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Though the market has grown rapidly, average online retail conversion rates have fallen.

The fact that, for every $92 spent acquiring customers, just $1 is spent converting them has a lot to do with this. 

This infographic uses stats from our fourth annual Conversion Rate Optimization Report, produced in association with RedEye, and looks at the methods used by websites to increase conversion rates...

Conversion rate optimization infographic

Graham Charlton

Published 18 October, 2012 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

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Ben Goodwin, Email marketing manager at Personal

The simple answer is competition. The $1 spent for every $90 spent stat is misleading. We know websites are more optimised now than 10 years ago, we know people are more inclined to buy online now that 10 years ago, so we have to ask what's made it harder to convert visitors?

The simple answer is that 10 years ago, you had little to no competition, now every man and his dog has a website selling your product and internet shoppers are savvy enough to look at more than 1 website. It will always be the case that the more competitors you have, the harder it is to maintain your conversion rate.

over 3 years ago

Alec Cochrane

Alec Cochrane, Head of Optimisation at Blue Latitude

I partly agree with you Ben - the more competitors you have, the harder it is to convert.

But that shouldn't discourage people from spending more money on conversion optimisation. In fact, if anything, it should encourage you to spend more money on conversion optimisation. Simple things like landing page optimisation are often completely ignored at companies who spend large amounts of money to drive people to their site through PPC, affiliates and, yes, even email.

That said, it is often easier throwing extra money at marketing to get more volume than it is to get better conversion, so I understand why companies do it.

over 3 years ago

Hans Cayley

Hans Cayley, Web Development Team Leader at Westfield Health

Really interesting that the top 3 variables are down to people issues.

That's certainly my experience - businesses struggle to dedicate as much resource as is required to the web.

Still a perception that web should be cheaper & therefore not as heavily resourced as other channels.

over 3 years ago

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Ben Goodwin, Email marketing manager at Personal

Alec,

I completely agree - it does mean websites need to make sure their conversion paths are optimised, and that as competition grows, so does the importance of doing so.

My point was that conversion rates dropping has far less to do with anything else than it does to do with competition.

over 3 years ago

dan barker

dan barker, E-Business Consultant at Dan Barker

It's a boring thing to say, but it's always important to look at other metrics alongside conversion. If 'conversion' is the only number you're interested in, it's usually very easy to increase it by cutting all non-brand PPC spend. That's totally counterproductive for the business, but will almost always have the effect of increasing the topline conversion rate.

Here are 4 other oddities along those lines:

1. CONTENT.

Lots of brands now try to pull more & more visits to 'content' from their visitors. (eg. blogs, update feeds, 'content marketing' stuff, etc). Lots of those visits are not designed to convert.

2. MOBILE.

A silly example from job boards: People often use the 'email this job to a friend' function on job boards to email the jobs to themselves. They then convert on desktop/tablet. 2x visits, only one of which would count as a conversion. That will of course make your mobile site look like it's performing poorly (or converting poorly), when actually it's doing quite well.

3. CHANNEL EXPANSION.

If you're doing phenomenally well with SEO, you will naturally pull in traffic for broad 'research' or other non-converting terms. That helps you in the long run, but suppresses conversion rate.

4. SOCIAL

If a celebrity posts a link to something on your site, you can often get thousands of visits, or even tens of thousands. That's a good thing 99% of the time for awareness, etc... but very few will usually convert. Same is true for hackernews, reddit, etc traffic.

In each of those cases you'd probably do what you can to increase conversion, but they are all positive things that should naturally convert at a much lower rate than someone who comes to your site intent to buy.

dan

over 3 years ago

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Nick Stamoulis

I think Ben makes a good point. More competition means it is that much harder to get noticed by your target audience. And then you have to couple that with the fact that shoppers are smart. They know you aren't the only game in town and they are going to shop around before making a final decision.

over 3 years ago

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Mark Bolitho, New Business Director - Ecommerce at more2Small Business

Morning

What Dan said.

With a huge buzz around content marketing at the mo it's no wonder conversion rates drop in certain instances.

A problem with incentivising someone to focus on conversion per se is that it could lead to politics getting in the way of an understanding of the bigger picture, and how to track and attribute value across the spectrum.

Gotta focus on and measure profitability, not just conversion rate.

over 3 years ago

Stephen Thair

Stephen Thair, Director at Seriti Consulting

.
Speed up your web page load times...

