What Compound Interest Has To Do With eCommerce Conversion Rates + 4 Tips For A Better Converting Store

conversion banner

Improving the conversion rate of each step a potential customer goes through in the sales funnel of your eCommerce store has the exact same effect as compound interest has on the money in your bank account (in case your are luckily enough to receive any interest at all), and you should make sure to use this effect to your advantage.

Even if you can increase the proportion of people that follow your sales funnel only by a small number, let’s say by 10% at each stage, you end up winning a lot more additional customers than you’d probably expect.

Sounds too complicated? It isn’t, I promise. In fact, it’s very basic math and here is how it works.

The Sales Funnel

The sales funnel for an eCommerce store selling physical products usually looks something like this:

sales funnel

We have a home or landing page, different product pages, a cart, and the checkout page.

Let’s say that 1,000 visitors enter your store via the homepage on a daily basis. Now, we all know that most people visiting a website that they are not familiar with will bounce off right away. For the sake of this example, we set our bounce rate to be 60%, which is pretty average.

This means that the remaining 40% of your website visitors stick around for a bit.

If we assume that two out of four users that haven’t bounced visit the description page of one of your bestselling products, we are left with 200 potential customers.

They all read your nice product descriptions. And out of 200 people, 70 really like what they see. They each add a product to the cart.

Now, your cart features an integrated shipping fee calculator, but 20 of your potential customers don’t want to pay for shipping at all and therefore leave your store.

Your remaining 50 store visitors are serious prospective buyers. They mean business and proceed to the checkout.

Unfortunately, another 15 doesn’t make the purchase, because they got distracted by something else that was displayed on the checkout page. They continue to click around in your store, but in the end don’t spend any money.

This is what the sales funnel for our specific example looks like:

conversions

At the end of each day 35 customers on average will have made a purchase in your store.

Remember that we said we’d try to increase the conversion rate at each stage in the funnel by 10%? Look at how our numbers change – it’s incredible!

conversions 2

This time, instead of 20% of all website visitors that proceed to the product page, it’s 22%. Then 38.5% instead of 35% add the product to their cart. And the same applies to the rest of the funnel.

In our second example we have increased the number of purchases per day by 15 (almost 43% growth), which adds up to a total of 50 daily purchases.

What? You doubt this to be realistic?

Increasing Conversion Rates

If the overall conversion rate of your eCommerce store is low, you’re missing out on a lot of sales every single day!

But the good news when you are trying to increase conversion rates is, that you don’t have to wait for weeks or months to see any effect. A jump in sales happens as soon as you have made an improvement to your site, whatever that might be.

Here are four tips for you to test in your store that are likely to boost sales.

Remove Sliders On Your Homepage

Do you want to know about a real conversion killer? It’s homepage sliders. I know this is contrary to what many web designers believe, but numerous tests have proven time and time again that sliders are one of the worst ways to present content to your customers.

The problem with a slider is that it creates banner blindness, which means that users almost always ignore it consciously or subconsciously, because they perceive it as a form of advertisement.

So, instead of implementing a slider on your homepage, why not use a simple static image in combination with a bit of text? Here is a great example of how beardbrand.com is doing it:

beardbrand.com screenshot

Static Homepage Image With Text – Screenshot taken from beardbrand.com

Use Short Product Descriptions With Bullet Points

Most people don’t like to read. This is particularly true when they are looking for information online. Here they prefer to skim the content and not digest every single word of it.

Now, I know that it’s important to you to provide as many information as possible about all the exciting benefits that your products have to offer. But trust me, you don’t want to create a giant wall of text, unless you want to drive the majority of your potential customers away.

It’s important that you make sure to keep product descriptions as slim as possible, and break them up into multiple short paragraphs. Bullet lists are another great way of highlighting the most important selling points to make them stand out.

If you want to learn more about how to write product descriptions that sell, you can do so here.

People Love Free Shipping

Unconditional free shipping with every purchase is what 73% of all customers feel is most important when buying something online.

This conversely means, charging shipping costs is what chases many potential buyers away, even if they already have added one or more of your products to their cart.

If you are currently charging for shipping in your online store, consider making it free. At least you should run a test to find out how it affects the purchasing behavior of your visitors.

free shipping

Offer free shipping to increase your eCommerce conversion rates.

Remove Distractions

Once a potential buyer finds himself on the checkout page he has almost reached the end of your sales funnel. Just one more step and you have made another sale!

All you want at this point is to make sure that absolutely nothing can interrupt the order process, which means you have to remove possible distractions.

And something that might possibly distract a user on the checkout page are shiny elements in the sidebar, the top menu, or an eye-catching banner close to the header. Run a simple A/B test and see how your conversion rate changes when you remove some of these elements.

It’s not unlikely that the checkout conversion rate jumps up. But I also once had a case where I experienced a drop in conversions with one of my stores, I guess because the site all of a sudden looked too different, which caused a lot of confusion among the users.

The Benchmark

Now it’s your turn to improve the hell out of your store.

But before our ways part, I want to leave you with a couple of figures you can compare yourself to:

Average eCommerce conversion rates range from 1% all the way up to 5% heavily depending on what kind of device your site visitors use. Desktop seems to convert best. Smartphone users make the bottom of the list with tablets being somewhere in middle.

Also, overall conversion rates in the UK are approximately 1% higher (3.57%) than global (2.48%) and US (2.46%) conversion rates.

Over to you!

Have you made any experiences with eCommerce conversion rate optimization, yet? What were your biggest gains, what the biggest surprises? Let us know in the comments below.