What Is eCommerce Conversion Rate & Why You Should Care

A beginner’s guide in layman’s terms for retail & eCommerce marketers & business owners.

If you’re a small business owner or marketer in the Retail & eCommerce space, the words ‘eCommerce Conversion Rate’ should ring a bell. And, in case it doesn’t, we’ve included a brief definition below in layman’s terms:

Mathematically, your eCommerce conversion rate is the percentage of the total number of transactions over the total number visits over a given period of time.

To illustrate this, let’s say that in January 2018, you had a total of 5,000 visits to your organic dog food website, The Prideful Pooch. During that same period, your site processed a total of 128 transactions. Your eCommerce conversion rate would then be factored as:

If you’re using Google Analytics (which you should be), your eCommerce conversion rate is automatically populated provided that you have eCommerce tracking enabled. Pretty simple, right? If you’re still with us, your next question is probably: why should I care and where should my eCommerce conversion rate be? We’re glad you asked.

On the topic of why you should care: your eCommerce conversion rate is a key performance indicator (“KPI”) associated with how effective your website and marketing is at converting site visits to actual purchasers.

Here’s a real-life use case:

Let’s say that you own Stick It to Me, a brick and mortar retail store that sells customized post-it notes. Let’s also say that in any given day, you have 50 people visit your store. And, of those 50 people, only 2 people end up buying anything. It’s the end of the month and you’re processing payroll, paying taxes and tackling all of the other unsavory things associated with running a business.

In taking a look at your books and quickly realize that you’ll be out of business in a few months if your business doesn’t process at least 7 transactions per day. Perhaps you panic. Perhaps you make frantic calls to the bank asking for a small business loan. Perhaps you start to drink, who knows?

After the dust settles, you take a deep breath, take an honest look around your store and come to the conclusion that with some careful planning, you can increase your revenue with some creative thinking. With sales stagnant, you don’t have the money to renovate your store, but you do have some control over what your customers see and what they interact with when they enter your store. With a new sense of determination, you’re committed to ensuring that one out of every five customers that visit your store end up leaving with something.

After a period of testing sales promotions, sending email newsletters, trialing different in-store displays, and placing merchandise strategically, you’ve done it. Suddenly, it’s April and you’ve exceeded your expectations! Now, one out of every three people that enter your store end up purchasing something. Enthralled with your progress and extra zeros in your bank account, you plan a nice vacation for you and your partner and start planning an in-store remodel.

Overly elaborate anecdotes aside, let’s take a look at the math:

January 2018

  • 50 potential customers per day = 1,500 shop visits per month
  • 2 transactions per day = 62 transactions per month
  • Average transaction value = $126.25
  • Total monthly revenue = $7,827.25
  • Conversion Rate = 4.13%

April 2018

  • 50 potential customers per day = 1,500 shop visits per month
  • 5 transactions per day = 150 transactions per month
  • Average transaction value = $103.77
  • Total monthly revenue = $15,565.50
  • Conversion Rate = 10%

That’s nearly a 100% improvement in monthly revenue without costly advertisements and other promotions to get new shoppers in the door.

Why the lengthy example? Because in a digital world, it’s easy for us to forget the fact that our website visitors are people, and should be treated as such. For those of us that don’t devote most of their careers to drawing parallels between what happens on the web and real life, a certain cognitive dissonance between what happens online and offline is normal.

With a firm understanding of eCommerce conversion rates and why they’re critical for your business, it’s time to take a look at how you can go about to introducing some process to monitoring and improving them.

1) Establish a benchmark: You can’t know where you’re going unless you know where you are. Take a look at the last 365 days of your business using the math outlined above and outline our eCommerce conversion rate by month. We’ve already mentioned this, but Google Analytics is an excellent, industry-preferred tool for measuring all of your important web analytics, including eCommerce conversion rate. Get started by integrating Google Analytics on your website and ensuring that you have eCommerce tracking integrated.

2) Set some goals: With your background research finished, it’s time for you to dream a little bit. Take a look at your historical data and set some goals keeping in mind the (lengthy) example outlined above. Come up with some baseline and stretch goals for your eCommerce conversion rate. As a benchmark, we recommend 10% to 20% growth on the benchmark and 30%+ for your stretch goal. The stretch goal should be aspirational…shoot for the stars. You can do it. While every business is different, take a look at these eCommerce conversion rate benchmarks to gain some insight on where your business ranks.  

