One of the most important metrics CMOs need to manage is the website conversion rate. Whether your conversion goal is an online purchase or a visitor becoming a qualified lead, every conversion brings you closer to meeting your business goals.
As a CMO, you know that typical conversion rate percentages are in the low single digits, so anything that increases the conversion rate by even fractions of a percent can have significant revenue impact. There is both art and science to maximizing website conversions. Much involves empirical observation – AB testing messages, layouts, color schemes, and so on. It is well understood that your website performance, fast or slow, impacts conversion rates. Websites that make their visitors wait deliver fewer conversions.
Studies consistently confirm that users respond best to page load times of 2 seconds or less. Table 1 below shows the results of several studies that tracked impact of performance on conversions.
Other studies have reported similar findings. The conservative consensus estimate is conversions are increased 2% for every second decrease in page load time, down to a page load time of 2 seconds.
So how to model the business impact of using Intelligent DNS traffic management? The impact is the delta between the results obtained using traditional, static DNS versus the results from Intelligent DNS. Traditional DNS services make their traffic management decisions based on the geographic proximity of the end user to the different available points of presence of the website. Traditional DNS sends the user to the point of presence that is geographically closest. This static approach works most of the time, but conditions on the Internet and in the data center points of presence themselves are very dynamic. Conditions frequently arise in which the geographically closest point of presence does not deliver the best performing response.
Events that trigger these conditions include:
- Congestion in internet links
- Equipment outages within the internet infrastructure
- Server or other equipment outages in the data center
- Unplanned, local demand spikes.
NS1 Intelligent DNS is designed to account for these dynamic conditions. It uses real time data from the Internet and from the points of presence to determine the optimal routing for incoming users.
The value of this is relatively easy to model:
Monthly Revenue Impact = MC x SC x Q x T x 2%
MC = Current number of Conversions/Month
SC = Value of a Single Conversion
Q = % of Queries Improved by Intelligent DNS
T = Average Performance Improvement in Seconds
2% = empirical estimate of rate of conversion increase per second of performance improvement
This impact is best illustrated graphically. The example below shows an example e-commerce business that currently achieves 5M conversions per month with an average value of $10/conversion. In this example, we model the impact of delivering from 1% to 10% better responses that result in an average page load time reduction from 1 to 8 seconds. At the low end (1% of queries improved by 1 second), the monthly return is an additional $10K ($120K annually). At the high end (10% of queries improved by 8 seconds) the monthly return is $800K.
The results show that even a modest improvement in delivering better performing answers delivers significant added revenue.
If your page load times could be better and you’d like to see an increase in related conversions, come talk with us about your project and goals for driving better performance and better business results. Chances are we can help you get more value out of your online infrastructure. https://ns1.com