Three Key steps in Conversion Ratio Tracking

For an e-commerce website, it is important to track your success, especially if you have no idea where you rank in the search engines. The best way measure your e-commerce success is with Conversion Ratio Tracking. Tracking your business activity from your website is the best way to improve your results, and turn browsers into buyers.

You spend large amounts of time researching keywords, creating content for your pages, creating search engine friendly pages, which ultimately help in bringing you traffic and sales. But how do you measure your actual success?

What is Conversion Ratio Tracking?

Conversion Ratio is the number of sales per site visitors, or the percentage of visitors “converted” into sales. So if you made 10 sales from 200 visitors, then your Conversion Ratio is 1:20, or 5%. Examining the data that makes up this statistic, such as the number of visitors, where they come from, how long they stay in your site, and analyzing ways to improve this number is called Conversion Ratio Tracking. This is different than Return on Investment, or ROI Tracking. ROI is used for calculating return on investments put into advertising, whether pay per click, banner advertising, or purchasing text links. The methods listed here overlap greatly with ROI Tracking; however, there is other detailed information that goes into ROI tracking that we won’t be necessarily dealing with in this article.

Conversion Ratio Tracking is the basis for all sales analysis, and its objective is to increase and dissect a business’s ability to generate leads and close the transaction. For every certain number of visitors to your website, you will make a sale. The fewer visitors you have per sale, the higher the Conversion Ratios and the more visitors you have between sales mean lower ratios. The Conversion Ratio is a golden number of advertising. This measures how many visitors to your site actually became customers. Ratios vary widely from industry to industry, but what we are watching is the change over time. And you certainly want that change to be positive.

There are three key steps to successful Conversion Ratio Tracking; within each step are several concepts that will help you achieve this success.

{mospagebreak title=Stats Analysis}

Stats Analysis: Understand your web and sales statistics

In the previous article, we talked about understanding your web stats, and how to use them for marketing. In Conversion Ratio Tracking, you will need to go several steps further, but you will need a good foundation by understanding your basic web stats. On top of that, you will need to know a few other stats that are specifically geared to e-commerce. The more specific statistics you should be familiar with are:

Total Sales – This is how many sales you’ve received during a certain period of time. For example, if you are performing monthly Conversion Ratio Tracking, then you’ll need to know how many total sales you’ve had within a particular month. This is the first factor you’ll need to have in order to calculate your Conversion Ratios. Without this number, your conversion rates would be impossible to track.

Total Items Sold – This statistic isn’t as necessary to know, unless you are tracking results per individual items, or individual categories. Sometimes, it is useful to know the total of items sold, and which items are better sellers than others. This will help you decide which products are worth selling, and which ones are simply taking up space on your website.

Average Amount Per Sale – To find this number, you will take the number to total dollars your customers spent in the given period of time, divided by the number of customers who purchased. So, if you’ve sold $1000 in a month’s time, and had 20 customers, then the average amount sold would be $50 per sale.

Number of New Visitors – We referred to this statistic in the previous article in the section of understanding your web stats. This number is important to Conversion Ratio Tracking because it is the other main factor used to calculate your conversion rate.  Remember, Conversion Ratios are calculated by the number of sales you have to how many visitors you have to your site. A better ratio might be to calculate how many sales divided by the number of NEW visitors.

Note: this number should not be determined by IP Addresses, or by 3rd party cookies. The best way to track new visitors is with an analytics program that uses a combination of tests and filters:

  • 1st party cookies instead of 3rd party cookies, which are likely to be rejected by anti-spyware programs and browser security settings
  • 1st party cookies that eliminate duplicate data by IP address filtering
  • Only analyzing those cookies data within 24 hours of creation, since it is rare for people delete their cookies every day
  • Implementing newer technology such as Macromedia Flash’s local shared objects (LSO) which are not detected by spyware programs and not deleted

Number of Returning Visitors – It is important to you to know how many of your return visitors are repeat customers, or whether it takes visitors a few visits before they decide to purchase. This information could help you understand and accept lower Conversion Ratios if it takes them several return visits before purchasing, and could be used to understand the buying habits of your repeat customers.

{mospagebreak title=Measuring Qualified Leads}

Measuring Qualified Leads: Understand your Targeted Traffic

Every good sales person knows that the actually selling of the product to the customer is usually only half of the battle. The other half is divided between research and follow up. The research results in knowing a lot about your customer and target audience, and their patterns of buying habits. Follow up is the final step to get the customer to the action step: purchasing. Follow up can also include how you could improve on your technique for the next time. Being able to analyze which customers are more likely to buy is the key to measuring qualified leads. But how can you know which traffic is actually the traffic that leads to a sale?