3) Get real about your business: Having a firm understanding of what’s important to the customers currently visiting your store is critical to coming up with strategies for how to get them to purchase. Ask yourself: are my customers price sensitive? Do they come to my store because I offer something that no one else does? Is the shopping and purchasing process easy?

4) Promote a sense of urgency: Perhaps one of the biggest kept secrets in the world of marketing is promoting a sense of urgency among your customers.

5) Measure, cycle, rinse repeat.

 

Completely lost? Contact us for a consultation on how we can help.

Client Spotlight: Preparing a Sustainable and Humane Future with Technology

video script

Technology and how we utilize it is constantly changing – oftentimes evolving for the better. With every advancement in our connected, digital society comes new challenges that must be overcome in order to remain inclusive, accessible, and reliable.

One of our clients, Digital Future Society, is on a path to “unite individual efforts from industries, policymakers, and entrepreneurs to build a humane future for our society, empowering citizenship and leveraging on technology to build a new social contract.” In a rapidly changing technological environment, they’re on board to help people everywhere benefit from digital tools, the internet, and more, in a way that is truly humane and sustainable.

In a video recently released, team Oliver + Sons had the pleasure of crafting and communicating their mission. Through a series of workshopped writing sessions, we were able to come up with a full script and creative direction for the storyboard to help bring Digital Future Society’s goals and message to life. Take a look at the video right here:


Need a script workshopped for an upcoming video project? We’re always here to help out

WTF is GDPR and What Does It Mean for Online Marketing?

The General Data Protection Regulation (GDPR) has been in all of the headlines and swarming everyone’s inboxes since mid-May as businesses work to comply with the EU’s new data privacy and protection rules. Given the nature of our job as marketers, this automatically affects us and the companies we work with – especially when working with businesses inside and outside the European Union. Many of us online marketers are still a little shaky on what these new laws will mean for marketing efforts in the long-term, though.

Straight from Investopedia‘s mouth, here’s the gist of what GDPR really is:

The General Data Protection Regulation (GDPR) is a legal framework that sets guidelines for the collection and processing of personal information of individuals within the European Union (EU). The GDPR sets out the principles for data management and the rights of the individual, while also imposing fines that can be revenue-based. The General Data Protection Regulation covers all companies that deal with data of EU citizens, so it is a critical regulation for corporate compliance officers at banks, insurers, and other financial companies.

Without all of the jargon, the awesome people at Moz explained it all in a much more helpful, easy-to-digest way. Along with this, they break down what exactly GDPR will do to the tools and services we regularly use to collect, process, analyze or store data; mainly Google Analytics, email marketing, referrals, and AdWords. Here’s a quick recap of what Moz had to share:

GDPR + Google Analytics

If you use Google Analytics, Google is your data processor and since they handle data from people all over the world, they’ve had to take steps to become compliant with GDPR standards. However, you/your company are considered the data controller in this relationship and you will also need to take steps to make sure your Google Analytics account is set up to meet the new requirements.

GDPR + Privacy Policies

Under GDPR, a site’s privacy policy needs to be clearly written in plain language and answer basic questions like what information is being collected, why it’s being collected, how it’s being collected, who is collecting it, how it will be used, and if it will be shared with anyone else. If your site is likely to be visited by children, this information needs to be written simply enough for a child to be able to understand it.

GDPR + Email Marketing

As far as email marketing goes, GDPR is going to have the biggest impact on those who do things that have already been considered sketchy, like buying lists of contacts or not making it clear when someone is signing up to receive emails from you.

Even if you’re confident your European contacts have opted in, there’s no harm in sending out an email asking them to confirm that they would like to continue receiving messages from you.

GDPR + Google AdWords

Google will now be requiring publishers to get clear consent from individuals to have their information collected. Not only does this mean you have to give more information about how a person’s information will be used, you’ll also need to keep records of consent and tell users how they can opt out later on if they want to do so. If a person doesn’t give consent to having their information collected, Google will be making it possible to serve them non-personalized ads.

See more of Moz’s GDPR breakdown here >> 

Transparency, in every sense of the word, is the wave of the present and future of business. It’s our jobs as marketers to make sure that ourselves, and the clients and companies that we work with, are fully on-board with these new privacy changes. With this new era of digital integrity, GDPR is only the beginning of new rules and regulations where personal information is concerned – let’s all buck up and get ready for the next changes in data law because it’s only a matter of time before they’re put into place.

Marketers, Are You Taking Gender Representation Seriously?

gender representation in marketing

Gender roles and identity have fluctuated in the public eye a lot in the last few years. As perspectives are continuing to shift and evolve in the “real world,” so too must perspectives change for brands. The average consumer isn’t taking the same outdated ideas to heart – they are more conscious and informed than ever. In response, brands are beginning to take notice, are trying to hear and understand, and are making necessary changes to implement more inclusive and representative branding.

