Is your website like a leaky bucket? | February 18, 2009

A lot of companies make money by driving traffic to their sites through marketing or SEO campaigns in the hope that some of their visitors will turn into customers. This makes sense when attention is plentiful and online marketing is cheap. However as marketing costs rise and attention becomes increasingly scarce, companies need to look outside of the traditional marketing funnel. Rather than simply increasing traffic, companies need to start focussing on conversions. After all there’s no point spending large sums of money pushing people to your site if they leave when they get there.

I call this the “leaky bucket” approach to product design and marketing. When water is cheap and plentiful, you don’t mind spilling most of it on the ground as long as you capture enough to quench your thirst. If you need more water you simply open the tap faster. You’ll end up spilling more but it doesn’t matter as you’ll catch more as a result. However as water supplies start to dwindle and costs begin to rise you’ll eventually reach a point when you can no longer afford to be wasting so much water. Instead it become much cheaper and more efficient to repair your bucket. As it currently stands most websites are literally leaking customers. These are people that actively want to use your product or service but can’t due to poor organisation or design.

This is where usability and user experience comes to the rescue. By ensuring visitors can find what they are looking for when they reach your site, you can plug some of the bigger holes. However the biggest holes are usually core processes like registration or check-out. A badly designed check-out process could literally be costing your company millions in lost revenue. In fact it’s not uncommon to see shopping cart abandonment rates as high as 95% on some sites.

Some of this can be put down to people window shopping, but a lot of this is due to bad process design. Shoppers with money in their hands getting frustrated by badly designed forms, or blocked by requirements to register before purchasing. For instance we came across a site the other day that prevented customers outside the US making purchases because State was mandatory and zip code was limited to 5 characters. We’ve even seen situations where customers think they have made a purchase but haven’t due to poor feedback design. All these issues are simple to discover and simple to fix.

So as attention starts to dry up, website owners need to start looking at plugging the holes in their system or risk losing out on business. After all it’s been known for a long time in marketing circles that it’s much cheaper to keep existing customers than it is to find new ones.

Posted at February 18, 2009 2:54 PM


Chris Wallace said on February 19, 2009 3:47 PM

I think it’s safe to say marketing costs are not rising.

Andy Budd said on February 19, 2009 5:31 PM

I guess that depends on what you measure. The cost of placing an ad has fallen over recent years, predicated by the number of channels vying for competition. However because of that, so had ad effectiveness. As such I’d argue that it actually costs more to turn visitors into customers now than it did 10 years ago.

Chris Wallace said on February 19, 2009 7:09 PM

Then you mean to say the Cost of Customer Acquisition is rising. That’s different than just marketing.

Chris Wallace said on February 19, 2009 7:15 PM

Then I think you should probably say the Cost of Customer Acquisition is rising. I fully agree with that statement, but mainly in conjunction with companies who are out of touch with their market or do not have a direct communication channel with them.

For companies with a great product or service, the cost of customer acquisition is actually coming down to viral marketing channels and techniques, which are much cheaper.

This may have gone a bit off topic, my apologies :)

S-Axxis said on February 20, 2009 8:07 AM

Nice article.In my point of view we should be carefull in designing the website in order to avoid this leaky bucket approach.

Clerkendweller said on February 20, 2009 10:30 AM

Spot on. A review of “bad process design” should also look at whether visitors trust and distrust the company/brand/site when they arrive. Remember that trust and distrust are distinct - the latter is more important with (higher-risk) lesser-known and un-known organisations. Visitors need to gain an immediate impression of the privacy, security and stability values of the organisation.

Andy Budd said on February 24, 2009 9:02 PM

Chris, Viral campaigns are cheap, but the hit rate is pretty low. When they do manage to drive traffic it’s usually unqualified. So they’re good for brand recognition but bad at generating conversions or long term commitment.

You seem to be focused purely on the cost issue. What I’m saying is that it’s a product of both cost and attention. Cost is obviously uneven and may be going down in some areas and up in others. However if you combine that with a scarcity of attention it’s getting much harder to turn the faucet.

However the whole gist of the argument isn’t the speed at which attention is flowing. It’s about learning how to channel it once you’ve got it. There really is no point spending money driving people to your site only to lose them when they get there. Instead you also need to focus on the product and ensure it’s something people want and can use.

Don’t just turn the faucet higher. Fix the leaks as well. That’s the crux of the article.

Amelia Vargo said on February 27, 2009 9:41 AM

It is really annoying as a user to find that you’ve tried to buy something online, but the website wont let you because of something so stupid as a zip code, or state.

From a business point of view - its madness, you wouldn’t shut up your tills and close your doors just a customer was about to buy something.

Jenny Pilley said on February 27, 2009 9:52 AM

Many factors contribute to why people leave a site rather than stay and browse. Bad design poor marketing and hard navigation are just a few of what makes a potential customer navigate away from your page on to another.

Fixing the ‘leaks’ of your website is sure to make a change in the long run rather than hoping they close on their own.

Ollie Pennington said on March 5, 2009 3:12 AM

Great article. Over the last few days I’ve finally got around to ding some proper usability testing and am being blown away by how many simple things on our site are causing leaks!

It’s not the big bits of functionality that we’ve put tons of thought toward that are turning people away, but the wording of a header, or the misplacement of an icon here and there. They’re all quick fixes.

If you want to repair the leaks, get some simple screen-capture and voice recording software (we are using Silverback which is US$50) and pay some punters off the street for their time. I guarantee this will be the best investment you can make in developing a leak-free site!