Website speed: unlock hidden value for your business

For whom

This article is for business owners, marketers, SEO specialists, targetologists, system administrators, and other specialists whose ultimate goal is to increase business revenue from an existing website and minimize costs associated with the website's operation.

What is it about

In this article, we will talk about how the speed of a website affects various performance indicators, share valuable information that will not only help achieve changes in key metrics such as ROI, CPI, CPC but also reduce expenses related to supporting the website itself.

Why does nobody notice this problem

It seems strange: there are dozens of different specialties directly or indirectly related to the functioning and promotion of websites. Everyone knows about the importance of SEO, contextual advertising, SMM, content marketing, and so on. But nobody talks about the importance of website speed, there are no separate specialties dedicated to this task. Maybe it's not that important?

In fact, it is important. And very much so. It just so happened historically that the issue of website speed fell into a kind of gray area.

From the perspective of programmers and system administrators

Speed is only remembered when a site starts to painfully slow down (or stops working altogether). Essentially, this is a website's availability issue, not its speed. Once the site is up and running, it's forgotten about. If a project becomes popular and outgrows the initially chosen hosting plan, the site simply moves to a more powerful hosting. But this is a server capacity problem, not the speed of the website itself. So, techies don't deal with this issue. It's not their area of responsibility. It works — great. It doesn't work — we'll fix it.

From the perspective of marketers

They have their own affairs to attend to. Advertising campaigns, various social networks, content creation, and a bunch of other tasks consume all their free time. If the site works — what else is needed? If it doesn't work — let the programmers deal with it.

From the perspective of SEO optimizers

SEO specialists stand somewhat apart. No one knows exactly what they do. If there are results from their work — that's the main thing. And they don't meddle in other people's business too much. Of course, they can ask programmers to make some adjustments to the site if necessary for SEO. But they need it for SEO. Whether the site works fast or not — doesn't matter. The main thing is for the search engine robot to read everything correctly and evaluate it properly.

So, it turns out that no one has time or interest to seriously address website speed. This issue simply falls out of sight of all team members.

Why a slow site is a big problem

To answer this question, let's look at what the speed of any website affects. And not just look, but analyze specific cases with facts and figures. Where do these data come from? From the Deloitte report, which was compiled based on the results of a comprehensive four-week analysis of 37 different world-class companies. BMW, Pfizer, eBay, and many other companies, less known to us, participated in the study. Over the course of the research, the number of user sessions exceeded 30 million. So, the data presented can be considered statistically reliable.

We strongly recommend that everyone whose activities are in any way related to selling products or services online thoroughly study this report. In the meantime, we will outline the main points from this report.

How website speed affects conversion rates

As expected, the results varied slightly for different business segments. The results showed that a change in loading speed by just 0.1 seconds led to an increase in conversion rates by 8% for retail sites, 10.1% for travel sites, and 3.6% for luxury segment sites.

It is important to note that improvements were observed at all stages of the sales funnel. Naturally, the funnels were different for different types of businesses. A 3.6% improvement for the luxury segment may not seem impressive. However, the number of product additions to the cart from the product information page increased by 40.1%. And this is all from an improvement of just 0.1 seconds!

The impact of website performance on average order value

For retail products, each 0.1-second improvement led to a 9.2% increase in average order value. For travel sites, this value was 1.9%. Obviously, for luxury segment products, this value was minimal.

How website speed is linked to the number of pages viewed

In all observed segments, there was an increase in viewing metrics. Luxury segment — 8.0%, travel — 2.8%, retail products — 5.2%.

How bounce rate changes with increased website speed

The bounce rate was measured for each page or form in the sales funnel. In the retail product segment, the bounce rate decreased by 5.7% for the product list page and by 1.9% for the product description page. For travel sites, this rate decreased by 5.4% for the tour list page and by 6.5% for the main page. For luxury products, the values on the product list pages and on the actual product pages decreased by 3.8% and 4.6%, respectively.

How website speed affects the price of Google Ads advertising

There is not much information on this in the Deloitte report. But it is known for sure that website speed metrics affect the quality score of advertising (Ads Quality Score). Such a metric exists in all popular search engines and social networks. In other words, advertising on slow sites costs more. Following a general optimization of website speed, Postbank reduced the cost per click (CPC) by 8%.

Conclusions from Deloitte researchers

Deloitte experts summarized their work in a short but essential terms.

Speed is a foundational aspect of good user experience. Latency on mobile sites can cause:

• A reduction in mobile sales.
• A decrease in consumer engagement.
• Increased consumer frustration and higher likelihood to bounce.
• Negative brand perception and reduced consumer advocacy.
• Increased abandonment in favour of a competitor who offers a better mobile experience.
• Loss of competitive advantage.

Some of them are quite obvious, while others look revolutionary even four years after the report was released. Here's what they suggest:

• Consider website speed as the main efficiency metric. It is crucial to reach a consensus and make website speed a key KPI metric. Website owners, designers, analysts, and developers should keep this in mind during any changes and improvements to the website.
• Introduce a separate article on expenses for optimizing website speed and maintaining its performance at the proper level. It is not enough to optimize once. Each website improvement should be evaluated, including from the perspective of how it will impact performance.
• Establish the right corporate culture where all team members are committed to the idea of high website speed. Perhaps the last point may seem excessive. But practice shows that uncontrolled changes can quickly nullify all the effects of a one-time optimization.

What the study did not mention

In recent years, scaling projects has become less of a challenge than it was in the early 2000s. Google, Amazon, Microsoft, and hundreds of other large and not-so-large companies are involved in cloud technologies. You can host a site in someone else's cloud or create your own. Today's technologies make it relatively easy to do so. In fact, the whole question comes down to the cost of maintaining the site.

And many fall into a kind of mental trap: if the site is growing and new customers are bringing in profits, there are no problems in allocating additional budget for infrastructure development. After all, these expenses will be more than recouped in the future. It all makes sense, right? Yes, it does. It's hard to argue with that. But the problem is that the question of possible optimization of infrastructure costs simply does not arise. As long as the project is growing, nobody cares. There are other, more important tasks at hand.

Typically, discussions about cost optimization only start when revenues start to decline and profitability decreases. And then the question arises: how much money could have been saved if the question of optimizing infrastructure had been raised at the very beginning of the project? For large projects, such optimization at early stages can result in savings of tens and hundreds of thousands of dollars in the long run. There is never any extra money. And if you consider that this sum could have been directed towards project development, the potential economic impact becomes even more significant.

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