Several ways you can find this out and make use of the information from your website statistics:

Visitor Paths – What is the navigation path or pattern that a visitor follows or makes before purchasing from your site? This is one of those statistics that is best viewed over time. The more you watch this, the better your chance of figuring out what is a successful traffic pattern in your site. Let’s say Page 1 has a featured product that sells more units than the featured product on Page 2. You then compare where a visitor left your product Page 1 to end up at your shopping cart’s checkout process to complete the sale against the same process for Page 2. This will help you improve Page 2 so that it is as successful as Page 1, increasing your sales, and therefore your Conversion Ratio.

Referring URLs – Where is the traffic generated that produces those customers that buy? You can find that the data regarding where a customer comes from is extremely important to your conversion rate, because it measure how qualified that referrer is. For example, if you receive several successful sales because of a referring link on Froogle, then it’s a good place to start in generating even more traffic from Google’s marketplace. Further, if you have referring links from, but find that these visitors don’t buy as often, then perhaps you should rethink your strategy there.

Tracking sessions or cookies – Every good e-commerce site will use cookies or sessions to track the behaviors of their customers. It’s a good way to know in a glance what products were viewed, how long a visitor stayed in a particular category, and if your site has even been bookmarked for them to return to at a later time. It is possible, however, for returning visitors to seem like new visitors after having deleted their cookies from their computers, or when sessions expire. One study reports that while cookie-based tracking was perfectly adequate over a short period of time, the number of people who periodically delete cookies or use more than one computer can lead to significant inaccuracies over a prolonged period. Therefore, relying solely upon cookies to track your visitors and their habits over time can cause you to miss out on what you might be able to do to improve your Conversion Ratios, or cause your website stats to be off base.

Entry and Exit Pages – Determining on which pages your customers landed when referred from an inbound link, and on which pages they left your site, can help you analyze which incoming links are bringing in qualified traffic, and which ones may not be performing as well. Exit pages tell you many things about your checkout process as well as indicating overall site trends. Whatever the reason may be for your visitor to leave, knowing at which pages they are leaving will help give you a good basis for improving those pages, and honing your Conversion Ratios.

{mospagebreak title=Chart Purchase Trends}

Chart Purchase Trends: Find out what makes your customers buy (or why they are NOT buying).

It is important to analyze what makes customers buy your product, and why they leave without purchasing. There are a few concepts you should explore when looking at this, as well as utilizing some other statistics at your disposal to encourage you to determine what needs to be changed and what may just need tweaking. Many web stats programs include the ability to view these statistics in graph or chart format. However, some prefer simple analog numbers. Either way, you’ll want to monitor your progress.

Landing Pages – In marketing terms, a landing page is a special page that visitors are directed to once they’ve clicked on a link, usually from an outside source such as a link from a search engine. It indicated what page they “landed on” from an inbound link from another website. The page is usually tightly focused on a particular product or service with the objective of getting the visitor to buy or take some form of action rapidly that ultimately leads to a sale.

Your landing pages are extremely important, because it is the first representation of your website that potential customers will see. If you have outside links to all of your product pages, then all of those pages could be considered landing pages. You only get once chance to make a first impression. Having good, keyword-rich content on your landing pages will attract more buyers, and directly affects your Conversion Ratios. It also affects how you are ranked in the search engines.

Feedback Process – Customer feedback polls or surveys are a good way to get a customer’s feelings regarding the product, the customer service, your ordering process, or any other information you’d like to know. Comparing these results will allow you to understand what make your customers happy, and what frustrates them, and what could cause them not to buy.

You must be careful, however, because you certainly don’t want to spam your potential customers, or make existing customers wish they never bought from you. Therefore, give them an opportunity to decline giving you feedback. Understand, also, that there may be no good way to question visitors who have not bought your product, and emailing them for feedback may turn them off further, enforcing their decision not to have purchased from your site. This is especially true if they feel you’ve captured their information while violating their privacy, like using tracking cookies, to find out more information about them than they likely wanted you to know. You may, however, include an “anonymous” feedback form on your website, which allows people to tell you what they think without fear of being spammed by you. This option has been known to be highly effective for feedback purposes without making consumers feel as if their privacy has been violated. A simple form mailer script in a small table or division in the lower right-hand corner of your site, or perhaps a JavaScript popup when they leave during the checkout process, may be a couple of ways to receive your anonymous information.

