While focusing on driving traffic to your e-commerce store is important, it doesn’t guarantee revenue. Once a visitor gets to your website, you need to ensure that you have the elements in place to encourage them to take a desired action, which will ultimately lead to generating revenue.
Converting browsers into customers is one thing every e-ecommerce retailer should be focusing on in 2020. CRO gives you the ability to increase revenue without having to change the way your business operates, like having to offer in a wider range of products or services or increase your digital marketing budget. You optimize what you already have to generate higher revenue.
image source: smartinsights.com
Your conversion rate, unlike click-through rate or cost-per-click, illustrates how good your marketing is at getting people to do what you want them to do (thus called converting). So, in laymen’s terms, the higher your conversion rate, the better your marketing is!
“Herein lies the magic of the conversion rate: You just optimize what’s already there and thus create more profit from your existing customers and traffic.” - Neil Patel.
In this piece, we’ll go over the basics of conversion rate optimization, what exactly your conversion rate is and what is means, how to calculate it but, most importantly, how to improve on it.
What is Conversion Rate Optimization?
Conversion Rate Optimization is the process of increasing the percentage of your website visitors who complete the desired objective. CRO is such an important part of your online marketing strategy, as the optimization of your landing page and website will in turn produce more conversions from your traffic.
CRO helps you get the most out of the traffic you already have. For example, even without increasing the amount of traffic to your website, improving your conversion rate from 2% to 4% will double your conversions. If you’re not optimizing your conversion rate, you’re most likely wasting your money.
What is a Conversion Rate?
Simply put, a website’s conversion rate is the percentage of visitors who complete your site’s goal (a conversion), whatever that goal may be. It’s one of the best ways to measure the performance of your advertising campaigns. Therefore, a high conversion rate is indicative of successful marketing and/or web design conversions. For example, online retailers view a successful conversion as the sale of a product to a consumer whose interest in your product initially began as a banner advertisement click.
Measuring a Conversion Rate
Calculating conversion is a fairly simple formula. You simply divide the number of conversions you receive in a determined timeframe by the total number of people who visited your web site or landing page, then multiply it by 100. Conversion rate = (conversions / total visitors) * 100.
For example, if your site had 20,000 visitors and 3,402 conversions last month, your conversion rate is 17.01%. Simple enough, right?
Conversion Rate Benchmarks
You may or may not already know this, but conversion rates vary considerably depending on your business, industry, traffic quality, what you’re selling and even down to the specific conversion action it is you’re tracking. During the second quarter of 2019, 2.58% of global e-commerce website visits were converted into purchases, with the US having a rate of 2.57%.
image source: statista.com
While figures differ depending on who your customers are, which industry you trade in, who your competition is, and what you sell, those are the global e-commerce figures that you can use as a benchmark.
Additionally, it’s important to remember that a conversion isn’t the same thing as a purchase. While measuring conversion rates is useful data which can help build on or improve one’s success going forward, the goal of marketing isn’t just to produce conversions, but rather to produce sales!
Tracking Conversion Rates
While conversion rate may not be the definitive measure of success, it is a great way for tracking performance. Afterall, the point of gathering this data, and improving on it as your start to discover what truly works for you, is to improve your e-commerce CRO.
Among the many programs out there, Google Analytics is a great way to track your website’s conversion rates. You can create a funnel that tracks your visitors in different stages of the buyer journey. This allows you to segment your site’s visitors from their initial visit until they go ahead and make a purchase or take the desired action.
1. Reduce Page Loading Time
It’s true. There a few things more frustrating in 2020 than waiting for a website to load-we’re a very impatient species.
According to Google, the probability of bounce increases 32% as page load time goes from one to three seconds on mobile. Time is limited and attention spans are short in today’s world, so having an e-commerce website that takes longer than 3 seconds to load is pretty much like digging your own grave. No, doubt you’ve done the groundwork to drive traffic to your site, but to then just to let it disappear in an instant is madness.
3 quick things you can do to make sure you’re not leaving money on the table:
• Test your Speed – Use Google PageSpeed to figure out your site’s baseline speed.
• Check your hosting plan – the extra few dollars for a quicker performing version a month can be worth the investment
• Optimize images – your images can’t kill your sites performance
Improve your load time to improve your revenue, it’s simple.
2. Generate a Sense of Urgency to Make Your Customers Act
Sometimes buyers need a bit of a push to make a decision. Using scarcity, urgency, and exclusivity in regard to your product or service can be useful in getting your potential customers to make a purchasing decision quickly
Telling your customers that they have a limited time to act will help them make a purchasing decision. Terms like: “only a few left!”, encourage customers to make a choice there and then, rather than go away, think about and potentially not return at all.
Online hotel retailers like Booking.com are masters of creating urgency.
They use tactics like letting visitors know how booked the searched area already is, they offer coupons for specific hotels that are only valid on that specific day, they tell visitors how many people are currently looking at the specific hotel they’re considering, they advise when the hotel was last booked plus how many bookings have happened that day, as well as identifying how many rooms are left.
image source: booking.com
If those urgency tactics don’t make visitors act, then who knows what else will!
The best ways to create a sense of urgency are to reduce the following:
- Time: For example, “this offer expires at midnight tonight”
- Supply of goods or services: For example, “only 1 room left”
When creating a sense of urgency, you shouldn’t try to trick the customer into acting, it needs to be completely genuine. Consumers are smart, and will quickly pick up on dirty tactics. Don’t risk losing their trust, rather use this tactic as a smart move in an authentic way to encourage customers to act.
3. Embrace A/B Testing
A/B Testing occurs when you split your traffic into two different groups, with both groups seeing different versions of your website.
You can test things like:
• Headlines and design elements like colors
• Location of buttons
• Page layout, including sidebars
• Content describing your offering
• Media including images, videos & text
Crazy Egg, founded by Neil Patel in 2005, allows websites to understand what’s working, fix what isn’t, and test new ideas.
Wall Monkeys (a decals business) used Crazy Egg to generate user behavior reports and to run A/B tests. They wanted to optimize their homepage for clicks and conversions. They monitored user behavior on their website and ran A/B tests according to those behaviors. Running a few different A/B tests resulted in conversion rate increases from 27 to 550%!
While A/B testing may seem like overkill, it’s certainly well worth the effort.
4. Enhance Your Mobile Experience
With a 67.2% share of global retail e-commerce sales in 2019, making sure you’re proving the best possible mobile experience to customers is key for conversion rate optimization. Smart phones now play a large role in the buyer experience, whether it’s the research portion or the actual purchase.
image source: glassgardens.co.za
A mobile-first philosophy needs to be adopted in order to provide the ultimate customer experience. If you overlook this part of the buying process, you’re essentially overlooking a large portion of potential customers, and therefore revenue.
Use these top e-commerce CRO tips to improve what you’re already doing, without having to make major changes to the way you do business. CRO should be a major focus for your business not only to increase sales, but also to provide your customers with the best possible experience.
Providing a seamless experience tells them that you care about them and will ensure that they stay loyal to your brand and keep coming back.