With every online merchant, you are constantly looking at how to improve your conversion rates. Conversion rates are the percentage of visitors that follow through and make a purchase. The average ecommerce website typically has a conversion rate of less than 2%. If you use Google Adwords instead of organic search then expect an even smaller percentage of your visitors to buy. You need to keep that number in mind when you estimate the revenue that your website can generate.
You can also do the math to realize that if you could move the needle to a consistent 3% what that would do to your revenue stream. Many online stores are always looking at how they get more traffic though are not spending the same energy on how they can retain more customers and increase their conversion percentage. There is one fool proof way to increase conversion percentage and that is to lower prices or have a sale. I would warn you though as this may give you the instant satisfaction of increased conversions in the short term; it could hurt more than you know in the long term.
When you use price to drive customers than having the lowest price will always have to be your priority. What happens when the website next to you lowers their price? Are you going to match him/ her and get into a price war. No one wins in a price war. You could say the customer does though price wars run companies out of business, reduce service, and when companies go out of business less competition means higher prices than before.
As tempting as it is to generate instant revenue by dropping your prices I would recommend taking a pause and rethinking your brand position and marketing strategy. First, think about companies that you like. Do you typically go to them to purchase their genre of items without price shopping? The answer is you probably have a few companies that you like for different reason that far exceed price. Understanding what makes these companies different is a step in how you can differentiate yourself from the competition.
There are more than one way to increase conversion rates. Take time on your site to see if the information is easy to follow on your website, are you offering videos and photos to support product info, and increase specific content that supports a person’s buying decision.
There are many ways to boost your conversion rates. For example, you could spend your time optimizing the usability of your site, personalizing its content to users using segmentation strategies, or make long-term investments in branding. These are marketing strategies that complement and enhance your existing business strategy.
One essential strategy you need to implore is the use of analytics on your website. Google Analytics is a free service and I have yet to see a paid service deliver more. With Google Analytics you can create funnels which shows your checkout process. On one particular client’s website we found that people were leaving their site during a questionnaire form in their process of signing up for a membership. We were only able to see this with the use of Google Analytics funnel tracking. We then moved the questionnaire to after people had officially paid for their membership and conversions increased by 300%. You would be amazed at how simple things in your checkout process could be root of your trouble with conversions.