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What Is A Good Conversion Rate In eCommerce?

By Maxime Pruvost on February, 25 2016
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Maxime Pruvost

What is a good conversion rate in eCommerce? Such a deceptively simple question, that has as many answers as the number of persons you ask. One will say 2%, it’s the eCommerce average. Another will offer “5%” anything less is too low. Rather than pop out a percentage that means nothing, the question could be split into several sub-topics. What is the true value of your conversion rate? What are the top converters doing that you don’t? Is the performance of your eCommerce depending on a high conversion rate?

 

Is the performance of your eCommerce depending on a good conversion rate?

 

As it happens, the first question is a way to take stock of what is happening in your eCommerce site. We are once again building a parallel between the shoppers’ experience, their behavior and the relationship you maintain with them. If you know your audience as you should, you already have implemented many ways to retain and reclaim.

 

How are you measuring your conversion rate? If your method is to do the maths with numbers of visitors versus number of transactions, chances are your conversion rate is low, average or high. This doesn’t help much.

 

If you are putting a lot of resource to bring fresh traffic over retargeting bouncers or gaining loyalty from past customers, your conversion rate is low. Fresh visitors don’t typically buy on a first visit. With no effort to get them back for a second tour, you have forfeited your chance to get revenue. A special offer on the landing page is not enough to get a visitor through checkout.
On the other hand, if you focus on reclaiming browsers after they just “window shopped”, with Adwords for example, your conversion rate is likely to be average. We are looking at a feeble 2.5%, 5% on a lucky day, rarely over 3% across the industry.

 

If you have a strong brand and a strong base of followers, then we might say your conversion rate is high. You have built loyalty and customers return to your site and buy your products or services over and over. Good conversion rate, for sure. Except you are not converting, per se. They are already true believers.

 

So is the performance of your eCommerce depending on a good conversion rate?

 

What is the true value of your conversion rate?

 

So is the performance of your eCommerce depending on a good conversion rate?

 

We are repeating the question right here for a reason. Yes, a high conversion rate points to success to some extent. No, a high conversion rate does not mean you are doing better than most. The core value of conversion is more than a percentage. It is intimately linked to profit.

 

High revenue is great, low profit not so. Once all expenses have been subtracted from sales, once you have paid advertisers and digital marketers, how does your bottom line look?

 

Conversion campaigns are mainly one dimensional. In that respect, you don’t focus enough on discrimination. That is, not all shoppers are leads you absolutely need to convert. Not all products are high margin enough to justify a special offer (restrictions should still apply), and not all shopping carts are worth retargeting via half a dozen emails.

 

The secret to a high conversion rate is in the qualification of your target. This is also more than going after margin. Your audience demographics play a role. Will you dedicate resources to understand everyone’s shopping behavior, or will you differentiate so you know you address your market? Segmentation has proven an effective method to go from average to high conversion rate.

 

To the question “what is the value of your conversion rate?”, we should answer with another question “what steps are you taking to qualify your leads?”.

 

What are the top eCommerce sites doing to get a good conversion rate?

 

The industry (ourselves included) writes a lot about site optimization, attention to detail and navigation and removing obstacles for a smooth shopping experience (all the way to payment). At this stage of running your eCommerce you are implementing best practices on a daily basis and test-adding (changing fonts, visuals, colors, button size and shape). All e-tailers do it, your competition included. The average conversion rate however, still hovers around 3%. By doing only what everyone else does, your performance is unlikely to reach the top.

 

Top eCommerce sites have something in common: they do more. They record high conversion rates because they think outside the box. When all else fails, do something different or unexpected. If you offer the standards of your industry, would you expect to obtain better results? Or focus on a niche where you can establish yourself as the reference, the leader, the trendsetter.

 

Another tool the leaders are using is smart remarketing. They don’t engage the same resources for an abandoned shopping cart due to payment failure as they would for one that looks suspiciously like a wish list. Remarketing is, again, about all the things to do to get it right: qualify your prospects and make it simple and efficiently direct.

 

Attempting an answer to “what is a good conversion rate in eCommerce” is fascinating. There is, once again, no clear answer such as: it’s 20% and you should do this and that to reach it. A good rate is anything higher than you are achieving; it is raising above the average; it is making your market’s statistics lie. It is, as we repeat over and over, about knowing what you do and what can make your customers tick (and click through).

 

Carts Guru solution offers a way to convert shopping cart abandonments into sales based on the same principles: qualification of a prospect and pertinent use of remarketing budgets. Engage your prospects directly and effortlessly via phone or text messages based on cart and customers characteristics.

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