Finally, a video post here, where I explain some very basic pointers on why not to focus on conversion rate.
Yes, you heard that right. And I’m saying this knowing that a 0.01% increase in this metric can help you gain an extra million dollars or much more.
The main reason for this video is that I’ve had multiple E-commerce clients and potential clients of mine come to me with a Conversion rate obsessions and for CRO work (Conversion rate optimization) – now we don’t exactly help in CRO, but we definitely help in understanding your customers and your marketing process deeply via our Marketing and Customer analytics offerings, which eventually improves bottom line and has a long-term picture in mind.
Let me explain by a simple example also below…
Imagine you are on a popular shopping street where you’ve gone for a meal or a walk and the shops there are forcing you to come in and make a purchase at that very moment and they are constantly working on optimizing this process without any regard of what YOU Truly want
That’s exactly what you do when you optimize your website for Conversions all the time.
I’m not saying Don’t optimize, I’m talking about Over – Optimization and Obsession with Conversion Rates.
Always Add Value first and offer something that they can use for free.
Another example is that of some popular shops where they add value is they give you free miniature tasting boxes or Starbucks would offer Free small shots of coffee or chocolate or something to people that are outside – most would just take it and walk away.
But, some are really blown away and now are ready to buy coffee or anything else that the shop offers.
I would always personally go with the second approach as it’s more long term and you add value to everyone!
So – the short answer is to check your overall strategy and add value to 100% of your visitors and not just the 2–10% who are going to buy from you.
To improve conversions, I’d find other metrics or KPIs related to business goals, that can be improved, which in turn would lead to an improvement in conversion rate.
Lastly, Adding a quick summary and some top pointers from the video and on this topic that you should be fully aware on
- The conversion rate is not an actionable metric. That’s just enough to put decision makers off in most cases! Insights as always are pointless without an action.
- At any point in time, 95% of visitors are not going to buy. So, while optimizing for conversion steps, you are actually optimizing your website for that 20-40% that’s in the zone and ready to buy and of which, 1-5% of your visitors only will eventually end up buying.
- Two more actionable metrics to look at to improve conversions are – Cart abandonment rate and Checkout abandonment rates. Improving these two metrics (reducing them) will lead to a direct increase in your conversion rate by smoothening out the conversion process from the end.
- As Himanshu the expert puts it, “Conversion rate has got data collection, data interpretation, data reporting and statistical significance issues”
- The two metrics to understand bottom line and revenue numbers would be Average order Value and number of transactions.
Below are two solid resources you must read to learn more about this issue and go deep on the points mentioned above
- Stop obsession about Conversion Rate by Avinash Kaushik
- Two powerful reasons you should stop doing CRO
Feel free to drop in any questions you have in the comments.