Quick intro into Conversion Rate Optimization for your eCommerce

By: Andra Baragan

When managing an online store you’re always looking for ways to get more sales and more value out of each customer. The first response of probably 3/4 of ecommerce websites is to get more traffic to the site. That is one way, of course, but what if you’re wasting almost 70% of that traffic with irrelevant landing pages, bad user experience, ruptured funnels, insufficient product information and so on then wouldn’t that be a terrible shame?

You might say your conversion rate is 4% or 9% or 15%, which is more than most eCommerce businesses out there but the truth is you should always strive to improve the conversion rate you have now and not focus that much on benchmarks and industry statistics. You can always do better than you’re doing now.\

Maybe you’re running advertising campaigns on your own to your online store and they just don’t seem to be performing as you expected them to? Or maybe you’re working with a nice PPC agency that does deliver results but they keep asking for more money towards their ad spend? In order to scale your ecommerce business at the most efficient and cost-effective rate, you need to make sure your website is delivering the very best user experience.

Not sure exactly where to start and what to look for? In this article I will guide your through a small part of my process of eCommerce conversion rate optimization and share with you some of my experience from working on dozens of websites.

You must start with defining your business objectives and KPIs (key performance indicators

Think about your business objectives for the next 3–6 months. Are they to get more new customers? To increase your return customers rate? To scale your email marketing? This is specific to the point your business is at and will help you plan your optimization efforts accordingly.

When it comes to key performance indicators, for eCommerce, I generally focus on the following:

— Ecommerce conversion rate (formula: Number of Transactions/Number of Users)

It is important that we mention Users here and not sessions, as Google Analytics calculates it, for example, as sessions are not necessarily a good definition of an individual and his shopping behavior. When we say users in Google Analytics we are referring to a cookie attributed to a browser. This means if you visit the site 4 times from your Chrome on your computer and purchase once, you will show as 1 user but 4 sessions. So what happens is you treat the same individual as 4 different individuals which will skew your understanding of users’ behavior and how you should act on it.

Another thing to keep an eye out for is your eCommerce conversion rate per device, as well as the amount of traffic you’re getting on each device. Many times I’ve seen site owners focusing on their desktop version of the site when, in reality, they were getting about 70% of traffic on mobile and mobile was converting terribly due to an unoptimized mobile experience.

How do you find out your conversion rate for each device? In Google Analytics, simply select Audience → Mobile → Overview and there you have it. Make sure you select “eCommerce” in the goals section to see your eCommerce conversion rate.

Another way to look at your metrics across the board for each device category? Add the segments from the segments library and then you can go through each report and see how they compare.

After that, select “mobile traffic”, “desktop traffic”, “tablet traffic”, click Apply and you will have your three segments applied to your reports. You will see something like this, in our audience overview, for example:

You should do this for browsers as well and check that you don’t have any outliers in terms of conversion rate across browsers. You might find out your checkout is totally incompatible with Internet Explorer 10. You don’t know until you check.

— Average Order Value (formula: total revenue/number of transactions)

Why is the Average Order Value important? First of all, it shows you how high you can go with your Cost of Client Acquisition. In any advertising efforts you are running, you will have a cost per conversion or cost per action. If your average order value is $50 then you know you will be able to spend maybe $25 per each new client. This depends entirely on your COGS (cost of goods sold), overhead, profit margin, etc. This value is also greatly influenced by your returning customers rate — I used to run campaigns that would barely break even on the initial sale as I knew those users would return and purchase for double or triple amounts. The KPI that would tackle this is Customer Lifetime Value but this is a subject in itself which I will address in another article. In the meantime, if you want to learn about this, I think this infographic is the best way to understand it without being really confused.

You can see your Average Order Value in the eCommerce section of your Analytics (make sure you have eCommerce enabled for your analytics views). If you don’t or for some reason don’t want to use that, simply calculate it from your sales reports. Some eCommerce platforms also do that for you in your dashboard, such as Shopify. However, you shouldn’t take the Analytics eCommerce numbers as something to file your taxes from, there will almost always be discrepancies between the exact numbers you have in your sales reports and the numbers you have in your analytics. Anywhere under 10% could be acceptable, anything over shows you have something wrong in your tracking.

— Shopping Cart Abandonment Rate (formula: number of adds to cart/number of finalized purchases)

Shopping cart abandonment rate matters and we’re looking at it separate from the eCommerce conversion rate as it’s a good indication of our shopping cart performance and how much users trust the products, website, brand and so on. The eCommerce conversion rate shows us the rate at which all users that land on the site convert and the shopping cart abandonment rate shows us the rate at which users that have shown an actual interest in the products convert.

Your products might be very appealing to your users until they reach the checkout and find out they need to pay a shipping fee that’s almost as much as the product they’re ordering. Or they see you don’t accept PayPal or Visa or your payment process is not properly encrypted and they don’t feel safe in handing out their personal details. The reasons here can be many and that’s why we need to look at each step in the buying journey and optimize accordingly.

If you have enhanced eCommerce installed (properly!) you will be able to see a sweet report that will show you drop-offs at each point in the buyer journey and separately in the checkout process. Again, if you have a Shopify store or use another platform that has an enhanced ecommerce plugin, then you should be able to install it with less effort but I strongly recommend using a developer for this. You do it once and it’s a bit of a pain but it’s definitely worth it in the long run.

Read More at: https://medium.com/swlh/quick-intro-into-conversion-rate-optimization-for-your-ecommerce-c7f18070ed88