Page “Stickiness” –Stickiness is the likelihood of successfully retaining a visitor who arrives at a key landing page. This statistic is a combination of two common web statistics: how long a visitor stays on that page, and how many requests or page views it receives. The higher the number of requests and page views for a site, the better your chances are to turn that visitor into customers, therefore the higher its stickiness. The same is true about how long they stay in your site as well. If you find that your visitors don’t view many pages, then you would need to look at why. Perhaps they don’t like all of the popup ads they are encountering, or maybe your outbound links are inadvertently sending your visitors out of your site, simply because you failed to have your links to other sites or areas open in a new page. There are many things that lead to how sticky a page might be. Is your content interesting enough? Is it easy to navigate your site, so that your visitors are finding what they need to, or is it too hard that after a couple of pages, they simply give up? What about color? Is your page so bright they either need to wear sunglasses or simply close the browser window? Improvement of site stickiness can primarily be accomplished through enhancement of website content. When applied to your product descriptions, you can improve your web content, and this also makes it much easier for search engines to index you.

{mospagebreak title=Chart Purchase Trends (Continued)}

Drop out rate –The statistic can be measured by how many visitors begin the checkout process, but never finish it. This is another place where exit pages come in handy. Drop out rates are also referred to as Page Rejection/Abandonment Rates. Whenever you see high values for this calculation, you immediately want to examine that page for persuasion issues! You’re getting a wake-up call that the page isn’t working! Perhaps your shipping charges are too high? Are customers abandoning their shopping carts on the shipping page? Perhaps they don’t like to pay with PayPal. Are they leaving during the payment process?

Monitoring where in the checkout process a customer leaves is important too, because this will better help you understand how to tweak the process. Improving your drop out rate will dramatically increase your Conversion Ratios in a short time. Remember, customers do not want to fight their way through a website’s checkout process.

Habits of returning visitors – Large numbers of returning visitors are a pretty good sign. What this indicates to you is that your content or products are interesting enough that makes a potential customer want to return to your site. Sometimes, too this statistic will give you better understanding of the trend of your customers purchasing habits. Sometimes, it may take visitors several “trips” to your site to decide to purchase, especially if they are big ticket items, or highly competitive markets, like electronics or computers. People want to feel like they’ve gotten a good deal, and want to do their homework first. In this case, especially if you fall into a competitive market, you will tend to have lower Conversion Ratios than a niche product. Knowing the habits of returning visitors will give you a good clue as to what your Conversion Ratios should be, and how you can be right on track with your site adjustments.

You can utilize these three steps, Stats Analysis, Measuring Qualified Leads, and Charting Purchase Trends; to measure your Ad Conversion Ratios or in Affiliate Tracking as well. Most all of the same concepts apply in measuring how effective your ad campaigns are, and which sections of your marketing plan need revising.

While overall site Conversion Ratios may not provide the level of information necessary to accurately track your results, it’s a good way to mark your trends. However, sometimes it is necessary to track each page individually. If you have thousands of products in your e-commerce store, this can be a very difficult task, indeed. You may want to break your stats down into different areas of your site instead. For example, you may want to measure how many visitors actually reach your shopping cart page, and leave during checkout. This way, you can know to improve your shopping cart page, while whittling out the visitors that don’t fall into this statistic. Another example would be individual category tracking. For every 500 visitors that arrive in your store, you could calculate the amount of visitors that actually buy from a particular category over another category. This way, you know that you need to improve the category that isn’t receiving as high of a Conversion Ratio as another category. If you need more in-depth tracking, you’ll want to make sure you have a web stats program that is developed specifically for that purpose.

If your sales process requires several steps, you may want to track your conversion rate from one page to the next. The first page of your sales process might get 100 visitors, while the second page shows 40 visitors – you have a 40% conversion rate from the first page to the second, while by the third page, you end up with 10 visitors. Your conversion rate from the second to the third page is also 40%, but only 10% from the first page. You can make improvements to the first and second pages, and try to get the ratio up to 50% to 75%. In this way, you can track, and therefore work to improve the Conversion Ratio of a multi-step sales process one page at a time to ultimately increase your Conversion Ratios overall.

Without knowing the basics of web statistics, it will be impossible for you to understand the more advanced features that are involved in Conversion Ratio Tracking. Successful tracking also requires time, research and patience, as well as a good understanding of your visitors’ habits.

There are many other stats you can monitor and ratios you can calculate based on any your web stats program, you can even make up your own calculations, but if you don’t use them effectively, you won’t be able to convert the number of visitors to buyers, or even understand why they are not buying your product. Especially if you have an e-commerce site, you cannot afford to miss tracking your visitors to sales ratios. From finding out where your visitors came from, to where they traveled, and what they did once they got there will be the key to your understanding your customers, and learning about what they really want, then selling it to them.

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