You've huffed and you've puffed and you've finally succeeded in attracting a crowd of surfers to your site. But as every online merchant knows, that's only the first step. The real task -- the important task -- is converting those browsers into buyers.
The percentage of visitors you convert into spenders, that all-important sales conversion rate, is what powers your bottom line. Selling online is a numbers game: the total number of your visitors divided by your conversion rate equals the number of purchases at your site.
A good conversion rate can make up for lower traffic: a site with 50,000 visitors and a two percent conversion rate makes as many sales as a site with 100,000 visitors and a one percent conversion rate.
The point, of course, is that time and money spent improving conversion rate is one of the most effective uses of an e-tailer's resources. Even a modest conversion rate improvement offers "a huge upside potential," noted Jeff Seacrist, director of marketing for Web analytics firm WebTrends. "Small changes can mean big results."
Eternal Truths of Online Conversion
A vast army of experts has theorized and expostulated about improving online conversion rate. After you sift through their many strategies you'll find they agree on two basic truths.
First, the task of improving your site's conversion rate is never done. It's like mowing the grass: No matter how good it looks this week, you'll need to do it again next week because technology -- and customer tastes -- are always in flux. Experts agree that if you're not constantly looking for ways to bump up conversion, you're losing ground to your competitors.
Second, improving conversion means experimenting. Though there are industry standard techniques for improving conversion, each individual site will need to tinker and tweak, noting the results of each change as they go.
For example, divide your mailing list into two categories, and send a different offer to each. Which results in a higher conversion rate? This strategy of "A/B" testing, done on a consistent basis, provides a gold mine of knowledge about your specific customers and the offers to which they respond.
If you get discouraged about your conversion efforts, remember this: being aware of your current conversion rate and actively seeking to boost it means that you're in an elite group. Oddly, as critical as conversion is, a majority of e-tailers are not actively attacking the issue, studies have shown.
According to JupiterResearch, only one in five online retailers uses Web metrics strategically. That is, many merchants have some type of software package that generates traffic and behavior stats, but few actually refashion their site or strategies in response.
"Not a lot of customers are taking advantage of Web data to improve their overall results," Seacrist said.
While you're at it, it helps to know not just your own conversion rate, but also the industry standard. In e-commerce overall, the average conversion rate is 2.3 percent, according to a report in December of 2003 from Web analytics firm FireClick.
Suffering a particularly low rate are e-tailers in the electronics category, at 1.1 percent. Doing better are the fashion, home furnishing and travel sectors, somewhere between 2 percent and 2.2 percent. The real stars of e-commerce conversion are online merchants who use a catalog -- they enjoy a whopping 6.1 percent conversion rate. (It's this high because their buyers "are coming from a catalog and know what they want and just order online," said Bryan Eisenberg, co-founder of e-commerce consultancy FutureNow.)
There is no one single action an e-tailer can take to fully optimize sales conversion. Rather, it's an extensive list of activities, with each capable of contributing incrementally to your efforts. Consider the following:
Search me!
Your site's own internal search tool is arguably the best method you have for presenting customers with what they want. "Making sure your search works is huge," said David Berkowitz, an editor with research firm eMarketer. "The better the search is, the better the customer experience and the more likely those customers are to buy."
Your search engine needs to offer highly specific results to be most effective. If a customer enters "blue, men's, wool, sweater" they need to see results that are exactly that. "If that comes up right away, it's a heck of a lot more likely the customer will go through with the sale," Berkowitz said.
But building a highly specific search tool is easier said than done. There are so many possible ways a customer may think about your product, it takes a mind reader -- or plenty of close monitoring -- to know how they use your search tool. To see an industry leader, look at the search tool at Land's End It returns specific results, but moreover, each result comes up with a mini-sales pitch and a high-quality photo.
Tweaking your search tool, like conversion itself, is a process that's never complete and requires continued work for maximum returns.
"As search technology changes, your products change, and the seasons change," Berkowitz said. "There are so many things that can affect it."
If you're on a tight budget, you might be using an off-the-shelf search tool with limited capabilities. It's worth doing a cost-benefit analysis to consider investing in a better tool.
"It could be a fairly small commitment upfront for what you can get out of it," Berkowitz said.
Continued on Page Two: Simplicity, trust, rewards, and shipping.
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