Changes
The following cases outline how we monetized websites’ optimization using our revenue forecast methodology.
Case Study 1: The Monetization of Form Abandonment Rate Reduction
A large energy supplier, which sought to increase its conversion rate of new clients applying online for their services. Our analysis of their “Get a Quote” form showed that the key reason for the abandonment was the form’s submission validation feature. The Form Analytics Drop report indicated that a high rate of users abandoned the process entirely because they received an error notification once they completed filling the form.
We advised the client to change the data validation function to one of “in-line validation.” This way, the user receives an error alert immediately upon completing the specific field. This feature revision improved conversion and delivered a higher success rate. Using the Revenue uplift formula we could monetize this change, and calculated its worth in revenue uplift of $406,000, and a Return On Investment (ROI) of 225%.
Case Study 2: Monetization of Reduction in Load Time on a Homepage
We were tasked with improving the effectiveness of the homepage of an international accounting solutions firm. Our analysis revealed that the average load time of the homepage was 7.16 seconds, longer than both our best practices recommendation of 4 seconds or less and what logic should dictate. An investigation revealed a negligible marketing video which caused this negative effect on the load time. This finding, together with the Bounce Rate Analysis, led us to recommend that the video be replaced with a still image.
According to our calculations, by implementing this recommended change, the uplift resulted in an increase in revenue of $310,000 per year and the annualized ROI of well over 900%!
Case Study 3: Monetization of Form Optimization
Our analysis of the online donation funnel and the donation form of an international non-profit organization revealed that only 72% of visitors interacted with the form; while only 40% of visitors reached the bottom of the page where the Call to Action button was placed. Data-Rich Scroll Reach and Attention Heatmaps revealed that the reason was the length of the form. Subsequently, the form was shortened by separating each section within the donation process and user experience was enhanced by having fewer fields. The revenue uplift calculated resulted in $57,600 per year, which yielded a ROI of 185%.
Case Study 4: Monetization of Search Predictions
We examined the search function in the homepage of a large content website. The Mouse Move heatmap analysis indicated that the highest levels of engagement were observed over the “Search Topics” and “Browse Alphabetically” areas.
We recommended using search predictions, or “auto suggest”, to improve the user experience, and guide visitors to the desired conversion funnels. Based on our calculations and the uplift results from the website optimization, revenue increased by $208,000 per year just by adding this function and having more visitors get into the insurance acquisition conversion funnel earlier. This resulted in a 118% ROI annualized for the client.
Small, but RIGHT changes, can make a big difference
Website funnels are comprised of micro conversions that require precise examination and review. As seen by these case studies, improving online conversion rates doesn’t always mean BIG or complicated changes and redesigns that overload marketing, IT and webmasters. Sometimes, even small incremental changes – as long as they’re the RIGHT ones can make all the difference.
Learn more about Clicktale's Monetization and Conversion tools.
Watch the recorded webinar to learn more on how to prioritize website usability fixes using our unique method to monetize changes.