“A 1-second delay in page load time equals 11% fewer page views, a 16% decrease in customer satisfaction, and 7% loss in conversions” -

Aberdeen Group (http://www.aberdeen.com/Aberdeen-Library/5136/RA-performance-web-application.aspx)

"Artificial 1s delay = 2.8% reduction in revenue per user" -

Bing study - http://assets.en.oreilly.com/1/event/29/The%20User%20and%20Business%20Impact%20of%20Server%20Delays%2C%20Additional%20Bytes%2C%20and%20HTTP%20Chunking%20in%20Web%20Search%20Presentation.pptx

over 3 years ago

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Ben Goodwin, Email marketing manager at Personal

I'd also like to point out on the £1 in every £92 stat, that the better optimised your site is, the larger this disparity will be.

Firstly, optimisation isn't costly. It takes time and staffing, but those are often your biggest costs, with software being comparatively cheap. Advertising is not - you need the same staffing levels, more expensive software and then huge amounts can go on PPC.

If my website is converting brilliantly, I can probably afford top-spot on Adwords - this is going to cost me bucket-loads more than before, so the spend on conversion is going to fall in comparison to the spend in advertising. The ratio is entirely incidental.

I agree that some companies need to spend more time looking at optimising their conversion paths, but I think leading with a stat like this is a little strange, as it seems (relatively) meaningless to me.

over 3 years ago

Alec Cochrane

Alec Cochrane, Head of Optimisation at Blue Latitude

Optimisation work can be costly if you want to go to the next level. A/B testing and multivariate testing isn't a cheap option - any sort of decent traffic levels and you are looking at tens of thousands of pounds or more. If anything the more optimised your site is, the more money it will cost. Simple analysis of data to solve big problems in conversion funnels can be cheap and can have large effects.

As I said before, I think companies think it is easier to throw money at a problem to increase the volume, rather than looking at spending money to plug the holes where people drop out.

It's a simple case of maturity in the system - the online marketing model is set up to allow for quick changes and reaction to the outside environment, whereas many companies aren't set up to do that with their own websites. Development cycles tend to be weeks rather than hours, new changes are prioritised in queues behind structural issues and there is a lack of clear connection between spend and result for these teams.

Personally I think this is changing and we'll start to see companies adopting a model where they change their site as they change their marketing and this 1:92 disparity will drop significantly.

over 3 years ago

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java geek

Good point about the competition Ben. Also it's easier to throw money at scientific tactics than the more abstract ones. You pay $xyz and get xyz clicks or xyz eyeballs = its a clear numbers game vs CRO which can be a bit of a hit and miss. It's also less time consuming than undertaking testing of the site. However I think small businesses especially, are waking up to needing to up their cro spend. Once they throw money at something (unlike their big budget pals) they need the phone to ring. If it doesn't they realise that their money is being wasted and so cro is the next step.

over 3 years ago

Stephen Thair

Stephen Thair, Director at Seriti Consulting

Any idea where my comment went?

over 3 years ago

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Sam Ambrose, Multichannel Consultant at Salmon Ltd

The old adage, you can lead a horse to water and all that rings true. I agree with the other comments regarding site optimisation, this is going on and will go on forever, but if you can successfully drive customers to your site, and then do not shout about key points of difference – free delivery, click and collect, price point, secure checkout etc in a very obvious and simple way then it is game over in a matter of seconds.

What often gets lost when agonising over conversion (or lack of it) are sometimes the most obvious things on a website. I usually put myself in the customers mind and have sat though oodles of usability sessions to know that customers generally think along the same lines..make the experience easy, fast, relevant, oh and as cheap as you can please. (Not rocket science).

I have always found that very straight forward usability testing can be so enlightening and can show common trends in a matter of hours. It is totally objective and exposes things that you may think are straight forward on your site (guilty as charged!) It is always amazing to see that basic changes to messaging, button positioning and calls to action can make the world of difference, and give you that edge above your competition.

over 3 years ago

Stephen Thair

Stephen Thair, Director at Seriti Consulting

I've had a lot of success in just sending customers the "WhichTestWon" A/B test emails where you have to vote which version increased conversion.

It has 2 big benefits:

(1) it shows that sometimes small changes can have a 20%+ uplift in conversions and

(2) the real benefit is WHEN THE CUSTOMER GUESSES WRONG... :-)

and then they can see that the their HIPPO opinion isn't always correct, and then they start to see the value of empirical testing.

over 3 years ago

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Hagi Erez

From our experience at Pluralis, we have noticed one truth - you never know what works until you test...test...test.
Also, many times the version that you thought is your winner will convert poorly and the version that you most dislike will be your best converting page.
I'm sure that everyone who is in this field will agree with me on that findings.
In that case, the most effective thing that you should do is to continuously test different ideas, diversified versions originated from many creative minds, until a champion arises.
As long as this process is easy and quick, you will be able to continuously optimize your pages over and over!
Check out the innovative crowdsourcing platform for Conversion Optimization from Pluralis. It is doing for Landing Page Optimization what Henry Ford did to the automobile industry :)

over 3 years ago

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