Turning traffic into action: Improving conversion rates

In this Industry Insight session, we examined the importance of good conversion rates. Topics included: how to monitor conversion rates, average conversion rate by retail sector, factors affecting conversion and tips to improve your own conversion rate.

What is conversion?

Conversion is when a visitor becomes a customer or a prospect, by buying a product, requesting a quote or registering for a newsletter. Your site’s conversion rate is the ratio between the number of conversions and the number of visitors.

Monitoring conversion rates

• Use log analysers or traffic analytics packages
• Look at bounce rates and traffic quality
• Create funnels to identify where customers drop out in a process
• Conduct usability trials (perhaps with eye-tracking) to identify any problems affecting your current site
• Study conversion rates for each type of referrer (direct traffic, landing page, search, PPC, affiliate)
• Don’t forget the possibility of offline conversion (online research and offline purchase)

Average conversion rates to expect by category

Sector	Conversion rate
Catalogue	6.1 per cent
Software	3.9 per cent
Fashion	2.2 per cent
Travel	2.1 per cent
Home & furniture	2.0 per cent
Sports	1.4 per cent
Electronics	1.1 per cent

0.5 per cent is a typical conversion rate while 8 per cent is excellent.

What factors affect conversion?

• Product type
• Price
• Competition
• Time of year
• Site design
• Delivery times and charges
• Returns policy
• Long term relationship with customers
• Source of traffic (motivation of customer)

What might be negatively affecting conversion?

• Price
• Customer worries: delivery, security, privacy, trust
• Customer unable to find what they are looking for
• Lengthy registration/abundance of unnecessary questions (e.g. date of birth)
• Lack of information (returns policy)
• Surprises (e.g. changes in interest rates/credit crunches)
• Too much choice
• Technical faults or confusion
• Poor quality traffic from untargeted sites

How can you improve your conversion rate?

• Design your site around clear customer journeys
• Use landing pages to make site content immediately relevant
• Demonstrate value and benefits of products
• Directly address customer concerns through editorial
• Show that other people have enjoyed the product or service
• Provide decision support tools
• Clear calls to action
• Eradicate all technical errors
• Streamline the shopping process
• Tightly integrate with backend and payment systems

A few things to try

1.Set benchmarks so that you can monitor conversion rates and track improvements over time: this should be done regularly, once a week or once a month, depending on the level of sales.

2.Run a usability test with an impartial user (someone external to the company that has not used the website before).

3.Make the purchasing journey clearer: landing pages, bigger buttons, clearer pricing, fewer steps.

4.Recover lost orders by emailing customers who do not complete checkout.

5.Add persistent baskets to allow customers to shop without searching again.

6.Targeted traffic building for customer groups with the potential to be loyal and valuable in terms of recency, frequency, monetary value (RFM) and advocacy.

7.Customer loyalty programs - help people buy from you again, incentive offers in newsletters, rewards in the form of promo codes for high value shoppers.

8.Have a clear alternative to purchasing. For example if a customer isn’t ready to make their purchase let them add the product to a wish list or bookmark it.