StrategyApr 16, 2013

eCommerce Moneyball: How to Use Analytics to Win at Conversion

Kyle Wahlquist

![MoneyBall1If you are not familiar with the movie Moneyball, the quick synopsis is that Brad Pitt is the manager of a cash-strapped baseball team that cannot win the way that everyone else does—by buying the best players. Instead, the frugal Mr. Pitt finds a kid who knows a lot about statistics and uses the numbers to find the greatest possible talent at the least possible cost. *Spoiler alert, while they don’t win everything, they improve the team ranking (ROI) so much that it is widely adopted throughout the league.

This story owes its existence to the pre-existing concept of Sabermetrics, or the data-driven analysis of baseball through the acquisition of specialized evidence. Mr. Pitt’s unique application of this concept was to identify the players who had the statistically highest success rate of getting onto 1st base while also having the lowest salary demands.

In many ways, successful eCommerce applications need to do the exact same thing as the cash-strapped Oakland A’s. Once you’ve gotten people onto your site, you can use the same type of analysis as did Mr. Pitt in order to create the user flow that will give you the highest purchases at the lowest drop-off rate.

Playing eCommerce Moneyball

Let’s examine how an eCommerce site can be like baseball. In baseball, you have three bases and home plate. In an eCommerce website, you have various stages (pages) of your conversion funnel (site) that all ultimately lead to the sales confirmation page. These pages are your bases, with the sales confirmation page being your home plate. Getting people here is how you score points, earn dollars, and win.

With the various stages of your conversion funnel being equivalent to your bases, it’s important to note that these bases double as your players. They are more than just locations—they are locations that encourage your runner (the potential customer) to move from one stage to the next. It is your job to put in the best player at each plate in order to maximize the number of people who convert to the next step in your website.

If baseball were an eCommerce site, baseball would be an entirely different game. You would get to sub out a player for each individual base they are on. So, your drafting job would become a lot easier, as you would just need to hire a few of the best hitters to get you to first, a few of the best runners to get you to second, a few to steal third, and so on. On an eCommerce site, each page can become that optimized player to take your business to the next level.

How do you draft the best players for each of your various stages? How do you know if a current stage is underperforming, or if it’s truly close to its maximum possible potential? How do you know if it is a page worth investing in? How do you know if it’s worth getting rid of?

The answers lie in site analytics and in A/B testing. Looking at your conversion rate overall and then from one “base” to the next will show which pieces are performing, excelling, or falling short. Where your user experience falls short, improvements can be made and then run though A/B tests, wherein you develop a different base to substitute in for the questionable one. Once you’ve done this, you run your overall traffic through two paths. This traffic is generally divided up somewhere around the 80/20 rule where 80% of your traffic would go through the normal flow, and 20% would go through the new page. Essentially, A/B testing is the equivalent of tryouts in baseball.  If the new page has a higher conversion rate to the next step than does the old one, then appropriate steps would be taken to make that a permanent replacement or player in your conversion funnel.

There are some things to look out for when trying to optimize your site’s conversion.  You don’t want to put in two different changes into the same user flow at the same time, as this can cause abnormalities to your results.  It is also generally best to keep the pages in your flow to as few as possible.  We don’t want to play baseball with eleven bases and we don’t want to have to try and convert users through more steps than you need.  Additional or unnecessary steps can work against you.

All-in-all, Moneyball can be a fun and profitable game to “play” in eCommerce and a toolset that we alluded to in our blog on Online Marketing Strategy.  Ultimately it should be how you drive user experience and will allow you to put tangible and objective numbers around recommendations and track results.  So how is your team doing?  If you or someone you know needs assistance in learning more about these practices, reach out to us!