Basket Cases – Improving Conversion

This is the second part to discussing conversion in our Basket Cases blogs.  In this blog post I carry on with explaining how improving conversion can be a valuable tool for e-retailers to improve sales and gain better understanding of their online presence.

 Improving Conversion

• Basic conversion rates
• Setting goals for your website
• Factoring variable effecting conversion
• Testing changed variables
• Feedback loop

  In the last article I discussed “what was a conversion rate”, in this article we further discuss this topic and understand some more complex issues behind conversion rates and how to understand and monitor them.

To further and monitor your conversion rate you must understand the basics of calculating the conversion rate:

 Completed Actions / Total Number of Visitors = Conversion Rate x 100

 We also understood that in different industries and retail sectors have different conversion rates, they also vary dramatically vary when specific industries are compared side by side.  On average the conversion rate in the retail sector is 2%.   Most people think this is extremely low when they first start off their e-commerce shop.  Unfortunately we would all love our shops to have a 50% or 100% conversion but with the increase in competition the internet and the price of e-commerce technology coming down in price.  The e-retail market has opened up to anyone to wish to invest.

 Therefore monitoring and utilising the analytical reports available to webmaster and site owners is essential to improving and increasing conversion on your site. 

 Goal setting, what is this?  Why should I do it?

Goal setting is a form of setting the business targets.  Ensuring sales, visitors and completed actions are carried out through the website and that the website performance is at an optimum.  All business should set weekly, monthly and annual goals to attain; this is no different to businesses on the web. The only difference between the two different types of business is that results can be monitored 24 hours later or in some cases in real time, ensuring changes can be made to variables affecting the conversion rate quicker and results are acted on faster.

 The factors effecting conversion rate and therefore the site are numerous.  However, the normal factors are seasonality, traffic, price, categories of products, pictures, description of products and check out processes.  Because any of these factors can effect conversion rates, monitoring and changing each of the factors involve has to be implemented through a feedback loop system.

 What is a feedback loop and how do I monitor it?

Your average feedback loop ensures that if a changed factor has not improved conversion then a further change of the factor is needed.  For example if price is the variable factor:

 Price of Champagne initially £2,000 per bottle, change variable price through special offer down to £1,000 per bottle to see if there is an improvement in conversion.

 Variable factor (price)

The original price is £2,000 and original conversion was 1.2%.  Goal was 3%.

Changing the price to £1,000 the new conversion rate is 2.2% not quite the goal achieved, it therefore needs to go through the feedback loop again and change the price down to £800 and placed through the feedback loop again. Changed prices are £800 the new conversion rate is 3% and therefore the goal set has been achieved.

 Testing the new variable and monitoring the new conversation rate does take time, so this process can be a lengthy one depending on the product or service sold.  But by using this feedback loop and monitoring the analytics very carefully it can be a very successful route to maximising your presence on line.