Average conversion of online stores. What is conversion in sales? Definition, formula and calculation example. Marketing strategy

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Site conversion is the ratio of people who visited the site to those who performed the target action on it, that is, what brings or could potentially bring benefits to the site owner: calling, filling out a feedback form, placing an order.

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Let's assume that the target action for your website is purchasing a product. During the day, your product was purchased 5 times. The site visitor counter says that 3,628 people visited your resource during these 24 hours. Divide 5 by 3628 and multiply the result by 100 to express the result as a percentage. In this example, the conversion will be approximately 0.14%.

The effectiveness of the site is assessed over a long period: week, month, year.

For those who like automation or don’t like dividing by columns, there are special free resources that calculate conversion. This is, for example, Google Analytics or Yandex.Metrica. These tools are free and yet functional.

To correctly evaluate conversion, set up analysis tools and select a landing page. This is the page that the buyer goes to after placing an order, for example the inscription “Thank you for using our store!” Sometimes it is not views that are tracked, but other events: clicking on a link, downloading a file, watching a video, etc.

If you specify target events incorrectly, you will get an incorrect conversion value, which, in turn, can push you to erroneous conclusions.

Good website conversion

Each industry has different indicators. For example, here are some statistics:

• VKontakte group: 20% - 30%.
• Online store: 2% - 5%.
• Tourism: 4% - 7%.
• PO: 7% - 9% .

In November 2016, the research agency Data Insight published data regarding conversion rates for various product categories. The agency claims that the top Russian conversion goods look like this:

1. Food delivery - 14.9%.
2. Sales of tickets for various events - 7.8%.
3. Bookstores - 3.6%.
4. Intimate goods - 3.4%.
5. Cosmetics - 3.2%.
6. Medicine - 3%.
7. Tires - 2.9%.
8. Products for children - 2.8%.

These are averages and are not suitable for all cases. It is impossible to clearly answer the question whether a given site has a good conversion rate or not. Let's look at two examples:

• 100 visitors per day, conversion 5%;
• 5000 visitors per day, conversion 1%.

From them we see that the second resource is preferable, because from it we get 50 sales per day, and from the first - 5, despite the fact that its conversion is lower. It turns out that a good conversion is one that pays for all intermediate costs.

Conversion Analysis

Website conversion is a relative value, the usefulness of which consists of the following factors:

• Income received from one customer.
• Cost of attracting one buyer.
• Total number of buyers.
• Revenue per customer

Let's give an example of two different sites. The table below shows that the second one brings in twice as much income, and its conversion is 7 times less.

Cost per visitor

Income per site visitor is an important, but not the main indicator by which the success of a site is assessed. The result indicator is return on investment (Return On Investment). This is the final profit, that is, the difference between income and costs.

Users don’t come out of nowhere; you also spend money to attract them through advertising. Having invested 100 rubles in attracting customers and earning the same 100 rubles, we get an ROI value of 100%. All investments paid off, but no net income was received. ROI calculation formula:

Let's return to our example.

From it it becomes clear that the second site brings in more income, but the profit from it is several times less, because more money is spent on advertising.
As a result, the first site earns 31.3 rubles per customer, and the second only 10 rubles.

Number of visitors

A large number of visitors does not always mean high conversion rates.

Let's say you sell a certain brand of paint. To attract visitors you need advertising that can be tailored to potential clients. Your target audience is:

• Those who want to buy paint.
• Those who want to buy paint from a certain manufacturer.

Increase conversion

There is also such a thing as microconversion - steps taken by the user before taking the main action. For online stores, where the main action is the purchase of a product, intermediate steps are registration, adding a product to the cart, calling back, etc. For example, there are situations when a buyer added an item to the cart, but did not place an order because the checkout process was too complex and confusing. In this case, intermediate indicators allow you to understand what needs to be corrected on the site itself in order for the user to make a purchase.

There are a number of methods to increase conversion:

Replace a multi-page website with a landing page

Landing is a site without unnecessary information. It is necessary to remove from the page everything that distracts the user from completing the target action. More often than not, it's better because the buyer can concentrate only on buying the product without being distracted by anything else.

Offer a promotion

A common situation for online stores is that the user knows that he needs this product, but puts off the purchase until later and delays making a decision. In this case, you can push the buyer to action by making it clear that buying here and now is more profitable. It could be anything, for example:

• unique delivery conditions that no one else offers;
  discount;
• gift with purchase.

