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Increase Your Online Sales: Part #2 – Conversion Rate Optimization

IZTOK FRANKO

How to do conversion rate optimization for your travel website

There is a simple formula to grow your online sales for your travel website, and conversion rate optimization is the key element in the formula. You can check out the formula here.

In PART #1 – Customer Acquisition, we covered how to generate an audience (visitors) for your travel website with your customer acquisition strategy.

In this blog we will go through how you can convert your visitors into customers.

Regardless of your customer acquisition strategy, the conversion rate optimization process (CRO) should be the crucial process in your digital marketing strategy.

You can’t grow your online sales long term if you are not the master of the conversion rate optimization process.

Most travel companies have detailed acquisition strategies and are high advertising spenders. But there are still many that don’t execute the conversion optimization process systematically, and on a regular basis.

The usual plan when we want more sales is more advertising to generate more traffic, instead of converting more existing visitors into customers. Similarly, we all optimize ads and targeting rigorously, yet our users will be exposed to our ads for only a few seconds.

On the other hand, the amount of time our users will spend on the landing pages and in the booking funnel is much longer. This is especially relevant in the travel industry, where time spent in the booking flow is quite long.

Here’s a quick case for why conversion rate optimization really matters.

Let’s look at the importance of conversion rate on the case of paid cost-per-click (CPC) traffic (e.g., Google AdWords or metasearch traffic).

If you want to grow your travel online sales, CPC traffic will be part of your customer acquisition strategy to some extent.

In the case of CPC traffic, increasing your conversion rate will have double impact.

Not only will you produce more bookings and revenue, but you will also reduce cost.

Conversion rate optimization potential

You can see that if you increase the conversion rate for 10%, you will decrease cost-per-booking (CPB) by 4.5 EUR. This can be a big difference in the final margin.

Add 10% more transactions because of the higher conversion rate. Finally, multiply the difference in margin per booking (MPB) by ten or a hundred thousand bookings, and the total effect is huge.

You can use this FREE Diggintravel Conversion Rate Increase Calculator to calculate the impact of increasing conversion rate on your number of bookings and total margin.

As you can see, conversion rate optimization makes a lot of sense, and yet the usual conversion optimization budgets are peanuts compared to the advertising budgets.

Think for a moment about what you spend for customer acquisition (advertising), and what your conversion rate optimization budget is.

Conversion Rate Optimization Cycle

So how can you start with conversion rate optimization?

There are many conversion rate optimization frameworks out there and each has its own flavor and different steps. I prefer a simple conversion rate optimization “loop” process consisting of four phases:

Conversion rate optimization cycle

The important part to remember is that conversion rate optimization is a cycle process.

Conversion rate optimization is an ongoing process that shouldn’t be performed on a ‘one and done’ project basis.

Now, let’s look at each phase in more detail:

PHASE 1 – Measure, or “What Is Happening?” Phase

Always remember:

What you do not measure, you can’t optimize.

This is why your conversion rate optimization process must start with the Measure phase.

There are two angles to the Measure phase:

  • Implementing an advanced analytics system to measure and benchmark the performance of your website and ecommerce.
  • Developing a data-driven culture within your organization.

For a proper measurement of your performance, you will need the proper systems. Let’s look at the landscape for the analytics options:

Website analytics

Systems like Google Analytics (with enhanced ecommerce setup) or other web analytics tools are a must for measuring all events on your website. This is the core of your analytics process.

For initial setup of your website analytics, you will need to define and implement:

  • Main booking funnel goals (primary goals)
  • Secondary goals (like search events, search competition, email signups, content-blog reads)
  • Products (e.g., city-pair destination combination for flights, segments: business, leisure, etc.)
  • Other events and triggers
  • Key reports
  • Process for measuring accuracy and discrepancy with your backend transactional data

Website analytics will allow you to track onsite user behavior, acquisition channels and onsite conversions.

Email and marketing automation analytics

Email systems and simple marketing automation systems like MailChimp, HubSpot or Drip are probably the way to go, if you are new or a small organization.

