Scott Porad

I regularly receive questions from readers about my experience working on the web, at Cheezburger, and so forth. I enjoy it when people reach out to me, which is why I make all of my contact information—including my phone number—available on my contact page. If you have a question for me, on- or off-topic, please don’t hesitate to send me a note.

Recently, someone who runs a medium-sized e-commerce site wrote in:

We’ve been having a debate around what our “average conversion rate” should be.  Currently, it’s 1%, but this article says we should expect 2% or higher. Does this mesh with what you saw at drugstore.com and other online retailers?  If yes, where are we going wrong?

Comparing conversion rates from one business to another is really tricky because it’s not apples-to-apples.   Here’s some factors that confound the conversion number:

• Brand — all other things equal, strong brands are going to convert better because customers know and trust them.
• Frequency — all other things equal, products where the customers shop more frequently tend to convert better.
• Price — all other things equal, products where the price is lower tend to convert better.

Take, for example, my recent experience with Zappos—they converted me on a higher price, with a low frequency item, because I trusted the Zappos brand.

It turns out, this applies to both the online and offline world.  A great example: Starbucks…great brand, high frequency, low price. How often have you walked into a Starbucks and not been converted?  Their conversion must be upwards of 99%!

All that being said, it’s a mistake to get hung up on conversion X% vs Y%.  The thing to focus on is increasing X%.

Let me make two points about increasing X%.

First, I cannot understate how much influence product and price have on conversion.  Shopping online…it’s just so easy to pop in-and-out from store to store to find the best price.  I’m not advising you to be a “low cost leader”.  But, you can fiddle with your web site a hundred ways to heaven and it will barely make a dent compared to having the right product at the right price.  In other words, get the basics of merchandising right first.

Second, the real thing to think about is not “overall conversion”…an important number, but deceiving.  You want to look at “the conversion funnel”:

Visits =>

Multi-Page Visits =>

Add to Cart Clicks =>

Checkout Clicks =>

Place Order Clicks

(The notion of a conversion funnel is an idea that I pioneered at drugstore.com many years ago, and now is built right into Google Analytics.  For free, no less!  A shout-out to Dana Morningstar who worked tirelessly to put together our first funnel.)

The idea here is that you want to look at each step in the process in order to assess where your customers are getting stuck.  Each one of those “=>” can be calculated as a ratio, and you can see…

…what percentage of visitors actually shop?

…what percentage of shoppers actually put something in their cart?

…what percentage of people with items in their cart actually attempt to checkout?

…what percentage of people who attempt to checkout actually place an order?

From there, you can see what’s working and what isn’t, then focus your changes appropriately…keeping in mind that your changes might not be development on your site, but possibly adjusting your product selection or price.