The main ingredient for any successful online business is to generate traffic while increasing conversions rates (CVR). Sounds pretty simple, right? That’s because it is.

However, after analysing your conversion data, this blog post may change your traffic building and conversion rate optimisation (CRO) approach forever.

Pulling conversion reports out of Google Analytics can reveal your sites overall CVR and CVR via individual channels. Channels with the highest CVR will indicate which channel your marketing efforts you should focus on. 

The table below shows the average number of monthly conversions, CVR and visits for a website from January to April divided into six marketing channels including a miscellaneous channel where Google Analytics was unable to identify the traffic source.

The overall CVR between January and April was a modest 11.06%. Organic traffic had the highest conversion rate of 13.04% while Referral traffic had the lowest with a CVR of 6.12% with Paid Search coming in at fourth place. Even though Paid Search didn’t have the highest CVR, it was the most profitable channel for this company. Paid Search generated an average of 2,433 visitors per month, creating 182 conversions. Using simple mathematics, if monthly visits increased so will the number of conversions.

The table above suggests that if the company increased visits by 100%, the number of conversions would be 363. So in the following month (May) the company increased Paid Search traffic from 2,433 to 4,608. However, the results didn’t mirror the figures that were predicted in table above.

Paid Search CVR fell from 7.47% to 3.88%, only generating 179 conversions. Lower than the channels monthly average. You can imagine the disappointment, confusion and fury in this company’s marketing department. After they increased media spend conversions were less than before.
Unfortunately, this wasn’t the first time I have seen companies increase marketing efforts on channels with high CVR only to find their campaign performed worse than before.

Correlation Coefficient

CVR data isn’t enough to initiate a marketing campaign to drive more traffic to a particular channel. The channels Correlation Coefficient should be established first. This will reveal the likelihood of conversions increasing in line with visits.

The table above shows the correlation for each channel from January to April. A correlation of 1.0 is equivalent to 100%, so if a channel has a correlation of 1.0 the likelihood of the conversion increasing with visits is 100%, this is called a perfect correlation.

This table clearly shows that Paid Search had the lowest Correlation at 0.03 (3%). The correlation coefficient can be explained visually using a scatter graph in Excel. An ideal correlation coefficient scatter graph should appear linear, showing a close relationship between both values, visits and conversions.

The Correlation scatter graphs for Paid Search below illustrates the lack in correlation between the two values for January – April and May.

You can see that Paid Search correlation reduced in May when additional traffic was added to this channel. But don’t be alarmed. It isn’t the end of the world if your channel has a low conversion correlation. However, before you decide to increase traffic to a channel, you will need to implement conversion rate optimisation (CRO) first. This can be landing page optimisation or just improving the quality of the traffic you are sending to your website.

For this company, the Pay-Per-Click (PPC) accounts were optimised to improve the quality of the increased traffic sent to their website in June. Traffic increased by 180% from 2,433 to 5,855 and CVR increased from 7.47% to 9.65%. PPC optimisation also improve Paid Search conversion correlation from 0.03 to 0.64.

With a Paid Search correlation of 0.64 (64%) this company is now confident that Paid Search conversions will increase in line with traffic unlike before.

There are many companies that would be happy with a conversion correlation of 0.64 and a CVR of 9.65%. However, complacency isn’t in my vocabulary. No matter how well a website is converting, I believe there is room for improvement. Optimising the PPC accounts required a complete account restructure. However, without consistent optimisation, Paid Search conversion correlation can decline. So ongoing optimisation along with landing page optimisation will be carried out to maintain and improve a CVR of 9.65%.

So please, before you decide to increase traffic to a channel with an impressive CVR, review its Correlation Coefficient first. If it has a high correlation, go ahead and increase traffic. If it transpires to have a low correlation, implement CRO on the traffic you’re sending to the page or on the landing page itself.