Converting visitors into cash-paying customers

If you are getting sales in your store because you are driving traffic, then you might believe that the best way to get more sales must be to drive even more traffic? You would be wrong… you need to understand ‘Conversion Rate Optimisation’ (CRO).

If you’re doing everything to drive traffic to your eCommerce website and you’re not getting the sales you expect, there is a reason for it: the potential shopper on your store is dropping off between landing on your website and buying something.

Converting your site visitors into customers makes every visitor exponentially more valuable. To make them more valuable, we must increase our ‘Conversion Rate’.

Conversion rate is one of the 4Cs of our 4Cs framework.

eCommerce conversion rate

eCommerce conversion rate is the percentage of store visitors who purchased something during a set period of time.

For example, 10,000 visitors in one month to your site and 100 conversions in this period means your store’s conversion rate is 1%.

Simple as that! Divide conversion into visitors and you have your conversion rate.

Why your conversion rate is important

Conversion rate is an important metric as it demonstrates how good your eCommerce store is at convincing shoppers to become customers. Increasing the conversion rate means generating more revenue – it is a simple equation. An increasing conversion rate makes every visitor more valuable.

CRO is the name of the process of turning visitors into cash

This process of improving the conversion rate is called conversion rate optimisation (CRO) – an umbrella term describing the process of persuading site visitors to take the next step using a process of structured tests and improvements.

Using CRO to improve your conversion rate means you don’t pay for more traffic and you don’t have to create a new product – instead, you are simply making changes to your site layout, words and design.

CRO is about making small, incremental improvements to the overall customer journey experience.

Conversion is a broad topic because it can be impacted by everything your shopper experiences on your site – it’s not just one thing. Conversion rate optimisation can be conducted on product pages, category pages, and, of course, on the checkout page. The latter can have the most immediate impact, so we will be talking about this in detail on its own this week.

The starting point for CRO is to understand that:

• every step in the buying process is a point of friction and gives the shopper a chance to reconsider
• there is no magic wand for optimising the conversion rate on your eCommerce store
• improving your conversion rate will decrease your customer acquisition costs
• the outcome of CRO activities is measured by an improvement in conversion rate and a reduction in shopping cart abandonment.

What is a good conversion rate?

‘What is a good conversion rate?’ is a question often asked by newbies to the world of eCommerce. The answer is always “it depends”!

The global average is between 1% and 3%. However, there are simply too many variables in terms of the type of product you are selling, the design of your site, and customer acquisition channels you use.

There are lots of factors that go into the decision-making process of your potential shopper when they visit your site and how well they convert from a shopper into a paying customer.

Seven factors that affect conversion rate:

1. How well targeted your customer acquisition strategies are, for example, Google Advertising.
2. The page layout (remember all the details on creating great product pages in Course 2?)
3. The headline copy and the sub headline.
4. The button colour (hint – if in doubt, use red or orange like Amazon’s ‘add to cart’ button).
5. The quality of visuals and photos.
6. The product or category type: food and drink weekly shopping have a higher conversion rate than home furnishing, for example.
7. The offer or promotion in place: a great 20% off promotion or a Black Friday deal will improve conversion rates.

Conversion rate by type of shopper

Most eCommerce platforms have analytics tools that provide conversion rate across a number of different measures. Conversion rate information is much more useful when analysed by different types of visitors and intent. For example:

• What is the conversion rate for first-time customers?
• What is the average order value for first-time or registered customers?
• What is the conversion rate by acquisition channel, eg, paid or natural search and social media?
• What is the conversion rate by product?
• What is the conversion rate by promotion or seasonal campaign, eg, Black Friday? Christmas?

You can use data from your store analytics to help find out these different conversion rates.

Conversion rates by product category

Conversion rates also depend on the value and consumer’s perception of risk associated with the purchase. Home furnishings conversion rates (0.4%) and home and garden conversion rates (0.6%) are relatively low as they have higher prices – and are seen as higher risks by shoppers if the wrong choice is made.

Consumers spend more time researching and comparing these categories due to the cost and may often purchase in-store because they wish to see the physical product. Higher price points can lead to lower conversion rates.

Food, drink and grocery shopping have the highest conversion rates as these are regular purchases, often weekly.

Bear this in mind when thinking through conversion rates for your eCommerce store.

Over to you

Now that you understand conversion rates and CRO, what are the immediate changes you think you might make to your store to improve conversion rate?

Leave your thoughts in the Comments section below.