Know your conversion rate

Written by Jamie Freeman

Calculating your website conversion rate is easy. Take the number of orders in a given period and divide it by the number of visitors for the same period. Multiply by 100 and bingo; your conversion rate. (Some people use total number of visits, as opposed to visitors, and both are valid in different ways.)

So, have you just done that? Ok. Unless you're doing very well you're probably looking at a frighteningly small number right now.

Let's say you're doing OK with your modest e-commerce operation, turning over £5,000 per month. Your average order value (AOV) is £25, so you're shipping 200 orders. You check your Google stats and it shows 15,000 unique visitors per month. Pretty good number, well done.

Your conversion rate, on those numbers, would be 1.33, which is actually not bad. Also, you're getting 15,000 people to visit your site, which is pretty good going. There are three obvious ways you can improve your business: boost your AOV, get more visitors, or improve conversion. You could of course aim to do all three, but directing your limited resources where it's most likely to bear fruit has to make sense.

Target: a 25% increase in sales

Can you persuade your existing customers to spend that much more per visit? Hmm. It's hard enough getting them to part with money at all in the current climate.

Can you get an additional 3,750 people to your site, really? You could pay an SEO person to spam your site and get your raw numbers up, but given that 98.67% of your visitors are simply turning round and leaving anyway, doesn't this seem like a hard route to take?

Let's look at it a different way. Currently 98.67% of your visitors leave without buying anything. Let's try to get that number down to, say, 98.34% Sounds doable, right? That would mean 250 sales per month, up from 200.

In case you missed it, let me run that by you again: if you can stop just 0.34% more people from turning tail you can increase turnover by 25%!

Great, let's do this

So, how do you do that? How do you get your conversion rate up from 1.33 to 1.66? Well, the answers to that could fill several books. We'll put some in future blog posts, but the numbers we're talking about are so small that small changes can result in very positive results. Here are a few examples…

Moving the position of the 'buy' button might make it more visible; changing the wording from 'buy now' to 'add to basket' could make it less threatening; clearly displaying your returns policy can make it seem less risky; re-organising your information architecture (IA) might make it easier for customers to find the product they're after. Optimising your image download size could mean the difference between someone seeing the product and sticking around to buy it, or leaving straight away in frustration and buying from a faster-loading site. The competition really is that stiff these days.

Small changes like these might seem like tinkering, but they can add up to a significant increase in sales and are by far the most effective way for you to see an upturn in business.


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