Let’s cut straight to the chase; it’s conversion rate (the percentage visitors that turn into a sale).
It’s a clear indication customers are willing to buy, meaning you have what they want and the right people are getting to your site.
Do I have a good conversion rate?
This begs the obvious question, what is a good eCommerce conversion rate?
This really ranges depending on factors like…
- Can customers only buy directly from your website
(in that case conversion rate should be higher)
- Can customers buy else where
(For example in stores or on other website. This will reduce your conversion rate as customers tend to shop around)
A very rough rule of thumb is you want a 2% conversion rate, and anything below 1% is a cause for concern.
I’ve also seen conversion rates go as high as 12% and 5% – 6% isn’t uncommon.
My name is Iain Calvert and I setup Boom – Aussie Ecommerce Training to help businesses like yours, understand how to get the most out of their stores while working with great ad agencies like Sunny Digital.
Why is conversion rate so important?
Over the many years working in eCommerce (more than I care to admit) I’ve worked with and had access to many stats on eCommerce stores.
The first one I always check is eCommerce conversion rate.
Over the years I’ve realised that it sums up how a well a site is doing and if it has a chance of success or needs a drastic rethink.
Conversion rate is a great summary of a stores performance
Conversion rate not only takes into account what is happening on your site, like design, where visitors are coming from, but also what is happening in the broader market.
In demand products convert towards the top of the scale. This proves you have something valuable to sell.
However, if you have close competitors selling the same product or similar and they are putting a better offer forward. Could be the way they sell it, price or something else customers value.
It’s impossible to identify the one cause of a low conversion rate, as there are so many factors to consider, and not everything can be measured.
Increasing Conversion Rate
It’s really tempting to fire up Excel punch in a few formulas and project the impact on the business of increasing conversion rate for 1% to 2%. Sounds easy.
In reality you’re increasing conversion rate by 100%!
There is only one sure fire way to increase conversion rate and that is discounting your products significantly. This has other major impacts on the business and you can’t just rely on that.
There are very few silver bullets to increasing conversion rate (even though many an online guru will try and convince you otherwise). The trick is working out why less visitors are buying and if you can control that.
To figure this out you have to always be running split tests on your website. This can be done with Google Optimise.
This testing will help identify what appeals to your customers. When you know what your customers want and are willing to pay for, you always win in eCommerce.
That’s way conversion rate is the most important metric in eCommerce.