If you want to know just how profitable your online business is, and whether or not it has a bright future, look no further than your website’s conversion rates. These key metrics track the success of your website and can also be used to troubleshoot problems as well as to optimise for the best user experience and, ultimately, conversions.
What does Ecommerce ‘Conversion Rate’ mean?
In theory, your website’s conversion rate is a straightforward calculation: divide the number of people who visit your website and buy an item from you by the total website visitor count.
That being said; an online sale may not be the only type of conversion that you’re looking for. It could also be one or more of the following:
- Email subscriptions
- Social media shares
- Adding products to a basket or wishlist
- Or any other Key Performance Indicator (KPI) that’s valuable to the business.
Higher conversion rates typically lead to improved sales and revenues whilst a lower conversion rate can be a key indicator that you are failing to attract your target audience or your site’s content isn’t up to scratch.
It’s important to remember that the overall conversion rate of a website can be a little misleading though and might not be the optimum signal to use as a performance indicator. For example, a higher bounce rate is to be expected for a blog heavy website who’s articles rank highly on Search Engines.
It’s normal for a visitor to find a piece of your content, click through, digest the content (maybe it’s an article), and bounce off. There are optimisations you can make to capitalise on those users to stop them bouncing off, but if a high proportion of your traffic is driven via your blog, for example, this will ultimately impact your overall conversion rate by reducing the figure.
If more of your blog articles begin to rank well in search engines, it will likely result in higher levels of organic traffic. As blog traffic generally has high bounce rates and low conversion rates against the homepage, product and category page, this can result in a lower overall website conversion rate which is considered a negative. However, this is actually a huge positive that you are getting more traffic through higher (or more) organic rankings, increased online visibility, more brand awareness and ultimately higher traffic volumes for you to optimise the site for and capitalise on through the likes of Conversion Rate Optimisation (outlined below).
High conversion rates are the Holy Grail, but they just don’t happen overnight. You may need to work with a Conversion Rate Optimisation (CRO) agency to improve user experience on your site, identify and act on key considerations that influence your audience, and ultimately boost sales
What is Conversion Rate Optimisation or CRO?
Conversion Rate Optimisation or CRO involves analysing, hypothesising, testing and improving the user experience and user journey to increase the likelihood that visitors will complete a specific action (or conversion). This process typically begins with analysing landing page designs and content, which then carries through to the point of intended conversion on the site.
There are six areas that Ecommerce sites should focus on for CRO:
- A/B or split testing for a better user experience
- Customer journey analysis
- Copy optimisation
- Customer surveys or feedback
- Basket abandonment analysis
- Segmentation or dividing customers into smaller groups for targeted messaging.
- Understanding this information is crucial and will let you know where to focus your CRO efforts. By putting your energy into the pages with the highest customer engagement, you’ll typically see the largest impact.
- What makes a good conversion rate?
You should create your own benchmark to give a true and honest reading of where your business is and what it needs to focus on. There is always room to grow, so keep that in mind when setting your goals.
Digital marketing is unique to each individual business and so are the results. Every website will have varying levels of traffic volume and sources. The relationship between a business and its audience is unique and often subjective, therefore it’s important to not get bogged-down with comparing variables such as brand perception when trying to understand your conversion rate.
Let’s look at an example
Amazon convert 74% of their Prime customers in any given session, which is seriously impressive against any Ecommerce website, even more so considering non-Prime members convert at a much lower 13%!
So how do they achieve this? They have built a solid relationship with their customers through consistent service quality and improved dispatch-to-delivery timeframes to just 24-hours.
For non-Prime members who only convert at 13%, even at this impressive number, there is a huge difference in conversion performance between the two. However, comparing the two types of buying groups with each other would not provide a true view as to how the company is performing overall, as the benefits for Prime members ensures both loyalty and retention.
What is a good Ecommerce conversion rate?
A ‘good’ Ecommerce conversion rate depends entirely on the key metrics that matter most to your business and its success. Industry averages are commonly used as a benchmark to determine how your website is performing against others in your industry, but there are many varying factors that play a part so don’t treat them as goal posts. We’ve outlined some industry average conversion rates in the section below for you.
