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How to Get a Handle on Your Average Conversion Rates

Updated on May 15, 2014

Conversion rate is often considered the life and blood of any e-commerce business. Broadly put, conversion rate is a phrase commonly used in the e-commerce industry to define the process of converting visitors into customers. Since good conversion rate is a key performance indicator used to assess effectiveness of any e-commerce site, a majority of site owners and managers are seeking answers to the all important questions such as what are average conversion rates and how are these rates compared.

However, there is no simple answer to these seemingly simple questions, because of two prime reasons – there are too many variables at play and there is no 'right’ or 'good’ conversion rate. It is crucial to understand here that the concept behind calculating conversion rates is to evaluate why only some visitors convert into paying customers and the rest bounce back.

Factors Affecting Average Conversion Rates:

An understanding of the different variables at play in determining the average conversion rates is important to steer an e-commerce enterprise toward the ultimate goal of maximizing sales and profit. Some of the key factors that govern conversion rates include:

  • · Nature of Industry
  • · Known sources of traffic inflow and where this traffic is diverted to from a landing page
  • · Universality of appeal
  • · Volume of new visitors vis-à-vis returning visitors
  • · Effectiveness of marketing campaigns, both your own and that of your competitors’
  • · Product variety and pricing
  • · Payment options and security

While these are the key factors at play that are universally applicable to conversion rates of e-commerce sites irrespective of the nature of dealings, the list is not exhaustive in itself. More variables may come into play depending on the nature of operations. However, concentrating on these few basic tenets will at least put your business in the right direction for an improved conversion rate score.

How to Improve Average Conversion Rates

The need to look beyond headline conversions and delve into the details of segment conversion by analyzing the behavior of different categories of visitors is also an exceedingly crucial factor to bear in mind while benchmarking conversion rate. There may be a hundred ways to improve conversion rates out there, and which one works the best for you depends entirely on your e-commerce niche and target customer base type. Here is a lowdown on four sure-shot ways to improve inflow of targeted traffic and consequent conversion rates for e-commerce sites:

  • · SEO Conversion Rates: SEO is a great way to increase inflow of organic (or free) traffic to your website, and research has proved that targeted organic traffic inflow offer a better median and average of conversion rates than any other form. Organizations running e-commerce sites claim to have experienced wide variability in conversion rates of traffic flowing in organically.
  • · Device Conversion Rates: Your potential buyer is no longer dependant on computers and laptops to for internet usage, and e-commerce sites stand a good chance of hitting a homerun with conversion rates by tapping the effectiveness of trading through platforms such as tablets and smartphones. This trend calls for proactive measures such as offering buyers a personalized platform through mobile optimized sites and apps.
  • · Referrer Conversion Rates: Market research into the buying trends and habits of online buyers have considerable effect on the conversion rate. Surprisingly, popular social media networks such as Facebook and Twitter offer conversion rates of 1.08% and 0.22%, respectively; whereas platforms such as AOL search and Bing emerge as front runners for improving conversion rate with an average of 4.48% and 3.03%, respectively.
  • · Paid Traffic Conversion Rates: While organic traffic rules the roost when it comes to optimizing average conversion rates, paid search traffic isn’t too far behind. Adopting tools such as pay-per-click (PPC) ads to improve your online visibility can also result in improved traffic and better conversion rates. However, research data shows a lack of consistent pattern when it comes to conversion rates through paid traffic searches. There is an element of trial and error involved in improving conversion rates through paid traffic, and therefore, its viability must be taken with a pinch of salt.

Decoding conversion rates is simpler if you adopt a micro approach of analyzing the behavior of different visitors, vis-à-vis their intent and buying abilities, as opposed to looking at the entire bulk of traffic from a macro prism. An in-depth analysis of factors such as referring channels, customer type, search options, product categories, and sales and promotion strategies can help in pinning down the right variables to look out for for an improved conversion rate.


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