Full-scale marketing automation systems like Marketo or Pardot are more advanced options.

Either option will allow you to measure performance of your off-site and on-site digital marketing activities. Measuring open rates, click-through rates, and subscribe and unsubscribe rates for different segments and email activities should be part of your analytics portfolio.

Marketing automation will also allow you to manage shopping cart abandonment and up-sell and cross-sell.

Backend and other BI analytics

Finally, you should not analyze your online analytical results as a silo. Instead, you should integrate online analytics into your overall analytics framework. Usually the consolidation is done in a business intelligence (BI) system, where you integrate web data with backend data (other sales channels data, CRM, ERP, etc.). As with the modern marketing, agile is the way to go with BI as well.

This will enable you to have a holistic view of your business, especially if you use a complex omni-channel sales and distribution model.

Outcomes of the Measure phase

The information you will gather in the measure phase is numerical, quantitative. Measuring and metrics will give you an indication that something is happening. These discoveries will be the cases you will look into in the Analysis phase.

Examples of the outcomes of the Measure phase

  • Conversion rate for metasearch referral traffic provider #1 is 15% lower than metasearch referral traffic provider #2
  • Bounce rate for the payment page in the booking funnel is 20% lower for users from Russia compared to site average

So, you know that something is wrong with the online process for metasearch provider #1, and the payment process for our Russian customers.

PHASE 2 – Analyze, or “Why Is It Happening?” Phase

The Measure phase will give you an indication that something is happening. You will see the numbers, however, you need to interpret them properly.

Too many times we see the numbers (like drop-off in conversion rate on some level) and we interpret them subjectively. This is where the Analyze phase starts.

The goal of the Analyze phase is to really understand the “WHY”; to understand your users and their behavior.

 

Three different ways to understand the WHY:

Conversion rate optimization - user feedback options

1.   User testing

User testing is one of the best ways to get insights into how your users use your websites. It will show you how your users actually navigate through your website. A typical user testing session will record the user while he/she is using your website, and also track their comments.

It will also show what they do to perform the task at hand (e.g., do the actual booking) and what obstacles they face while doing it.

There are many online services, such as usertesting.com, that simplify the time and effort needed to conduct user testing. It is not always optimal (compared to doing your own custom user-testing sessions), but it is fast and simple with minimal resources needed. Even simplified user testing will provide you with valuable insights.

In my book, it is always better to do more tests and do them fast, compared to doing a few perfect user-testing sessions. Or even worse, doing no user testing at all.

2.   On-site and email surveys

On-site surveys will help you understand who your customers are, and what their biggest concerns are when using your site. There are many online tools to use for on-site surveys, like SurveyMonkey, SurveyGizmo, Qualaroo or Qualtrics.

However, be careful when you use these and how you use them.

I prefer on-site surveys on the confirmation page, once the booking is done. This way, you don’t create additional friction during the booking process. Don’t use long-form surveys or questions with multiple-choice selections. Preferably, use one simple question.

For the confirmation page, the best question you can ask usually is:

What’s the one thing that nearly stopped you from booking with us?

The downside of performing surveys on the confirmation page is that you only survey the people that completed the booking.

You can use exit surveys and email surveys to survey the abandoners or users who are just searching for information on your site.

Additionally, you can use email surveys to reach out to your customer base to get additional insights. Segment your database (for example, one-time vs. frequent customers) before conducting the surveys, and use the same guidelines as for the on-site surveys.

3.   Customer interviews

This is one of the simplest ways to get customer insight, yet overlooked too often. Aron Levie, CEO of Box.com, nailed it when he said:

You’ll learn more in a day talking to customers than in a week of brainstorming, a month of watching competitors, or a year of market research.

Talk to your customers. Listen carefully to what they say and what words they use. You can reach out to the customers that responded to your email surveys and ask them to elaborate on their answers.

Additionally, talk to people in your organization that have direct contact with customers. Customer service, live chat support, and social media support teams will all provide you with valuable info. Ask them about the questions and concerns your customers have, and what they say to the customers to answer them.

