Imagine you’re the owner of a retail store on a busy high street, and every customer makes a purchase, or if they don’t, they give you the reason why they didn’t. Or even better than that, they’ll give a clue about what needs to be done differently for them to make a purchase next time!
Sounds too good to be true right? Well in a bricks-and-mortar shop, it is.
But we’re talking about the world of eCommerce! Where you may not be able to chat with your customers on the shop floor, or convert them with your rehearsed customer service lines- but you can get to know them easily.
Using cohort analysis will help you to gain a better understanding of your customers and visitors of your site, allowing you to be able to convert them into paying customers easily.
In this article, we’ll talk through exactly how cohort analysis can increase your conversion rates…
So what is a Cohort?
A cohort is simply a subset of users grouped together by common characteristics.
So for instance, a group of people who share the same characteristic in a defined period of time.
But what exactly do we mean by a common characteristic? Let me illustrate, in an example for Paymill. The big bosses at Paymill could look for characteristics such as:
- People who chose the basic plan in 2018
- Customers who found the service through a Google search
- Users who have a plan AND have read our blog.
But in an eCommerce context, this can refer to things such as:
- Customers who have made a purchase in the last 30 days
- People who have signed up to your monthly newsletter
- People who abandoned their purchase before check out this quarter
- People who came to your store via social media in January
Okay, that’s a cohort- now onto cohort analysis…
What is Cohort Analysis?
Cohort analysis is all about analysing the cohorts on your website. Then looking to identify the patterns and trends that tie them all together.
It’s also sometimes referred to as behavioural analytics and it’ll give you a breakdown of all your customers, allowing you to sort them into relevant categories.
Then you can look into discovering patterns- these can then give you insight into how your customers are reacting to different aspects of your business.
Then, once you have these insights you can action any changes that are necessary to improve the performance of your website.
An important point is that there is no limit to the number of cohorts you can analyse. It’s just up to you to identify the common groups, based on the characteristics that break up the visitors to your website.
Once you have broken down your cohort, you can analyse their behaviour, and work out which parts of your website and which parts of the sales process usually convert
them into paying customers.
Visitors may run into problems on your site that can put them off making a purchase, for example:
- Your checkout page may take a long time load, so they’ll abandon their cart.
- Your blog posts might be too long, so they’ll stop reading at a specific point.
- The contact details for your company may be in a hard to reach section that nobody ever clicks on or scrolls to.
- People may click on your content, but quickly leave the page because it’s not what they’re looking for.
With this new found information you can then identify the tactics that will help you to improve the following aspects of your website:
- User experience/useability– you could improve the speed of your website to help users get to the page they want, quicker.
- Design– check things such as your search bar or important details are in a prominent position for your website visitors.
- Site content– is your content getting traffic? If not, you need to look into what changes you need to make, whether that’s more engaging titles or tailoring your content towards your most popular cohort group.
- Check out– customers want a quick and easy checkout process, so it’s important to streamline this as much as possible.
As well as onsite changes you can also deploy some marketing techniques to boost sales within the identified cohorts. This could be:
- Social media– target social media posts at the audiences that you’ve identified to be lacking in engagement with your website.
- PPC– look into pay-per-click advertising to boost your visitors from different locations.
- Newsletters– send your customers in particular cohorts newsletters, with special offers that appeal especially to them.
- Content– if you have a blog, post relevant content on subjects that will appeal to the cohort groups that are the most popular.
You can also look into taking offline payments to your store as a potentially useful tactic to improve conversion- if online conversion is low on your site.
You could take advantage of Shopify’s credit card reader and take your products to markets or set up a pop-up shop.
Once you’ve nailed down your cohorts and performed the cohort analysis you can use A/B testing to trial improvements.
A/B testing is basically the action of comparing two versions of a webpage, so you can see which version works better. Once you can determine which one has the best conversion rate- that’s the one to use!
It’s a great chance to try different looks and content for your website and experiment with the ones that work best.
Here’s an example:
Wall Monkeys are a company that print premium wall decals for homes and businesses. Their aim was to optimise their homepage for clicks and conversions, so they began with their original homepage which featured a stock style image with a headline overlay.
They used heatmaps from Crazy Egg Heatmaps to see how users were navigating their homepage.
The heatmap was able to show where people were paying the most attention- and in turn where WallMonkeys needed to focus their attention.
As you can see from the image above, the search bar on the homepage was getting the most activity. So they changed it to be more prominent (along with changing the imagery to better represent their products).
This is their homepage now:
They saw their conversion rate increase by a massive 550%– this is an incredible result and shows just how valuable A/B testing can be.
Using cohort analysis and A/B testing is a great way to help you increase your conversion rates- especially because you get to see the results in black and white.
After all, it’s all about getting to know your customers, and working out the cohorts on your site is a great place to start.
Once you have gotten to know your customers, you’ll be able to work on a conversion strategy that caters for their needs. On top of that, it’s comforting to know that you’re creating a process that’s helpful and engaging for your customers- therefore converting them easily!
Charlie Carpenter is the co-founder and CEO of Kite. He is a mobile advocate with over ten years of industry experience. After working for large and small agencies for many years, he co-founded Kite, a software solution for print-on-demand, zero inventory merchandise and personalised photo print goods. In addition to being an entrepreneur with experience with various types of digital prospects, including Responsive