Here are some small tips for improving your landing page:

• Buyers value the uniqueness of a promotion more highly. Sometimes companies simply offer free services that cost their competitors money. For example, for lawyers it is a free consultation, for software manufacturers it is a trial version. All this is banal and will not attract the visitor.
• Use remarketing. Remarketing is a tool that returns visitors to a site if they have visited it before. Remarketing will help remind these people of yourself and convey a relevant message to them on any resource: social networks, YouTube, email, etc.

Post a call to action

Push a potential client to take a targeted action. Internet users often have distracted attention and find it easier to follow specific instructions. For example: “Click this button to buy the product,” or “Call us for details right now.”

Place the most important elements on the first window of the site

On it should be placed:

• information about products;
• promotions and offers;

Because most users will not understand the site structure and will leave the site.

These are not universal or the only methods for increasing conversions. To increase it, you need to know your target audience: gender, age, etc. and run advertising in a way that reaches more customers. There is no need to complicate the design of the site. Microconversion helps to find the weak points of the site and improve them.

Analysis of conversion and methods for improving it will help improve the weaknesses of the resource and successfully promote it.

From time to time, on the Internet and in RuNet you can see ratings of the most converting online stores. We also published. The material was popular. The report on another study, “”, took a place in the top of the most read materials for a long time. Obviously, entrepreneurs of all stripes and levels want to know who is achieving the greatest success in the market, whose conversion exceeds all reasonable limits. The desire is natural: knowing the leaders, you can adopt their experience, spy on techniques, methods and tactics, focus on them and strive to get into their league. But is website conversion the most important metric for success? The answer to this question may be negative. Explanations are in this material.

What is “site conversion”?

Conversion is the ratio of sales to visits, the percentage of visits that resulted in placing an order or other similar action. If there are 5 orders per 100 visits, the conversion rate is 5%. It would seem that the higher the conversion, the better. But...

1. High conversion ≠ high website efficiency

The easiest way to demonstrate the truth of this statement is with an example:

1. 5000 visits, 200 sales - conversion 4%

2. 1000 visits, 100 sales - conversion 10%.

In the second case, the conversion is more than twice as high as in the first. However, the traffic in the first case is five times higher than the second result, and all other things being equal, the first case can be considered more effective from the point of view of the site’s operation, because expanding the audience is also an important task for a selling site.

2. Not all visitors are potential buyers.

By focusing on conversion, we treat every visitor as a potential buyer. In the case of a contextual campaign that brings people to a specially created page, this approach is justified. However, when looking at the site as a whole, it’s unlikely to see conversion potential in every visit. Consumers may come to your site looking for a photo of a product from a related search, or to send a friend a link to a particular product, or simply to check the status of their order.

3. Info content reduces conversions

If content marketing is just a word to you, and you don't work to attract and retain your audience with interesting, educational content, your store conversion may be quite high. Apart from viewing the assortment and placing an order, there is not much to do on your website. Loyal customers visit you once a month, every second visit is converted into a sale. But once you start a blog or something like that, the traffic increases and the conversion stays the same. Is it good or bad? If you are looking to grow your online store to a noticeable size, increasing traffic is definitely a good development. Don't know what to fill your blog with? Check out the material "".

4. Different clients - different conversions

Obviously, a new visitor who lands on your online store for the first time is unlikely to immediately rush to place an order. At the same time, an “old”, already established customer, attracted by your newsletter, is able to buy a product in your online store immediately, after viewing one or two pages. Is it worthwhile to generalize such different types of visitors and display a conversion rate that is common to all?

Website Conversion: Making Meaningful Uses

So, conversion is not the best indicator of the success of a site, and conversion conversion is different. Too many factors influence this indicator to accept it as the main metric reflecting business performance. However, conversion is an important element of the overall picture, but it must be entered into this picture wisely.

Never consider conversion out of context

An increase in conversion can be caused by a noticeable decrease in site traffic, which also entails a decrease in the volume of orders. High conversion does not necessarily mean good sales.

Always look for reasons to increase conversions. Its growth should not make you happy, but raise the question “why?”

Focus on conversion when solving specific problems

Are you launching a contextual campaign and creating a separate landing page for it? Conversion is a good indicator of the effectiveness of that page.

Are you creating another one? Focus on conversion by placing calls to action.

Conversion depends on the customer acquisition channel

From channel to channel, conversion as a ratio of sales to visits will vary, and this is normal.

Consider traffic from the point of view of individual acquisition channels, and work to increase conversion not in general, but with each specific channel.

