The Importance of Conversion Rate Optimization
July 16, 2018
Conversion rates are one of the most important key performance indicators for successful businesses. Sadly, many businesses fail to convert their audiences because they focus primarily on increasing traffic instead of interacting with their potential customers. You can prevent this loss of potential sales by switching your mindset and focusing on conversion rates.
What is eCommerce conversion?
A conversion rate is the percentage of users who complete a desired action. Depending on your goals, that desired action could be completing a purchase, signing up to your mailing list, providing a review, etc.
To calculate your conversion rate over a set period:
Keep in mind, conversion rates vary by industry, however according to Smart Insights, in 2017 the typical conversion rate was 2.48%.
So, when you’re planning your next marketing campaign, keep in mind what your conversion rate is and that there’s always room for improvement. Marketing can be expensive, so the higher your conversion rate, the more bang you get for your buck.
Why should I increase my conversion rate?
Conversion rate optimization (CRO) helps to increase your sales volume while spending less money increasing traffic – overall, a greater return on your marketing investment.
The Leaky Bucket
The Leaky Bucket analogy describes the process of customer gain and loss. In effect, when businesses primarily focus on increasing traffic, they’re putting their website visitors into a leaky bucket. Instead of preventing these visitors from ‘leaking’ away, the business keeps topping up the bucket with new visitors. Through this process, the business tends to have a lower return on their marketing investment compared to businesses who optimize their conversion rates and focus on customer retention.
The math is pretty simple:
By increasing your conversion rate by just 1% you can double your revenue without having to increase spending to drive traffic to your store.
How do I increase my conversion rate?
There are several tactics for optimizing your conversion rate to help improve your overall user experience and online sales.
|A/B Testing||Experiment with design changes on your website to evaluate what works and what doesn’t.|
|Collect Emails||By building your email list, you can follow up with potential customers even if they leave your website. Email is the highest sales converting channel with the greatest return on investment. Drip email campaigns can help you automate the process by sending content directly to the reader’s inbox.
|Incentives||Incentives such as free shipping, coupons and discounts are a great way to ensure customers complete their purchase. Hidden shipping costs are the number one reason that people abandon their shopping carts.|
|Screen Pop-Ups||Pop-ups are great for capturing visitor’s attention with a clear call to action. You can use them to advertise your new promotions, offer attractive prizes and to help grow your email list.|
|Web Forms||Web forms are another great way to grow your email list. Keep in mind, the more data fields you include, the more barriers to entry you create which may lower your conversion rate.|
CRO is a continual process that needs to constantly be evaluated to improve the website experience for your customers. DeepMarkit’s Gamify users have converted an average 10% of their traffic into email subscribers, which is 300% more than the industry average. For many of your visitors, conversion is a process. It may happen on their first visit, or it may happen on the tenth. That’s why we emphasize capturing emails on their first visit, so that you can nurture your relationship via emails.