Traffic acquisition is one of the most important investments that e-commerce startups can make. Without visitors to your website, there is no business.
However, getting eyeballs on your site is just half the battle as only a fraction of those visitors ends up buying from you. No wonder that Conversion Rate has become one of the most obsessed-over metrics. It measures the percentage of visitors who made a purchase.
The average conversion rate of global e-commerce enterprises is below 5%. This means that for every 100 visitors to your site, fewer than five will buy from you. For smaller sites and lesser-known brands, it is not uncommon to see conversion rates hovering around 1% and lower.
Conversion Rate Optimization (CRO) has become widely adopted by online entrepreneurs. To get the most out of your CRO program, do the following:
- Choose the right metrics
Don’t make the scope of your CRO programs too narrow. There are three ways to grow your business, all of which can be impacted by CRO:
- Increase the number of customers
- Increase the average order value
- Increase the number of times they buy from you
Overall site conversion rate can be misleading, because not every visitor is there to buy something. In the context of e-commerce, RPV (Revenue Per Visitor) is often a more appropriate metric as it combines Conversion Rate and AOV (Average Order Value) into one.
- Embrace incremental improvement
Businesses are founded on a range of assumptions about customer needs, product, pricing, value proposition and so on. In start-up mode, testing key assumptions early on can make the difference between success and failure. As you grow, there will constantly be new assumptions about ways in which to improve.
Central to CRO is the concept of testing these assumptions. A hypothesis is an educated guess about a change that is likely to move the needle. Instead of implementing the proposed intervention directly on the site, you first run an experiment to see its impact.
Don’t expect all of your experiments to be winners. Some will make no difference while others might even be negative. That’s the very point of it – to avoid making permanent “improvements” that actually hurt sales. An a/b test is the best way of finding out.
You may suspect, for example, that amplifying the guarantee will result in more sales. An experiment is set up, which shows the original page to half of your audience, while the other half sees the new variation with prominent guarantee messaging. To your surprise, there is no upswing in sales. Your hypothesis is therefore refuted, but you’ve learned something about your business and audience that could not have been uncovered in any other way.
This will fuel other insights. Should the guarantee be changed or is it simply not important to your customers? What other messaging might they find more compelling? What does this say about your positioning and value proposition?
To double your business in one go is virtually impossible. The way to do it is with incremental improvements. The more tests you run, clearly the more chance you have of getting winners. No matter how small the individual wins, when stacked together there is a compounded effect.
- Use an evidence-led approach
When deciding what to test, resist the temptation to follow your gut or copy competitors. That’s like throwing mud at the wall to see what sticks. Testing slots are limited, and you want to avoid the opportunity cost of random testing. Over time, data-informed ideas will outperform your hunches.
Google Analytics is a good starting point. Examine the visitor journey to see where people are dropping out of the funnel. Identify the pages and types of pages with the most page views. Typically, this is where you can make the biggest impact. Pay special attention to those areas with high bounce- and exit rates.
Analytics can reveal what is happening, but it won’t tell you why. That perspective usually comes from qualitative data. One good way of doing that is to observe users interacting with your site through a process called usability testing.
Simply give someone a task to perform on your site and watch them do it. Ask them to verbalise their thoughts so that you can hear what concerns or obstacles they might encounter. Don’t guide them if they get stuck. As painful as it may be, this is how you will uncover the most profitable opportunities. Stay out of their way, remind them to speak their thoughts out loud, and take lots of notes.
It doesn’t need to be a big exercise. Start with just 3 – 5 people; even one is better than zero. Choose people representative of your audience, rather than family or co-workers. You could also outsource it to online services like whatusersdo.com and usertesting.com, which will send you videos of users walking through the site or specific task you had set.
Arguably the most cost-effective way of getting insights directly from your users is by doing an email survey. Ask a few open-ended questions and allow for open text responses. Information about their buying decision is more actionable than demographics. What made them buy? Which competitors did they consider? Why did they choose / not choose your business? What would have made them buy more often? How would they describe your product or brand? It’s also worth asking non-buyers why they haven’t bought from you.
By considering different data sources, areas that are ripe for optimization will reveal themselves to you as patterns emerge. Run experiments to test each hypothesis without being emotionally invested in the outcome. Each win adds more customers to your business, and more dollars to your bank account.