Conversion depends on the type of visitors

As noted above, the likelihood of a returnee converting is much higher than the likelihood of attracting a new visitor to the ranks of buyers. Consider your conversion rates accordingly.

Small changes (site, policy) always have a greater impact on new visitors than on old ones.

Conversion is not just about orders

If you practice content marketing in one form or another, every user who subscribes to a newsletter or channel is a conversion. Different tasks mean different desired goals, but the visitor’s achievement of these goals is still a conversion.

The meaning of the word “conversion” depends on the scope of its application. In Internet marketing, this is the ratio between all website visitors and those who performed the target action: indicated an e-mail, registered for a webinar, etc. In online advertising, conversion is the ratio of banner impressions to link clicks. And in traditional sales, the conversion rate is the ratio between the number of all customers who showed interest in your product and those of them who made a purchase.

According to experts, all promotion work in the company is aimed precisely at increasing this indicator.

Counting on our fingers: calculating sales conversion

Most often this indicator is measured as a percentage, however, simple fractions can also be used. Let's try to calculate the sales conversion rate, the formula is very simple:

(Actual clients/Potential clients)*100%

Let's consider: for example, this month you closed 2000 transactions, and only 2 of them were won. This means the conversion is 0.1%:

(2/2000) * 100% = 0,1%

If we assume that the company from our example worked on its mistakes and was able to convert not 2, but 200 potential buyers out of 2,000, to sales, then the conversion will increase to 10%:

(200/2000) * 100% = 10%

Please note that when calculating conversion, only closed trades (won and lost) need to be taken into account, since open trades may still sell in the future.

Thus, we calculated overall conversion rate. If your cycle of working with a client includes several stages, forming a sales funnel, then you can calculate the conversion for each stage.

Similarly, you can calculate the conversion separately:

• for each manager - we identify who sells well and who needs additional training or a motivating kick;
• for each sales channel - for example, an online store brings in such and such a percentage of customers, and a physical one - so much;
• for each product or service - some sell better and some sell worse with a similar base of potential customers;
• for each location - somewhere your services are in greater demand, somewhere less.

Why do we need to know this: applying conversion in practice

As you understand, there is a conversion at every step of the sales funnel, and if you count them all, you will get a huge set of numbers. What to do about it now?

1. “Cure” the weak points of the sales process

By understanding how to calculate sales conversion and knowing its exact indicators, you can find and correct errors in the company's work. Have you discovered that a manager loses most of his clients at the cold calling stage? - and things will go better. Have you found that buyers respond well to cold calls, but fall off during the presentation stage? This means that the presentation needs to be improved.

For example, like this:

We measure the effectiveness of innovations

Knowing the starting point makes it easier to assess the effectiveness of any changes. Have you made adjustments to your sales funnel? Have you changed the layout of the site? Did you give managers new scripts? This will immediately affect the conversion: if the indicators have increased, you are on the right track.

Dave Garr, co-founder of UserTesting, as part of a survey by the analytical platform Kissmetrics:
- We increased the speed of our website - and conversion increased by 73%!

Blake Williams, co-founder of Keepsy, as part of a survey by the analytical platform Kissmetrics:
- So far, nothing has increased our conversion more than the fact that we “stuck” two large green buttons with a call to action in the middle of the site.

We forecast costs

Let's say you sell 5 units of product a week, but you want to sell 25. Having tracked the conversion, you realize that to sell 5 units you had to call 50 customers. This means that to sell 25 you need to make 250 cold calls. Now you know exactly what task to set for managers in order to achieve the desired result and you can calculate how many resources this will require: in this case, 5 managers with a plan of 50 calls.

It can be even simpler: we use a CRM system

A CRM system will help simplify your work with conversion. To be honest, you may not even know how to calculate sales conversion: the smart program itself analyzes the data online and displays visual reports. For example, to analyze the sales funnel, a special diagram is used: it indicates how many transactions are at each stage of work and what their amount is.

Moreover, the CRM system allows you to detail the funnel data. For example, display in it transactions not of the entire sales department, but of an individual manager. Or indicate only those transactions whose clients came from a specific source. This way you can compare the performance of different employees, look for more effective advertising channels, and much more.

You do not need to personally collect and analyze information - the CRM system will do it for you. It also contains all the necessary tools to quickly take action. Right now you can evaluate the ease of working in CRM, in the program.

Kirill Gurbanov wrote a column for VC about how a manager can determine priority areas of work in a startup. To do this, the author recommends creating a “weight distribution table.”