If your conversion rates are taking a nose-dive, typical issues to troubleshoot can include:
- Slow page load times
- Broken forms
- Copy that isn’t appealing or targeted
- Poor product imagery
- Extra costs such as expensive shipping (even any cost for shipping can kill conversion rates)
- Extra costs revealed at a late stage (known as hidden costs)
- Lack of trust from the shopper
- The Call To Action is unclear
- No perceived value in your offer
- Bad customer reviews
- Ecommerce conversion rates by the industry average
According to recent findings, when the conversion rate is segmented over four major sectors (Ecommerce, legal services, B2B and financial services), experts found the following average conversion rates:
- Ecommerce – 1.84%
- Legal – 2.07%
- B2B – 2.83%
- Finance – 5.01%
- Median – 2.35%
From this data, you can see that Ecommerce has the lowest average conversion rates of the four industries whilst finance enjoys an average of 5.01% conversation rate, which is 2.18% higher than the next highest industry average.
Now take a look at the average conversion rates for the top 25% conversion rates across the same four industries:
- Ecommerce – 3.71%
- Legal – 4.12%
- B2B – 4.31%
- Finance –11.19%
- Median – 5.31%
This shows us that there’s a lot of movement within the same sectors and that the top 25% of conversion rates are close to double the average for each industry.
At this point, it’s also worth noting that conversion rates will also vary depending on what the conversion is. For instance, the rate for downloading something free tends to be higher than for a paid purchase.
Conversion optimisation tools
Google Analytics is a logical starting point when analysing conversion rates. There is a range of measurements that can be utilised to track and monitor user behaviour on your website and then compare performance for a cross-section of users. This provides crucial information on the following areas:
- How visitors found your website
- How long visitors stay on your website
- Where visitors are from
- Whether they are new or returning visitors
- What browser was used and the device
- How many visitors converted and the interaction that led to the conversion
- The performance of Paid traffic (when linked to your Google Ads account)
With this data, you will have enough information to work out yourself where your site is lacking or excelling. If you’d prefer, it’s a good starting point to also team up with a CRO agency.
How to increase Ecommerce conversion rates
Here are some of our favourites:
- Use video and images on the home page or product pages to grab the attention of visitors and focus on your key messages. In this way, customers will know exactly what they are getting.
- Test your checkout process and make it smoother and faster. If checking out is too long and complicated, it will be losing potential customers.
- Experiment with live chat tools, as this creates direct communication between you and your customer, creating a human connection that will help build trust.
- Enhance online trust and credibility by using small images of PayPal, Visa, Mastercard as visual signs that you use trustworthy payment options. Even by adding a padlock icon to the checkout button we’ve experienced uplifts in conversion rates. Displaying your phone number prominently also reduces customer anxiety in this area.
- Prominently display security and accreditation awards.
- Allow customers to review products. Reviews provide a platform for customers to provide their feedback and, crucially, enable new customers to understand the quality of the product or service from an impartial perspective
- Capture emails for lead nurturing and remarketing, enabling you to continue communication with prospective customers and up/cross-sell to current ones
- Optimise for mobile and tablet. Mobile shopping has become a fundamental feature of online consumer behaviour, with 60% of consumers using mobile devices to discover a new service or product online
- A/B or split testing on an ongoing basis. This involves comparing two different versions of the same web page to see which one performs better to similar visitors at the same time. This level of conversion rate optimisation typically requires further development of your site to manage the content variations, or through the use of a third-party tool.
Measure your Ecommerce conversion rate optimisation success
In addition to your website’s conversion rate, there are a handful of other metrics that are important to keep track of. They indicate user engagement levels, and helping these metrics in the right direction will also boost your overall conversion rate:
- Bounce rate – The percentage of users who leave the site after viewing a single page. A high bounce rate shows that people aren’t staying long enough to complete the desired action of making a purchase, for instance.
- Exit rate – Not to be confused with the bounce rate. Your exit rate lets you know the last page users viewed before leaving the site. A high exit rate on a specific page is a red flag.
- Click through rate – The number of people who click a link to your website through an ad or email.
- Average session duration – This metric tells you how long people are staying on your site and how engaged they are.
- Pages per session – This is another engagement metric that tells you how many pages a potential customer visited before leaving the site. It’s simply total page views per session duration. More page views can mean more engagement, but can also mean a lack of clarity in your “conversion funnel” if there’s no end conversion.