The Conversion Rate Dilemma: A Series

In the wild world of eCommerce, conversion rate is potentially the most analyzed metric across every industry. Stick with me here as I explain conversion rate in detail. It is the metric that measures the percentage of website visitors who complete a desired action, such as making a purchase, filling out a lead form, or subscribing to a newsletter. And for many eCommerce companies, it's the holy grail of success.

But why do companies tend to hyper-fixate on conversion rate? What is it about this metric that makes it so important? What’s a good conversion rate? In this post, we'll explore what we call “The Conversion Rate Dilemma” here at Roboboogie and why companies tend to use this one metric as a source of truth. We’ll also dive deeper into a few additional metrics that tell a more holistic story of conversion rate.?

Conversion Rates are “Easy” to Measure

One of the primary reasons companies hyper-fixate on conversion rates is because they're easy to measure. Unlike other metrics that may require complex tracking and analysis, conversion rates can be easily calculated using tools like Google Analytics. This means that companies can quickly get a sense of how their website is performing and make adjustments accordingly.

Conversion Rates are Directly Tied to Revenue

Another reason companies care so much about conversion rates is because they're directly tied to revenue. This one speaks for itself, we’ll leave it there.?

Conversion Rates are a Common Benchmark for Success

Frequently, companies will compare their conversion rates to industry averages and their own historical data to see how they're doing. And when they see their conversion rates increasing, it's a sign that they're on the right track. We’ve all been there when the infamous question is asked…how much??

Conversion Rates are a Measure of Website Effectiveness

Conversion rate is also a measure of how effective a company's website is at achieving its goals. By focusing on the conversion rate, companies can identify areas where they need to make improvements.

Conversion Rates are a Source of Competitive Advantage

Finally, companies care about conversion rates because they can provide a competitive advantage. If a company has a higher conversion rate than its competitors, it's more likely to attract and retain customers. And in a world where customers have so many options, every little advantage counts.

Conversion rate makes sense as a source of truth, but it doesn’t always unpack the full picture. We’ve all been in the room where someone says, “Is this a good conversion rate?” My answer is always: it depends. Here are a few places to look to help unpack conversion rate and start understanding the factors that lead to a good conversion rate. Remember, a “good” conversion rate is mainly subjective.

1. Traffic Sources: It's important to understand where your website traffic is coming from because different sources may have different conversion rates. For example, if you're getting a lot of traffic from social media but not seeing a lot of conversions, it may be worth reevaluating your social media strategy or measuring the impact of an increase in global conversion rate.
2. Bounce Rate: Bounce rate measures the percentage of visitors who leave your site after only viewing one page and not engaging. If you have a high bounce rate, it may indicate that visitors are not finding what they're looking for on your site or that your site is difficult to navigate.
3. Average Order Value: Average order value (AOV) measures the average amount of money customers spend per order. If you're seeing a low conversion rate but a high AOV, it may indicate that customers are interested in your products but are hesitant to make a purchase for some other reason, such as high costs.
4. Cart Abandonment Rate: Cart abandonment rate measures the percentage of visitors who add items to their cart but don't complete the purchase. If you have a high cart abandonment rate, it may indicate that there are issues with your checkout process, such as a complicated form or confusing site hierarchy.
5. Time on Site: If you have a low conversion rate and a low time on site, it may indicate that visitors are leaving your site quickly because they're not finding what they're looking for. Always take a look at converting customers and their average time on site to better understand this trend.?

Tracking these additional metrics allows for a deeper understanding of your conversion rate and identifies areas for improvement. It's important to remember that improving your conversion rate is a continuous process and requires ongoing optimization and testing.

At Roboboogie, we’re experts at helping companies optimize their digital experience and drive positive business results. Let us help you elevate your business to the next level. Contact us at [email protected].