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100+ E-Commerce Merchants Reveal the Key Strategy for Improving Conversion Rates

100+ E-Commerce Merchants Reveal the Key Strategy for Improving Conversion Rates

Over the past 6 months I have spoken to over 100 e-commerce merchants specifically around conversion rates and the steps they take to improve them post covid. What I have learnt is that when it comes to separating those that have seen success from their efforts and those that haven’t, the key reason comes down to understanding the problem.

As Einstein said, “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

You see, too often we jump to solutions without fully grasping the problem at hand, leading to ineffective solutions or even creating new problems. So to explore this further, I must first define what I mean by conversion rate. It’s calculated by dividing the total number of orders placed by the total number of unique visits to your website.

payment process
Improving conversion rates

Simple enough but just having a number isn’t enough. To really improve a conversion rate, you need to understand first where customers are dropping off in the sales funnel so you can then establish why and then work on the solution. From browsing to checkout, there are countless reasons why a sale might be lost below are the main reasons.

sales funnel and Improving conversion rates

Arriving at the above and the numbers for each block is a challenge, and the common method most merchants use to tackle this problem with is with combing web tracking tools like Google Analytics and using their Payment Service Provider’s (PSP) KPI dashboards to cover the payment stages (everything post Checkout page) –

combing web tracking tools and using Payment Service Provider

And it is here where I have heard the failure to understand the problem correctly appears. As when merchants marry KPIs from these two different sources together they often fail to discover that the different parties may have different interpretations of the same metric.

For example, a Payment Service Provider (PSP) will usually only measure success based on payments that reach an end conclusion.

For example if the below happened (numbers represent customer for each section) –

measure success and Improving conversion rates

Then a merchant would expect the payment success rate to be 46% –

46 successful payments divided by 100 customers from Payment page  (46 / 100) 

however PSPs will often report this scenario as having a payments success rate of 87% –

46 successful payments divided by all payment requests that made it to them and completed (successful + rejected for suspected fraud or insufficient funds) (46 / (46+5+2) ) .

The reason behind this is that PSPs do not include customers that either –

a) Never enter their payment details and thus never clicked pay

b) Drop off during the authentication process and never complete

But awareness of this difference is often missing, take it from a major sportswear company we work with. They initially believed their payment success rate from Payment Page onwards was 95% as this was the number quoted to them by their PSP but after further investigation and understanding their sales funnel, they discovered it was closer to 60%.

So, my advice to anyone charged with improving their checkout conversion rate is before rushing to select a solution to take a moment to truly understand your sales funnel from top to bottom, ensure there is only one version of the truth and track customer total numbers by stage to stage from start to finish. By doing so, you’ll be able to identify where the problems that need solving actually are leading to more impactful solutions, a higher conversion rate and more sales.

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