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UPDATE: Another Look At Covid’s Impact On Doing Business Online

UPDATE: Another Look At Covid’s Impact On Doing Business Online

Two weeks ago, we published An Early Look At Covid’s Impact On Doing Business Online to share the impact Covid has had on our customers’ digital businesses.

We’ve updated the observations to now also cover the first half of April. We are continuing to use the first half of March as our baseline for comparison because this is before most lockdowns began in mid-March.

Overall, we see that the initial shifts in online behavior have continued and, in most cases, deepened. Let’s take a look at the details.

 

People are online more and more

Across all of our customers, traffic is up significantly post-covid, and this trend is increasing rapidly. Traffic was up by 18% in the first two weeks of lockdown, and is now up 34% in the second two weeks.

Web traffic (change since first half Mar ‘20)

As so often happens when traffic goes up, you get less qualified traffic and conversion rates go down, and that is exactly what we’re seeing across our customers

 

Conversion rates continue to drop as traffic rises

Conversion rates in the second half of March are 11% lower than the first half of March, and in the first half of April, they’re down even further to 19% below the first half of March. Conversion, in this context, is defined as the online action or actions that our customers said are important to their businesses.

Web conversion rates (change since first half Mar ‘20)

Importantly, the net result remains positive since the growth in traffic more than offsets the decrease in conversion rates. However, the effect is far from uniform.

 

Conversion rate impact remains lumpy

When we look at how conversion rates have changed pre- and post-covid by industry, the results vary quite a bit.

Web conversion rates (change since first half Mar ‘20)

We still see B2C SaaS continues to have the largest increases in conversion rates. This category is heavily weighted to “stay at home” B2C SaaS offerings, like personal video conferencing and education.

B2B conversion rates are also up, but the increase has dipped back closer to the baseline. Two weeks ago, we guessed that B2B buyers have more time at home and are more open to potential solutions. Perhaps that hypothesis was off, or perhaps that free time has dried up as B2B buyers settle in to a new normal. Other B2C conversion rates remain flat’ish.

Both ecommerce and finance conversion rates continue to fall. This didn’t make any more sense to us now than it did two weeks ago, so we dug deeper.

 

Digital-only businesses’ conversion rates remain strong

It didn’t make sense to see data showing ecommerce conversion rates falling when we know that so many more people are at home with strong incentives to buy online. When we dug deeper, we saw a major difference in the conversion rates between digital only and in-person-connected businesses.

Web conversion rates (change since first half Mar ‘20)

Businesses that have been digital only from the start are seeing conversion rates go up and stay up, even as traffic goes up and continues to rise. Traffic going up typically means conversion rates go down, so this is a strong signal.

The businesses that are tied to in person activities are seeing conversion rates go down by a lot, and it’s getting worse. In a time when in person engagement isn’t possible, engaging prospects differently is really important.

In fact, we’re seeing that principle, of adapting to this changed environment, true across the board

 

Base websites need updating

As we described above, conversion rates continue to drop as traffic rises.  That’s shown in the yellow line in the chart below.

Web conversion rates (change since first half Mar ‘20)

Existing messaging and base websites are underperforming this by a wide margin. When we look at those same websites in the portion of traffic that is dynamically personalizing, automatically adjusting to changes in visitor behavior, the dip is 55% to 78% better.

This implies that as prospects behavior rapidly changes, a lot of existing messaging, experiences, and content are not nearly as effective as they had been just a few weeks ago.

The signal we took from this data is that we, as marketers, should adjust our digital engagement with prospects to mirror their rapidly changing behavior. It’s not immediately obvious what new engagement will resonate, so trying out multiple hypotheses quickly seems valuable. We believe this investment is critical given the decline in conversion rates on base websites.

 

Customers are more active, reacting to changes

We see this investment among our customers. They are trying out roughly one third more ideas than they did before covid to adjust to the new behaviors of their prospects.

New tests / ideas being run (change since first half Mar ‘20)

Our customers are actively responding to this rapidly changing environment by testing significantly more new content and online experiences to engage their prospects. As we saw in the previous section, this increased experimentation and dynamic personalization is paying off through better conversion rates.

 

We hope these updated insights from the first month of a post-covid environment continue to be helpful as you consider where to focus to drive your business during shelter in place. We invite you to believe, as we do, that prospect behavior is always changing, even more rapidly now, and that your prospect engagement should change with it. Finding the right way to engage will help each of our businesses weather this difficult environment better.

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