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How To Properly Analyse Your eCommerce Conversion Rates

 ecommerce conversion rate formula

One of the most common questions in the world of eCommerce is - What is a good ecommerce conversion rate?

First, this assumes that you are properly tracking your site conversions with intelligence software like Google Analytics. Either by setting up a "goal" for a successful checkout page URL or by integrating with "eCommerce tracking" for a more in-depth look at your traffic & revenue.
Let's get right to the point and address some typical eCommerce conversion rates. From my experience, a general rule of thumb is that anything under 1.00% conversion is alarming. If you are receiving a decent amount of traffic in your industry and have a conversion rate this low you need to first look at your traffic and make sure it is at least relevant to your content or products. Yes? Then it’s time to address some of the standard web usability patterns and design aspects of a "nice" eCommerce site.

From 1.00% and up we are entering what I feel are typical eCommerce conversion rates. I didn't say good, but typical. If you fall somewhere between 1.00% - 2.50%, you can at least feel comfortable knowing that you are not alone. This is where most eCommerce sites fall as far as I've seen.
If you're getting 2.50%+.. Good for you! No really, you are doing pretty well. Unless you are paying a lot for your traffic through adwords or have spent $50k on your website, converting 5 visitors for every 200 visits is not bad at all.
BUT, what is more important is to understand a few underlying factors in determining how well your traffic is converting.

Here are a few things to consider checking out when determining your stance on eCommerce conversion:
1. Traffic Sources - In Analytics, browse through each report for your conversion rates:
  • Organic traffic from Google, Bing & Yahoo
  • Referral Traffic
  • Direct traffic
  • Country/region
2. Is your site set up to target only visitors in the United States or an even more targeted geographic area?

3. Search Phrases and Landing Pages
Do you have a lot of traffic entering your site on product pages or category pages? Typically when a searcher is looking for a specific product, searches it, and then arrives on your site via the relevant product page - there is a good chance they will convert better than someone with a more generalized search phrase.

In conclusion, there are many factors to consider when analyzing your site's conversion rate. Too many times webmasters are concerned only with the aesthetics and design elements when addressing poor conversion rates. If your traffic seems relevant and your are still sitting below 1.00-1.50%, then yes - you need to work on a better user experience for your visitors.
My point is, dive a little deeper into analytics before determining whether or not your conversion rates are caused by on-site issues. Without traffic there will be no sales, but without the right traffic you may be barking up the wrong tree when trying to fix those pesky conversion percentages!

To your success,
Jonny Tyson

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