Quick Conversion Statistics

Conversion rates, or the percentage of consumers that actually make a purchase, varies from one website to another.  A recent study by Intermarket Online states that the average online consumer conversion rate is 2.7%, and that 62% of merchants have a conversion rate of 2% or less, while 5% have in excess of a 6% conversion rate. A Forrester Research study of 41 online merchants found that conversion rates typically vary from 1% to 4%, with under 2% for 70% of merchants. Amazon and CDNow get 6% to 8% rates.

Online Purchase Decisions

It is true that website traffic is essential, but getting potential customers to your site is just the first part of a complex behavioral process. Traffic without business goals or a defined web strategy to support those goals usually turns out to be… well, just ordinary traffic. When consumers shop online, they go through a three stage buying process: want, need, and validation. If you’re not sure that this decision making process is convincing, think carefully about the last time you purchased a high priced item from the Internet. As rational beings (for the most part), we are reluctant to admit that our ‘need’ starts with a ‘want’ and ends with a ‘validation’. We like to think we just buy that which best suits our needs at the best possible price – yeah right; try telling that to my wife.

WANT

FACT: The majority of visitors on your website will never purchase your product or service. Don’t fret; it happens to all of us. That’s why only 6 out of every 100 visitors actually purchase something on Amazon.com (see above stats). The other 94 visitors are just browsing. Nonetheless, it can’t hurt to reinforce the ‘want’ factor; and at the same time seize the attention of those who are just browsing and begin the relationship building process.

Convincing a customer to want your product can be easily done by using a stylish image of your product. The image can show the product being used by a celebrity, as T-Mobile did with the lovely Catherine Zeta-Jones.  Or, you can use attractive models to showcase our products like Calvin Klein.  Having a person in the creative helps the consumer relate to the situation by identifying with the person using the product. On the other hand, especially where you’re selling into a niche market, a really nice product shot may be compelling enough. Lexus does a great job of this.

A minimal amount of copy accompanying the picture is usually suitable. The message should focus on the benefits of the product; not the features. Remember the old marketing cliché learned in undergrad, “features tell, but benefits sell”.

The basic reasons for wanting something can often be stated in very brief phrases: look sexy (Calvin Klein), be creative (HP Printers), be a hero (Ford Trucks), more productive (IBM), feel safe (Volvo), etc. Longer statements are usually addressing the ‘need’ not the ‘want’, which brings me to my next point.

NEED

Now that you have stirred up the ‘want’ emotion, it’s time to create the need. Using ‘create’ may seem strange or perhaps unethical, but this is exactly what superior online promotion must do. It’s equivalent to “creating” demand for a product or service.  As Seth Godin states in his book and blog, All Marketers Are Liars, “good marketing tells a story and reinforces the lies that consumers tell themselves everyday” (i.e. I look really sexy in these Abercrombie jeans. They make me look so sexy; much more than GAP jeans do).  Even if your product is as ordinary as a roll of tissue paper, it’s important to position the product in your customer’s mind; so when they think of wiping or blowing, they think of you. In the case of tissue paper, they aren’t just for blowing your nose anymore; now they have lotion to make your skin soft.

Marketers are very creative when positioning their product in the mind of the consumer. For example, Nike has created the position that if you wear their running shoes, you can run a little faster or perhaps jump a little higher than your competitors. Whether or not it’s true doesn’t really matter. They are simply reinforcing the lies that consumers tell themselves everyday.  They own and exploit that position on their website, in their ads and just about other communication method they use; and that’s what makes them market leaders.

The more benefits you can demonstrate for a product, the more compelling will be the customer’s ‘need’ for the product. Once a need is established, your website presentation can move to stage three, validating the purchase decision.

VALIDATION

Validation is a process of rationalizing a purchase in order to alleviate buyer’s remorse. We all do it. Online Marketers must provide specific information that will help the visitor develop this rationale in order to convert them into a customer.  This requires a strong presentation of the hard facts about the product all throughout out the shopping cart checkout experience. The hard facts are specific product attributes, comprising specifications, price; or anything that differentiates you from your competitors such as 24/7 Customer Support, 30-Day Money Back Guarantee, etc. Customer testimonials are also effective.

Sales promotions are great for rationalizing. I hear it all the time from my wife, “honey, look at my shoes that I bought on sale for only $30!” as though this in itself was a good reason for making the purchase in the first place.

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Trust and credibility are also factors to consider. When a consumer searches for a branded term, and other search results are returned (perhaps retailers or affiliates), a customer can loose trust in that brand; and the company image loses credibility.

In my opinion, brand related terms are the most valuable terms in any search campaign. They are the most likely to attract the highest levels of relevant traffic because consumers are already interested in the company’s value proposition.  The result is higher conversion rates and a more positive customer experience.

Okay, I know this is old news but I am blown away at how many high profile companies are still not doing this!!! Case in point – I just searched for the term “Epson printer” and Epson is number one in the natural but nowhere to be found in the paid.  On the other hand, I did a search for “hp printer” and HP owned the first 5 natural listings and had three paid search listings as well. It’s no wonder why HP is the market leader in the printing category.

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The following points are discussed in my article, Practical Tips for Converting Visitors into Customers:

1. Persuasive Copy Writing
2. Know Your Metrics
3. Improve Your Navigation
4. Call To Action
5. Reduce Download Speed
6. Substance Over Style
7. Recapture Lost Sales
8. Content

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