Show-Me-The-Money Conversion Ratios
When I begin an ecommerce optimization engagement, there are four key ratios that I immediately look for. And as strange as it might sound, the site’s overall conversion ratio is not one of them — at least not directly.
To be fair, the four ratios that I’m primarily interested in are actually sub-components of the site’s overall conversion ratio. However, these more-specific ratios provide me with a lot more information than I could ever get from the overall percentage alone. As I perform my initial diagnostic assessment, understanding these four ratios allows me to very quickly develop a solid understanding of where the biggest opportunities for profitable improvement are located.
In effect, these four ratios “show me the money.”
While each of these ratios would require its own article to fully explain, I’ll cover the basics here: What each ratio is measuring; what levels represent potential red flags; and even some of the root causes and problems I often encounter.
The Visit-to-Decision-Page Ratio: 60 Percent
A “decision page” is where your visitors are presented with an offer, such as a product or service, its associated benefits and features, its price, and a call to “buy” or “add to cart.” It often helps to think of these pages as the pages immediately preceding the shopping cart.
Dividing decision-page visits by overall visits gives you the percentage of visits where your offers are actually being presented. Or conversely, you can see the percentage of visits that leave your site before even getting into a position to evaluate your offer.
Given the nature of site traffic these days, a certain amount of fallout is expected. But a ratio of lower than 60 percent is often a serious red flag. Inadequate ratios at this point in the funnel typically indicate poorly targeted or wasteful traffic generation; entry pages that are bloated or slow; and/or inefficient product selection tools or navigation design.
The Decision-Page-to-Cart Ratio: 30 Percent
This ratio represents the next step in the sales funnel: The transition from decision pages to the shopping cart. Dividing cart-addition visits (that is, the number of times a product or service is added to a cart) by decision-page visits gives you the percentage of visits where the presentation of your offers is resulting in a demonstration of purchase intent.
A visit to a decision page is, by its very nature, a fairly qualified visit. As a result, a ratio of less than 30 percent converting to the shopping cart stage should draw your attention. Low decision-page-to-cart ratios can be an indication of strategic problems with your offer—uncompetitive pricing levels, inadequate product options or feature sets, shallow information, or poor value articulation.
The Cart-to-Checkout Ratio: 60 Percent
Next up is the ratio that represents the percentage of shopping carts that are taken forward to actually start checking out. Typically, this is the conversion rate between the shopping cart and the first step of your checkout process. This is yet another level of qualification as prospects at this stage are getting dangerously close to becoming actual customers.
As visitors use the shopping cart for a variety of reasons (e.g. to estimate “landed” order totals), some level of abandonment is again expected. But ratios of less than 60 percent usually warrant a closer look. Root causes behind apparent fallout at this first checkout step can include slow SSL, poor cart presentation, uncompetitive shipping rates, unexpected sales tax, coupon code confusion, and overly aggressive cross-selling and up-selling.
The Checkout-to-Order Ratio: 75 Percent
This last ratio is likely the most difficult ratio to look at because it represents the percentage of initiated checkouts that actually result in a completed order. Understandably, losing orders at this late stage of the sales funnel is extremely frustrating and hard to accept.
Ratios of less than 75 percent at this deepest part of the funnel should trigger a focused diagnostic effort. There are a number of underlying causes to consider: Slow-loading SSL pages, limited payment options, forms with usability issues, unnecessary process steps, required registration, and inefficient database queries, just to name a few.
When it comes to improving ecommerce performance, it can be very difficult to know where to start. It can also be a challenge to make sure you’re addressing the real issues and problems. But those tasks become a whole lot easier when you break the ecommerce funnel down and begin measuring the transition points within.