Outcomes of the Analyze phase

The information you will gather in the Analyze phase is qualitative. In this phase, you will get the answers to your WHY questions.

Examples of the outcomes of the Analyze phase

  • You will understand that the customers from metasearch provider 1 are very price-sensitive and don’t like the pre-selected up-sell options.
  • You will understand that drop-off on the payment page in the booking funnel for users from Russia happens because of a lack of local payment options (like Qiwi, which is very popular in Russia).

PHASE 3 – Optimize, or “I Can Do Better” Phase

This is when re-design of your website happens. Findings in the Measure and Analyze phases will identify your optimization scenarios. You will understand which parts of your website can be optimized. The goal of the Optimize phase is to do the actual optimization.

Create a list of optimization cases and prioritize

Before going into the optimization itself, create a list of the possible optimization cases.  For each case write down goal, resources needed (development and other) and potential impact on the revenue and margin. This will help you to prioritize and optimize the cases with biggest bottom-line impact.

Gather feedback with smaller test cases

If you are new, start with simple cases (like specific landing page redesign) before going into more complex ones (like booking funnel redesign). You can use AdWords ads or email campaigns to pre-test some of the suggested improvements (copywriting, key messages, unique selling proposition).

You can use services like Optimizely, Unbounce or VWO to conduct simple redesign pre-testing sessions. The goal is to gather as much empirical data as possible, to support your redesign assumptions.

Design your “challenger” webpages

Use the data you gathered in prior steps to develop wireframes and design proposals with your website design team.

The wireframes must be designed to be more user-friendly, have better flow, reduce friction better and be more persuasive than the existing version.

The new designs are the “challengers” that will be tested against existing pages in the Test phase.

For the complex cases, be agile. Avoid huge website redesign projects that take several months to finish. Rather, break them down into smaller redesign projects and use services like usertesting.com to gather quick initial feedback.

Outcomes of the Optimize phase

New landing page, new booking form, or new elements in the booking funnel are examples of results in the Optimize phase. They should be developed based on the quantitative and qualitative data gathered in prior phases.

Examples of the outcomes of the Optimize phase:

  • You will create the new product selection page where users select up-sell features. Instead of pre-selected features, the new page will use bundled product options. The new page will also use copy that will show users the benefits of each product bundle to support the up-sell scenarios.
  • You will add a local payment option (Kiwi) for the Russian market on the payment page.

PHASE 4 – Test, or “Innocent Until Proven Guilty” Phase

If you double the number of experiments you do per year, you’re going to double your inventiveness. —Jeff Bezos, CEO of Amazon.

Testing is the critical phase of the conversion rate optimization process. Without testing, we work purely on guesswork and assumptions.

I’ve seen many cases where marketers evaluated changes based on “before vs. after change” conversion rates values and other indicators (bounce rate, goal competition). This can be very misleading, especially in the travel industry where prices and availability change rapidly and affect conversion much more than the website redesigns.

The only proper way to measure your conversion rate optimization efforts is to do proper testing, meaning your “challenger” redesign needs to be empirically (through testing) proven better than the existing version.

A/B testing

A/B testing (or split testing) is the most widely used method for testing. With A/B testing we compare two versions of website pages against each other, with the goal of determining which one performs better.

Conversion rate optimization - A/B testing

 

Tools for testing

There are many platforms you can use for testing. Google Analytics is a free tool and very popular. Google Analytics Experiments, now Optimize, are features of Google Analytics used for testing. With AB Tasty, an all-in-one conversion optimization platform, you can do both testing and gather user insights.  Other popular tools are VWO (Visual Website Optimizer), Optimizely or more advanced Adobe platforms.

Simple tools like VWO, Optimizely or Unbounce are fine for quick, simple tests of landing pages. For more complex testing of booking flow, you will need better tools or help from your IT and development teams.

