Practical Ecommerce

Conversion Tip: Which Conversion Rate to Measure?

“Conversion Tip” is an occasional feature where we publish a single conversion-related suggestion that could help ecommerce merchants improve the percentage of visitors who ultimately become customers. For this installment, Charles Nicholls, the founder and CEO of SeeWhy, a conversion and cart-abandonment-recovery firm, explains two key conversion definitions.

Charles Nicholls

Charles Nicholls

Charles Nicholls: “The website conversion rate is one of the key measures of the health of an ecommerce website. But there is sometimes confusion about what this rate actually measures. The two key conversion rates that are most commonly used are:

  1. Visitor-to Sale Conversion Rate. This is the percentage of unique visitors that purchase in the same web session.
  2. Funnel Conversion Rate. This is the percentage of unique visitors that place an item in their shopping cart and purchase in the same web session.

“The Visitor-to-Sale Conversion rate averages 2 to 3 percent across the ecommerce sector, though some websites get upwards of 20 to 30 percent, but these are exceptional sites. The Visitor-to-Sale Conversion Rate really isn’t all that useful. It doesn’t tell you much about your site that you didn’t already know, and it’s hard to get any real insight into what’s going on.

“By contrast, the Funnel Conversion Rate tells you how effective your shopping cart process is at converting visitors into customers. On average, 30 percent of visitors that place items in the cart go on to complete the purchase in the same session. It is particularly useful to look at it over time, as changes in the Funnel Conversion Rate are intrinsically much more important than the absolute number of sales.”

Charles Nicholls

Charles Nicholls

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Comments ( 2 )

  1. Arturas Kvederis July 28, 2010 Reply

    Very true, if you are not measuring and analyzing conversion rates you are missing opportunities that are reachable by hand. I’d determine four major steps in the conversion funnel for basically any ecommerce website:
    Visitor -> Browser -> Shopper -> Buyer. And on each step valuable potential customers are lost. We’ve been working on a tool that would allow to see the potential of missed revenue opportunities based on ROI analysis – http://sysiq.com/conversion-funnel/
    It also provides insights on the priority website improvement areas.

    Regards,
    Arturas
    http://sysiq.com

  2. Steve @Erraticblog August 2, 2010 Reply

    On avg, 30% funnel rate… that’s really nice to see since I’m getting around 70% at my online store. I guess I’m doing things right :-)