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Measuring Your Conversion Rate

In the very beginning of these lessons, we talked a little bit about what conversion rate is and why you should be focused on improving it. Now we want to dive a little bit deeper as you think about optimizing for ecommerce.

The simplest way to think about conversion rate is this: Your conversion rate is the number of visitors that come to your site that actually take an action you want them to take, whether that is signing up for your email list, filling out a form, or making a purchase from your site. If you have more than one of those are goals for your website, track them individually as well as on the whole. 

  1. Subscriber conversion: Unique visitors / # of new subscribers

  2. Shopper conversion: Unique visitors / # of new customers

  3. Total site conversion: Unique visitors / # of people with any conversion*

To be successful, each of those rates is important to the success of your business. That means you should be putting strategies in place to improve each of those numbers individually through A/B testing or sequential testing. And as you get better and better, you can add metrics like the rate of subscribers who become customers, repeat visitor conversion rate, and more.

Note: If you are calculating a total conversion rate, don't add the totals of customers and subscribers. You should be looking at the number of people who have done one or both of those things, but be careful not to double count.

What is a good conversion rate?

There is good news and the bad news in answering this question. First, the bad news. Industry data shows that an acceptable conversion rate is between 1 and 3%. That means that the vast majority of people hitting any website leave without taking any meaningful action. It’s a little sad, but also provides great context. If you’re expecting a 50% conversion rate, you’ll need to reset your expectations, but it’s not unheard of to make significant leaps and bounds by investing in conversion-focused strategies. In fact, we see it all the time.

One example of this is a company called Project Repat. Their business is pretty cool. You ship them all of those old t-shirts that don’t fit but you refuse to throw out, and they turn them into a cozy, blanket full of nostalgia.

After being in business for a while, they realized that their service was difficult to sell in one site visit. But they were paying an arm and leg to drive traffic so they built some educational nurturing emails and decided to make their primary first visit goal an email capture. When they shifted that focus, and targeted each referral channel with relevant messaging, they started turning 12% of traffic into subscribers.

They didn’t stop there. When the nurturing emails drove subscribers back for purchase, they added some additional overlays based on how much value was in a visitor’s shopping cart and were able to reduce the number of carts that would normally abandon by 10%.

That's the type of conversion rate improvement that's possible when you start systematically testing your way to success. In the next chapter, we get into some testing basics you can start using right away.


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