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Nov 18, 2003
How To

Four Ways Dell Quadrupled Home & Home Office Online Sales Conversion Rates

SUMMARY: Over the past four years, Dell's Web team have tested a variety of tactics to get the average ratio of visitor-to-buyer as high as possible. Here's what they learned:

- Be more rigorous when using website metrics
- Use multiple data sources to drive site development
- Test, but be pragmatic
- Use urgency copy to drive response

Note: MarketingSherpa-reader Sam Decker caught our publisher's arm at the Shop.org show and volunteered for this interview. Everybody please thank Sam.
By Contributing Editor Mark Brownlow

When you're doing over $2.8 billion a year in online consumer
sales alone, even a tiny change in conversion rates has big
dollar implications. So how does Dell maximize that key metric?

Sam Decker, Dell's Senior Manager of CRM & Loyalty, describes
four tactics and strategies the US Home & Home Office division
uses...

#1 Be more rigorous when using website metrics

When it comes to using metrics, Decker says it's not about coming
up with fancy indicators that nobody's thought of before.
Instead, it's simply about using metrics throughout the entire
business.

"It's not just the analysts looking at the data, it's all levels
from senior management to different functional roles...being able
to look at the data and understand how these impact the goals
they have ownership for."

Communication and convenience are the keys to making that happen.
All employees are informed about what each metric means and how
it impacts their work. Plus, they get fast and easy access to the
data.

Decker explains, "It's only 1 to 2 clicks to get the number you
need, to understand where you are in terms of your goal. We've
had tools where you can get any metric you want, just it takes 5
or 10 minutes. That's different than taking 10 seconds. People
are busy."

He concludes, "The takeaway is the extent to which the culture
and operational management breathes metrics."


#2 Use multiple data sources to drive site development

Site metrics and related financial data are just two of the
sources Dell draws on for understanding customer needs and
behavior. Other sources include site entry and exit surveys,
click patterns, BizRate.com, focus groups, usability studies, and
visitor feedback.

Combined, this data drives changes aimed at improving the
customer experience and conversion rates. Two examples:

o Focus groups and usability studies taught staff that
customers buying a PC thought about buying the core computer and
the associated software/peripherals as two separate things. So
they redesigned the PC configurator page accordingly.

Instead of seeing everything in one go, customers now decide what
PC they want, then click on "continue" to reach a second section
where they buy the software and peripherals for that PC.

o Dell used site pathing metrics, usability studies and an
entry-page survey to understand why the financing information
page got such high abandonment rates (people leaving the site
from that page). It turned out that most people were looking for
(but not finding) an estimate of their potential monthly payment.

So the team added an interactive flash calculator to determine
payments for any price point (N.B. abandonment rates dropped
50%).


#3 Test, but be pragmatic

Dell also follows the established "test, test, test" mantra, to
establish the worth of proposed changes in technology,
merchandising, layout, content, navigation, etc.

Company staff draw on the data resources described earlier, as
well as their own intuition, to find weak points in the customer
experience ("if we can improve the customer experience,
conversions should go up").

With an average 3 million monthly visitors to the consumer
section, there's plenty of potential for using statistically
significant A/B test splits to see what changes might address
these weaknesses. But Decker has pragmatic advice for those less
lucky...

o You can't test everything immediately, so prioritize

It's critical to first assess the likely payoff from proposed
tests so you can prioritize them. Decker notes, "We ask the
business people, 'If this were to come true, what's your
hypothesis? How much impact would it make on the business as well
as the customer experience?'."

o Don't wait to test everything scientifically first

Decker suggests that time and resource constraints mean formal
A/B split tests aren't always possible. No problem. If you
monitor and understand your site's metrics, you can..."put
something out there and see its impact on those metrics."

Later, a regular comprehensive usability test on the site
provides an additional perspective on any mistakes. Decker
explains, "What we do is evolve the site, make a lot of fast
decisions, then get to a point a quarter later where you want to
test the whole thing and find we can improve earlier decisions."

o If nothing else, test the homepage...

"The homepage gets people engaged and gets them to the next
level. It's the principle of momentum. As soon as you get people
into a click they've started to invest..."

o ...and checkout

"You need to avoid any friction at this point. The littlest
things at that time of anxiety of going through checkout can drop
them out..."


#4 Use urgency copy to drive response

Dell makes good use of time limited promotions to support
computer sales. And Decker offers a list of useful tactics to
support these promotions:

o Urgency copy; using words such as "Click now," "Limited
Time Offer," and "Last Day" in the promotion message

o Clear Action; such as adding a "More details" link to each
offer

o Crossed-off pricing; cross out the original price and
highlight the sale price

o Deadlines; date the promotion and give a countdown - "2
Days Left" or "Ends Today"

Decker adds, "It's about applying old direct response
principles."

Although he can't reveal which specific promotions work best, he
notes that if you use "if you buy this, you get this" promotions,
then the most effective bonuses are those that relate directly to
the product (such as tossing in a complimentary printer with a PC
purchase.)

Decker admits conversion rate optimization is a never-ending
process of improvement. "Even if the goalposts weren't moving you
can always improve. You can never assume you've done everything
you possibly can."

Nevertheless, under Decker's guidance (he's only recently been
promoted to his CRM-focused position), the Home & Home Office
division's conversion rates quadrupled over the period 1999-2003.

Note: Dell is a member of Shop.org, a forum for retailing online
executives to share information, lessons-learned, new perspectives,
insights and intelligence. http://www.shop.org

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