We hear the term ‘conversion rate’ tossed around conversations on how to grow sales but how do you track that number and why is it so important?! We’re here to explain why it matters with simple math and 3 ways you can start boosting your shop’s conversion rate.
In the retail world, the conversion rate measures the number of customers that purchase from your shop. The math is simple: Divide the number of transactions by the number of visitors, and multiply by 100.
Transaction / customers x 100
For example, if 100 people visit your shop and only 20 of them make a purchase, your conversion rate is 20%. Easy.
We consider conversion rate one of ‘retail’s magic numbers’ – 3 critical metrics for setting your strategy. Your conversion rate can give you insight into how well your website functions, your in-store experience and about the quality of your traffic. Essentially, once you’ve got their attention, how often do you make the sale?
When it comes to growing your sales, there is a lot of emphasis put on driving more and/or new traffic. It can be easy to assume that more traffic = more money. But, that’s rarely the case. If you already have a great conversion rate (more on that below) or are brand spankin’ new, then yes – driving more visits would be the next logical move. But for the most part, spending some time (90 days or so) focused on optimizing your conversion rate is like giving a gift to your future self.
- Converting visitors who are already in your shop or on your website is much more efficient than trying to acquire new customers who may not be familiar with your brand. Use what you got. Catch our drift?
- Sending more traffic to a website or shop that isn’t optimized for conversion is wasted effort. It’s like pouring water into a bucket full of holes. If you are spending your precious resources on getting more people to visit you, you want to feel confident that you’re reaping the rewards of that investment.
What is a good conversion rate and how do I track it?
BRICK & MORTAR
good conversion rate (average): 25% – 35%
great conversion rate: 35% – 50%
amazing conversion rate: 50%+
If you have a brick and mortar shop tracking your traffic doesn’t need to be high tech or sophisticated- it can be as simple as getting a tally counter and clicking when someone walks into your shop. (Of course, there’s fancy tech you can install that counts foot traffic for you. ) You’ll then take the number of transactions from your POS system and calculate your conversion rate daily! This will also help you plan things like staffing, breaks, shop hours etc.
good conversion rate (average): 1.0% – 1.5%
great conversion rate: 2-3%
amazing conversion rate: 3%+
Calculating your conversion rate for your ecommerce site is a little less manual. You can easily gather the numbers you need from your website + Google Analytics (which we highly recommend using). Here you will use “site sessions” as traffic and divide by the number of transactions to calculate. We recommend tracking your conversion rate weekly and monthly for your web shop.
3 ways to increase your shop’s conversion rate:
Making sure your shop looks beautiful and accessible IRL and online. For example: making sure all the sizes you have available are on the rack so someone isn’t discouraged at first glance because they don’t see their size or making sure the products you have online have high quality images and are organized in collections that are easy to shop!
MAKING A CONNECTION
Brick & mortar babes – this one’s for you! Starting a conversation, it doesn’t have to be about what you’re selling, can be so powerful. Establishing a connection between you and your customer makes them feel more comfortable in your shop. They’ll be more likely to ask you questions about products or for recommendations, which can in turn lead to a sale!
Online, reviews help buyers feel more confident in the product. Since you can’t be there to tell your customers why you and your community love the item they’re looking at, the next best thing is to have product reviews on the product page. Reviews are that extra bit of encouragement some customers need to add to cart!
In the process of improving your conversion rate, you are bound to learn things that will help you be more effective overall in your marketing – what details customers respond best to, what stories resonate, common questions + road bumps. And that my friends is what we call *~efficiency~*.