Avoid the mistake of stopping tests too early

We are always thrilled and anxious when we start our tests. Especially if you were involved in the redesign phase, you will want to prove your improvements will work. You should start testing with the “prove me wrong” instead of “prove I’m right” mindset. Don’t take first results that show your version is winning to proclaim the victory.

You need to reach statistical significance with your tests otherwise the results and conclusions will be wrong. Don’t make the mistake, and end the testing too early.

If you have a travel website with booking functionality, aim for at least 100 conversions for each version. In fact, 300–400 conversions would be even better. However, this is just a simple guideline. You should actually stop when you reach at least 95% statistical significance; 98 or 99% significance is even better.

It can be overwhelming to calculate the statistical significance threshold for your case if you are not a statistics fan. Use this tool to calculate the needed sample size for your test. You can read more about statistical significance in conversion rate optimization here.

Outcomes of the Test phase

Your key outcome of the Test phase should be the knowledge you learn from test results. Perhaps your test hypothesis was confirmed by test results and your assumptions were correct. Your efforts to understand your users in the Analysis phase and improvements from the Optimize phase work. You improved your website and increased conversion rate.

On the other hand, even if your hypothesis was proven wrong, you will gain new learnings and insights. And the conversion rate optimization process is all about constant learning and improvements.

Where to Start with Conversion Rate Optimization for Your Travel Website

Before starting with your conversion rate optimization process for your travel website, ask yourself the question:

“Why people aren’t converting on my website?”

This should be the main question to have in mind during all your conversion rate optimization efforts.

The other advice is to use the “80/20 rule” and focus on your website pages that have the biggest impact on the conversion rate for your travel website. Understand your key use cases and funnels, and focus on the key pages in these funnels.

Use enhanced analytics reports for funnel drop-off by pages in the booking funnel. Apply segments to see exit rates by countries/markets, products, and customer segments to identify bottlenecks.

Two good cases to focus on

I wrote about two key elements of your travel website in this blog.

Search box (form) and search results page are usually two elements that have a big impact on overall conversion. You can use suggestions in the blog to start your conversion rate optimization for these two key elements.

Testing your booking funnel with split-path testing

Booking funnel (the path from the Search box and all the way to the booking Confirmation page) is the most crucial part of your travel website. You need a holistic approach to optimization of your booking funnel. You shouldn’t be optimizing and A/B testing just a single page in your booking funnel. Performance and conversion of the whole funnel is what really matters.

When you’re working on bigger booking funnel re-designs, you should do the split-path testing to really understand and measure the effects. Split-path testing is more complex and requires more technical resources, but it’s necessary to optimize your booking path.

Real example of booking funnel conversion rate optimization

In this blog post, you can see how booking funnel conversion optimization was done on a real case. By analyzing, optimizing and testing a new upsell approach on the search results page, total revenue was increased by 13%.

Conclusion

If you are serious about growing online sales for your travel website, conversion rate optimization should be one of your key processes.

Don’t take shortcuts and go through the whole cycle of optimization. Remember, conversion rate optimization is an ongoing process that doesn’t end. Done right, it will provide you constant new learnings and increase your online sales.

By being better at conversion rate optimization, you will convert more existing visitors into customers. Conversion rate optimization will also be the foundation of selling more to existing customers. You can learn how to do that in Part 3 – Master Up-selling and Cross-selling.

Iztok Franko

I am passionate about digital marketing and ecommerce, with more than 10 years of experience as a CMO and CIO in travel and multinational companies. I work as a strategic digital marketing and ecommerce consultant for global online travel brands. Constant learning is my main motivation, and this is why I launched Diggintravel.com, a content platform for travel digital marketers to obtain and share knowledge. You are welcome to reach out to me at iztok.franko@diggintravel.com.

1 Comment
  • Rohini Navale
    Reply
    Posted at 5:41 am, January 22, 2020

    “Hey Iztok,

    Right now I am at PHASE 3 – Optimize, or “I Can Do Better” Phase and I am re-designing the homepage of my client’s e-commerce website. I am referring to your article to improve the website and improve user experience.

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