Framework for Ecommerce Conversion Rate Optimization

Conversion rate is one of the north-star metrics for all Ecommerce businesses. But how to optimise ecommerce conversion rate for your business? This article provides you with the step-by-step framework to propel your conversion rate to new heights.

What is Ecommerce conversion?

Shopify defines ecommerce conversion rate as "dividing the total number of orders placed by the total number of unique visits to your website. For example, if you have 100 visits to your website and two people purchase the product, your conversion rate would be 2%.

Why should you care about Ecommerce conversion?

Essentially, conversion rate gives you an estimate of how your website performs. If you can improve the website's performance, you can make more revenue with the same amount of traffic.

In our earlier example, if the conversion rate increases from 2% to 3%, you'll get an additional 1 purchasing user per 100 customers without increasing the number of customers.

Your ecommerce revenue is dependent on three key numbers:

1. Traffic: The number of people visiting your website. You can get this number from various analytics tools including Google Analytics, Mixpanel, etc.

2. Average Order Value (AOV): Average Order Value number is defined as your total sales revenue divided by the number of orders. This metric indicates the investment made by a customer to buy your service.

3. Conversion Rate (CVR): As discussed above - a measure of your website's performance through people purchasing a product over total visitors.

Ecommerce revenue can be increased by increasing any of the above metrics.

However....

Increase in traffic can be made through organic, direct, or paid. Although it's possible to gain traffic share, it'll be dependent on competitors.

For example, paid search ads are influenced by the bidding price of competitors i.e. if someone bids more on the keyword you're targeting, the traffic will be routed to that competitor.

Similarly, AOV is dependent on your promotions and pricing policy - so we would not recommend lowering the prices just to improve conversion.

Only the conversion rate is in your control.

As it is platform dependent and as a business owner, you know what ticks with your niche and then can optimise your platform accordingly through ecommerce conversion rate optimisation.

In all, if you can optimise your conversion rate, you will be able to sustainably grow your business.

Framework for Ecommerce conversion rate optimization

With our Ecommerce Accelerator Program, we follow the 5 step process to help our customers achieve a GUARANTEED higher conversion rate.

1. Funnel Drop-off

The first step in any ecommerce conversion rate optimisation is to analyse where the majority of the users are dropping off in your funnel.

Let us look at a typical ecommerce funnel. You can create the funnel using analytics tools including Google Analytics, Mixpanel, etc.

From this chart, you can see most of the drop-off occurs from Product to the Basket page; indicating that if Add-to-Cart conversion is improved - we can expect a big chunk of conversion increase.

Once you've identified which steps need improvement, we can go to the next integrated step.

2. Target Elements

For each page, there are several elements that have the maximum impact on conversion. We've compiled a few of these here (some derived from Baymard's research).

P.S. Keep an eye for our Target Elements guide soon.

3. Personalised Promotions

Personalised promotions aka a unique promotion for your customers based on their past activity and purchase patterns. These have been studied to great length and have shown to increase revenue by over 25%.

The concept behind this area is: If someone is buying once a month, what can we do to make them buy twice or thrice?

By offering personalised promotions, you can make sure you offer discounts to valued customers and not to the entire user base, ensuring enhanced loyalty and retention.

4. Content Integration

Content, if used correctly, can have a massive impact on ecommerce conversion rate optimisation. Content can be used to boost your SEO presence and educate your clients towards your transactional journeys.

Usually, users searching for content have some transactional intent as well. To cater to such users, linking the journeys is important.

Further, you can use the content in the email journey when designing for end-to-end optimisation,.

5. End-to-End Optimisation

Probably the most important step in ecommerce conversion rate optimisation which is neglected by 99% of CRO agencies. However, CRO Fuzion has a dedicated section to support you in this.

End-to-end optimisation refers to developing customer journeys from all traffic source perspectives to ensure consistent messaging and landing journeys.

For example, if someone is landing through paid search ads, the intent is primarily transactional therefore, specific messaging around promotions would help the conversion. There will be other elements for each journey that we can work you can on with us.

That's it..

These five steps can boost your conversion rate to the moon. At CRO Fuzion, we have an ecommerce accelerator program where we offer a completely done for you, pay on results model to boost your conversion rate by a minimum of 10%.