Every manager who manages a company or part of it is faced with the task of determining priorities on a daily basis - what is more important for the business to do right now, and what can be postponed?

At iPictory, we act quite pragmatically in this regard: for each task, the degree of its impact on the company’s earnings is determined. There is nothing complicated about this - it is enough to identify the key points of growth of your economy once, and then you will automatically begin to pass through their prism any of your tasks and problems.

Disclaimer: This material does not claim to be the ultimate truth. I’m just sharing the approach that we in iPictory, WashApp and other projects managed to develop during their existence. I will be glad to see your comments, clarifications and additions.

How to determine what and to what extent affects the earnings of your business

It is known that the fate of any commercial Internet project is subject to the ratio of CAC and LTV (someday I will write a separate material about the product economy and put a link to it here, but for now...)

Brief information:

• CAC- Customer Acquisition Cost - the cost of attracting a paying customer, that is, how much you pay on average for a new user to make a purchase from you.
• LTV- Lifetime Value - customer value, that is, how much money on average your customer brings you during his lifetime with your service or product.

If CAC > LTV, then by definition the business will not be able to survive, since it will spend more on marketing than it earns. If C.A.C.< LTV, значит шансы у бизнеса есть, но тут очень важно, какая разница между этими двумя показателями, так как именно из нее вам нужно платить зарплаты и прочие OPEX-ы (OPEX - Operational Expenses - операционные расходы).

So, your final profit is affected by CAC and LTV:

Now, for clarity, let's divide CAC and LTV, each into two components:

• CAC = CPA/c1;
• LTV = AOV * APC.

CPA- cost per acquisition - the cost of attracting a user (as a rule, this is CPC - cost per click, or CPI - cost per install - price per installation (for mobile applications)).

c1- conversion to the first order, that is, the average ratio of those who bought to those who came or installed.

AOV- Average Order Value - average bill, that is, how much on average you earn per order.

APC- Average Payment Count - the average number of purchases per customer, that is, how many people on average make orders in their lifetime.

We get the following picture:

Now we have four key indicators that directly affect the success of your business. Any metric can be expressed directly or indirectly using these four metrics.

As you probably already guessed, you and I will compare our future tasks and decisions with these metrics, and based on them, select the right action scenarios. However, before we begin, we need to “weigh” these four indicators.

We weigh the metrics of your project

In order to understand which metric influences the success of your business to a greater or lesser extent, we need a table. Let's fill it out together (thanks to the IIDF and Ilya Krasinsky for the table, by the way).

Skeleton table

Each line is one of the economic models of the project. The first is the current, base model. Each next one differs from the base one only in one of the indicators (which is indicated in the line title).

Columns are metrics. Reference columns are highlighted in grey. Blue - weighted indicators, red - calculated figures, result.

Let's fill in the basic economics of the project using the example of some noname mobile application with a good average order receipt (as a rule, this is some kind of application related to offline goods or services).

Filling the Base Model

The principle of this table is to see which change will have a greater impact on profits. In order to compare more or less equivalent changes, it is necessary to take only those improvements that can be achieved in no more than a month of work and tests (or better yet, a week). That is, if you are not confident that you can improve your conversion rate by half in a week, then reduce the change to something more realistic. For example, I took 3,000 as the base number of installations on which we look at the impact, and a period of two weeks.

Let's fill in the second line, namely the scenario in which we reduce the cost of one application installation, say, by 20% (with the initial figure of 30 rubles, this is more than realistic to do in two weeks of tests). At the same time, we do not touch all other indicators.

Filling out an alternative scenario

What do we see? That the gross profit, all other things being equal, became equal to 45,600 rubles versus 27,600 rubles in the original scenario.

Now let's fill in all the other scenarios.

Now let's add the "weighting" factors, which are essentially the ratio of gross profit after the changes to gross profit before the changes.

Calculated weights of indicators

Actually, these are metrics weighted by their impact on your business. What conclusion can be drawn from this for the example considered?

Conclusion

All other things being equal, your efforts should primarily be focused on the following actions (in descending order of importance):

1. Reducing the cost of acquisition.
2. Increasing margins (reducing costs).
3. Increasing the average bill.
4. Increased conversion.
5. Increasing the number of user purchases during their lifetime.

What does this mean in practice? Before making any decision to develop or improve a product, or prioritization, consult this weight distribution. Ask yourself questions: which metric is affected by this action? Move up the pipeline those tasks that are aimed at improving higher-priority business indicators.