The Time-Effort Index: A New Way to Think About Your Conversion Funnel
If you’re in the business of digital products, commerce, or anything that has a ‘user,’ you’ve probably come across this simple guideline: maximize your conversion rate. High-converting websites generate more revenue, get a higher ROI on their ad dollars, and lead to strong and sustainable growth for the business. Conversion rates aren’t the only piece of the puzzle, but they’re an incredibly important one.
In coming across this guideline, you’ve probably seen a plethora of ways to implement it: clarify your value proposition, create a strong header, differentiate yourself, optimize your UI, offer more information, use bright colors, use sans serif fonts, maybe even sacrifice a lamb to the oracle at Delphi. All of those (save perhaps the last) are great pieces of advice, and you should certainly focus on them. But what about making it easy for your potential customers to actually convert? Just exactly how convenient — or difficult — is it for a potential customer of your website to turn into an actual one?
To better explore this, I’d like to propose a simple method of quantifying the ease with which a potential customer can convert for a given business: The Time-Effort Index. This is a simple approximation of how much time and energy a new customer has to put in to convert for your business — it’s not an exact formula, but it’s a way of looking at it that produces measurable results. To get it, simply measure how much time (in seconds) it takes one of your users to convert for your site, then multiply that by the number of clicks it takes them. Doing this produces a numerical “score” that acts as an approximation for how difficult or convenient it is for a user to convert — the lower the score, the easier it is for a customer to convert.
Let’s take a look at the Time-Effort Index in action and compare a few well-known companies. For now, I’ll define a conversion as a new user registering to the site (although one could define it however they like), and I’ll assume that it’s someone who already knows they want to register for the site. I’ll start my timer when I search for the company on Google, then end it once I’ve finished registering for their website. I’ll count a click as any time I have to click on a link, button, or text field.
Let’s start with Tumblr. Luckily for them, they come up first in a quick Google search, and they have a “Sign Up” link right under their result.
And, once we get to the sign up page, it’s nice and clean. As a user, I know exactly what I have to do.
So where does that leave us? Quite nicely: Tumblr took 5 clicks and 24 seconds, giving it a Time-Effort Index (which I’ll abbreviate to TEI from now on) of 115. Well done.
How about another? Let’s look at social networking site Pinterest. Pinterest, like Tumblr, is first up in our search results, and we’re greeted with another nice, simple layout.
Ah, but we’re not quite done. Pinterest wants a bit more info:
Pass that page and we’re in. So how did we do? Still fairly well — it took 8 clicks, but only 35 seconds, leaving us a TEI of 280.
Let’s take a look at a different beast. Online membership shopping site Jet hopes to take down Amazon, but how hard is it for new users to make the switch? Their search results page is a little more chaotic, but they still secure the first result in both paid and organic listings.
Their site isn’t as simple as the previous two, but that makes sense considering they’re offering a different service.
And, thankfully, the “Register” button is right in the corner. The sign up page is straightforward enough, and for charity’s sake we’ll leave the automatic newsletter opt-in untouched (and thus not counting towards their TEI — but that decision is debatable).
And we’re in with 7 clicks and 58 seconds, giving us a TEI of 406. For a more comprehensive online shopping site, that seems rather reasonable.
How about Yahoo? They’ve been the focus of some less-than-flattering press coverage as of late, so how easy are they making it for new users to sign up? They score first rank on their search results page, but their homepage is fairly cluttered and greets us with a great big banner ad at the top:
And while I see where to sign in, it’s less obvious where I should register. Clicking the sign in button, a new user sees this (and another ad):
What if I don’t have an account? Ah, down in the bottom right corner we see our goal. The sign up page asks for quite a bit of information:
But we’re not quite done! One more step (or two, if you mess up):
Now Yahoo sends me a verification code:
And we’re finally registered. How’d we do? 1,560: 15 clicks and 104 seconds. While it may be reasonable for a site as robust as Yahoo to require more of its users to register, it’s more than our other examples by an order of magnitude — and Ms. Mayer might want to consider that fact at her next executive meeting.
Ultimately, there’s no “right” answer for what the Time-Effort Index should be — it’ll depend on the company, it’s value proposition, and how it defines a conversion. But any company that wants to convert potential customers to users would do well to take a look at how easy it is for new users to convert — or, in some cases, how hard. While it’s not an exact science, the Time-Effort Index is a new way to measure and quantify a factor that’s critical to your conversion funnel, and it provides a tangible target for raising your conversion rates.
So, Product Owners, maybe it’s time to ask yourself — what’s the TEI for your own website? Does it make sense, given the nature of your service and value proposition? And, most importantly, how can you lower it?