August 13, 2002, 12:00 AM

Dell Computer: Online sales percolate when conversion rates improve

Dell’s e-business manager believes that Dell’s consistent improvements in conversion rates since 1998 are thanks to a management position called web producer.

When Sam Decker, senior manager of Dell Computer Corp.’s Consumer eBusiness, addressed his audience at the eTail 2002 conference in Boston last week, he quickly gained their attention and established himself as an expert on his assigned topic of driving online sales by improving conversion rates. “What we sell online,” he said in his opening comments, “is equal to Starbucks’ annual revenue.”

With nearly $2.5 billion in online sales, Dell is leading the online computer business, and its ratio of online to off-line consumer sales in the U.S. is nearly 50%. (Dell’s consumer business last year accounted for $5 billion of the company’s total revenue of $32.5 billion.) And it is clear from Decker’s presentation that a key to the company’s online success is its focus on achieving steady improvements in its conversion rates.

Dell’s web site has registered year-over-year improvements in conversion rates since 1998, and Decker believes that a management position called web producer is behind those improvements. Dell has assigned a web producer for every major product line on its site, who is responsible for coordinating the group’s metric analysts, content developers, product marketers and Internet project managers on all projects that relate to improving that product line’s performance on the web. Much of each web producer’s efforts are directed to improving conversion rates. “The web producer is the champion for metrics like conversion rates,” explained Decker. “The idea of giving someone ownership of that measure is so powerful, and it’s worked for us.”

Among several examples that Decker gave his eTail audience of how Dell has improved conversion rates was an enhancement it recently made to its payments page, a common source of abandoned shopping carts of all e-retailers. Dell offers three payments options-credit cards, electronic checks and monthly payment plans, and before revising the page, all three were given equal billing. Yet, because Dell’s average web order is $1,300, Decker said, “When people come to the payments page they are looking for financing.” Dell figured its monthly purchase plan was perfectly suited for computer shoppers looking for extra credit to finance a purchase, and in redesigning the payments page, it highlighted the monthly billing option in larger and bolder type. It also added a “flash calculator” that allowed those seeking financing to easily determine the lowest possible monthly payment for the amount they wanted to finance. Together, these two changes cut the abandonment rate from the payments page from 27% to 15%.

Similarly, Dell achieved another 6% improvement in conversion rates simply by increasing the number and clarity of categories for products featured on Dell’s software and peripherals pages and by making promotional items more prominent. “Half the people who come to our site don’t visit the home page,” Decker said, “and so it’s important to put promotions on multiple pages within the site.”

Another recommendation that Decker advised could yield immediate improvements in average order size is a feature that provides web shoppers with recommended products. A shopper looking for a certain range of laptop computers, for example, is offered three recommended items-identified as “good, better and best.” Observed Decker: “The shopper typically migrates to the middle solution, which provides you an up-sell option for those people who came to the site looking for the lowest priced item in the category.”

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