eCommerce Conversion Rate
eCommerce companies often use the conversion rate to measure their degree of success online. If your company generates one million dollars of sales per year, a 10% increase in the conversion rate can contribute to an increase in profits ranging from thousands to tens of thousands depending on what you sell and your overheads. The eCommerce conversion rate for your store is something that you should pay close attention to. Tracking this metric in detail enables you to analyze problem areas and optimize your site accordingly to increase your conversions. Sometimes, all that’s required is a subtle change in something that you may not have picked up on. Other times, there may be more work required but without placing importance on your eCommerce conversion rate and tracking it, you may be leaving a lot of money on the table.
What is Conversion Rate in eCommerce?
Blogs and informative websites would consider email subscribers, eBook downloads, webinar signups, and other forms of user-submitted actions as a conversion, but an eCommerce website can also incorporate these elements too.
An eCommerce conversion rate is based simply on this formula:
What percentage of users buy something based on the total number of website visitors?
The conversion rate can also take into account those who place an item in the cart or add the products to their wishlist, but this is the simplest way to look at it. In short, everything is related to the perspective from which you want to observe your online store, but everything would ultimately come down to sales.
How to Calculate eCommerce Conversion Rate?
Your eCommerce conversion rate formula will depend on what factors you want to consider. In a basic sense, if an eCommerce site has 100 visitors and 10 of them buy something, the conversion rate will be 10%.
If the site has a good number of visitors but they do not purchase and therefore the conversion rate is particularly low, you probably have a big underlying issue that’s causing this. In this case, the crux of the issue is hard to be found in the product you sell, but more what surrounds it; your website.
Sometimes the problem is to be found within the structure of the site, which may be confusing and not very intuitive. This comes down to user experience, and if your website isn’t friendly and easy for someone to use and navigate then you’re going to lose sales.
So when is a conversion rate considered “good”? There’s no specific number that’s considered to define this because everyone has their own personal goals and targets. There are those who will jump with joy at a conversion rate of 2% and those who would eat their hands at a rate of 5%.
It’s all relative to the person and their industry.
This also depends on how much has been invested into the site such as marketing as well.
What if you have a 2% conversion rate and have generated those sales without spending a single dollar?
Then, you attain a 3% rate having just spent thousands on advertising your store?
Consequently, you would be disappointed with only a 1% increase after having invested so much more into the venture. This is why it’s so important that you optimize every element of your website before you start promoting it. You don’t want to spend a lot of money on advertising to find out that you never enabled the shopping cart or checkout system.
What Contributes to My eCommerce Conversion Rate?
Again, this would depend on the elements you have incorporated into your website.
For an eCommerce site that just sells goods/services and has no other forms of content, then the conversion rate is simply defined by the amount visitors divided by the number of sales.
If your website utilizes a content marketing strategy, then there are many types of conversions that could contribute to the rate, depending on how you consider them.
Let’s start with the most traditional conversions:
An online purchase
Completing a form on a landing page
Subscription to a service
Subscribing to a Newsletter
Signing up for an account or other specific areas of a website
Downloading files such as ebooks, pdf, infographics, and other lead magnets
Landing from organic Google results and other search engines (SEO)
Sales from Google AdWords
Interactions on live chat
On Social Media:
All these elements, albeit on the surface are minimal but can do a lot when put together. They gradually lead the consumer to take the most important final action; making a purchase.
Now the question is:
Do you track the statistics of every activity we have just mentioned?
If the answer is NO, it’s time to do it.
Knowing these specific details can allow you to optimize your channels accordingly.
You can analyze exactly where your customers are coming from and then go for gold targeting that channel.
After you understand what works and what does not, you can direct users to one route or another, thus increasing sales opportunities and your eCommerce conversion rate.
How to Track Your eCommerce Conversion Rate
There’s a range of third-party tools you can use to track your eCommerce conversion rate. Depending on what your goals are and what features you want to integrate into your site, the tools that you use will vary.
Every website should have Google Analytics integrated into it.
Studying the reports from Google Analytics allows you to constantly improve your strategy, not based on last-minute improvisations or sudden insights, but based on real data.
For example, Google Analytics allows you to understand how visitors behave on your website such as:
Where the traffic comes from
What are the most visited pages
Do your visitors mostly use mobiles or computers
What is the most used browser to access the site
To understand what the consumer does on your site you have to ask these types of questions and above all try to respond to each one using the data provided by Google Analytics. This tool can give you a lot of valuable insight into your visitor’s behavior and also enable you to optimize your site accordingly to increase your conversion rate.
Where The Traffic Flows
You don’t want to visit a popular page and discover that there are broken elements and the users aren’t able to perform any actions.
If there is an article on your blog that receives a large number of visits daily, you must use it to increase conversions, directing visitors to the product pages so they can be more inclined to purchase from you.
You can also create supporting content for your most popular pages as well. This means content that is very related and of a similar nature, that the readers would highly likely want to see.
Where The Traffic Comes From
An amazing part of optimizing your conversion rate with Google Analytics is the ability to see where your traffic comes from.
This is truly powerful because you can see exact web pages on the internet that directs visitors to your website. You can then up your efforts through that particular channel, as it’s already proven itself to be effective in driving traffic to your site.
What The Users Are Driving
In recent years mobile devices are at the center of a huge revolution: mCommerce. This term indicates the increasingly widespread habit of making purchases via mobile devices, such as smartphones or tablets. In fact, the majority of internet browsing across the world is performed on these types of devices.
You certainly can not neglect this aspect, and if you notice that most of the traffic comes from mobile devices, hurry to optimize your platform or create an ad hoc marketing strategy to get traffic.
The Model The Visitors Are Using
You may find that most of your visitors use Internet Explorer (we know) and you’ve never tested if your pages are compatible with this browser. Test your website for every browser you know. The main ones are, in addition to Internet Explorer: Chrome, Mozilla Firefox, and Safari.
If your website works across the board on those three browsers, you’re probably in the clear. But, it should work on every type of browser if possible in order to maximize your conversions, especially if your target market has a preference for a particular browser.