Practical Ecommerce

Website Conversion – Revisited

For those of you new to the concept of web conversion, I thought that it might be useful to address some of the key ideas around this strategy.

What is Conversion?

A website is a corporate resource, and like any other resource, it should provide a return on investment. That return should be measurable, meaning that the bottom line for any website is this: How, specifically, has the website grown my business today/this week/this month, and so on. Enter the concept of “conversion”. For a business website, there are typically three primary conversion goals:

  • generating leads;
  • selling products via ecommerce;
  • generating referrals.

The reason that I say this is because these are the primary actions that lead to real dollars. So, they’re the primary way for your website to produce a return-on-investment. When a visitor takes one of these actions, that is counted as a “conversion” (as in converting visitors into leads and customers).

How is Conversion Rate Calculated?

In order to calculate your conversion rate, you must identify two individual metrics: First, the number of visitors that your site receives, and second, how many of them take an action that you consider a conversion. Once you have those numbers, the math is simple:

Number of sales or leads / Number of visitors = Conversion rate (multiply by 100 for %)

By way of comparison, a “good” ecommerce site conversion rate is considered to be in the high single digits. For lead generation, a “good” conversion rate is the high teens.

If your site is “average”, you’ll probably be between 1-2% for ecommerce, and 4-6% for lead generation. Tips for Improving Conversion Rate Let’s assume that you’re looking to improve your conversion rate. There are basically two ways to do it:

  • Improve the quality of the traffic that your site receives. This involves being more selective about the sources of traffic – affiliates, ads (on and off-line), pay-per-click keywords, and so forth. It’s likely that you’re paying for these visitors (although it might not be in such an obvious way as with pay-per-click), so improving the quality of traffic is likely to save you money in direct marketing costs.
  • Increase the appeal of your site. This will increase the percentage of visitors to “action-takers”. The problem here is that the word “appeal” is vague, and knowing how to make a site more appealing is not always easy.
  • Here are few specific tips to increase your site’s appeal:
  • Know your Audience I’ve said this before, but it bears repeating. Understanding your target audience is the key to creating a high conversion website. Once you understand who your visitors are, you can tailor design, layout, structure, and message to meet their needs. A site that feels “just for me” for a specific group will elicit a high conversion rate from that group.
  • Build Credibility First, you reduce the number of “red flags” on your site, then you work to build up credibility. People only buy from websites (and companies) they trust. BBB logos, testimonials form past clients, and a professional look and feel can all help to build credibility.
  • Make Things Easy Once you understand your target audience, construct your site in such a way as to deliver maximum value with the minimum number of clicks. Predicting the major information needs of your visitors, and providing clear navigation to that information will make your site a simple and effective source of information. We’re all busy, and a simple website is a pleasant surprise that your visitors will appreciate!

Mat Greenfield

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  1. Legacy User January 5, 2007 Reply

    You are correct, Adam. Thanks for pointing out that error. I'm going to make the change in the article.

    — *Mitch Bettis*

  2. Legacy User January 5, 2007 Reply

    Hi Matt,

    Isnt the formula for conversion rate sales or leads/number of visitors as opposed to multiplying the two?

    — *Adam*

  3. Legacy User January 8, 2008 Reply

    How did you determine that 1-2% is average for ecommerce?

    — *Eric*

  4. Legacy User March 10, 2008 Reply

    If I have 1,000,000 visitors per week how can I determine what my revenue will be from Ads. I sell no products, I am an information site.

    — *jackie*