Let’s look at it this way:

“From a statistical standpoint, 50% of millennials feel that gender is on a spectrum, and 56% of Gen Z’ers know someone who uses gender-neutral pronouns.” – Andy Bossly

So, is your brand making the effort to accurately represent and being wholly inclusive? A Marketing Dive article we recently soaked up helps explain why companies should take another close look at gender representation, and how it can be made possible with the use of amazing marketing technology. Here’s a sampling of the piece:

While there may be a swell of support, ads that break with a male-female mold are exceptionally rare. Part of that might stem from marketers’ fear of backlash from either side of the political aisle — conservative viewers in favor of traditional gender representation and also progressives sensitive to ensuring people are accurately and tastefully portrayed. In the latter case, panelists said it’s more of a learning process than a crucible.

“The language is evolving […] don’t get stuck with the language, keep up as best you can,” Shane Whalley, the owner of Daring Dialogues Consulting and an adjunct assistant professor at The University of Texas at Austin, said. “The other really important piece is that if you make a mistake, which we all do, just stay in those conversations and listen to the community.”

One example of an ad depicting gender fluidity that earned praise was Coca-Cola’s Super Bowl TV spot from this year, which used they/them pronouns. Though the creative calls this out, it does so without distracting from Coke’s broader messaging, which has always been about optimism, according to Bossley.

“It all laddered into their existing brand platform that they’ve had for over 130 years,” he said. “It made sense — it didn’t feel like an outlier for them.”

However, if the appeal of gender fluidity in advertising does grow for marketers like Coke, it’s important for them to be especially mindful of actually embodying inclusivity beyond what’s presented to consumers.

“Let’s say you do a great campaign and I feel seen. I’m going to go to your company’s website, look up your non-discrimination policy and see if it’s inclusive,” Whalley, who identifies as genderqueer, said. “The inside-out piece is really important.”

Read the rest of the article on Marketing Dive here >>

Then reach out to us with your thoughts here >>

How Can I Create Ads That Avoid Ad-Blocking Technology?

People are blocking ads at an alarming rate. Long gone are the days where you’d be made to sit through a long YouTube ad totally unrelated to your chosen video or be visually violated by refulgent call-to-action buttons in display ads.

Consumers are tech-savvy nowadays, especially the Millennials and Generation Z. With studies estimating that 18-24 year-olds are 3x more likely to have ad blocker software installed than not and with 91% of people saying ads these days are more intrusive today than one or two years ago, just what can we do as marketers to make sure our curated content reaches the youth of today?

The Game Changer for Digital Advertising

The study pulled out another interesting statistic that  73% of people said they would be willing to pay for content to avoid ads. BINGO!

To get on the right side of our tech-savvy consumers, we’ve got to be creating great content that will interest and engage them. No gimmicks, click baits, or bolshy buttons in sight, just honest, interesting targeted content that will be inherently valuable to a consumer.

The Solution to Our Ad Woes: Native Ads + Adding Value

What is a Native Ad and how do they work?

Native advertising – in which the ad experience follows the natural form and function of the user experience – is being used more and more by big brands and startups alike. Native and branded content placements neatly combine with the content on the site to look like one and the same, with correlating form and function with the native user experience. It’s so clever that sometimes it’s even difficult as a marketer to spot some native ad campaigns. As a result, these ads have a higher click-through rate (CTR) than traditional display ads as it is non-interruptive content for the interested consumer.

Take a look at the other advantages of native ads, through Sharethrough’s infographic:

Ad-Blocking TechnologyAd-Blocking Technology

Non-interruptive has become a form of intelligent ad design.

Check out a mobile example below:

Ad-Blocking Technology

Source: Sharethrough

As seen in this example, the native Google ad is placed within the consumer’s ‘Auto News,’ and is only recognized when clicked on, or when the consumer is paying very close attention to all the content. Even then, the content is by no means strongly oriented towards a hard sell. Rather, it’s valuable content with the objective to builds up awareness of a brand and to prompt the consumer to click.

What content should I be advertising?

These can be in the form of anything that you feel would be of value in the eyes of the consumer. Mediums such as blog posts, product updates, and industry expert information all work well as native ads to engage your target audience.Be savvy in the way you introduce your calls-to-action within the copy in your chosen medium. Don’t bombard your reader with sales jargon; instead, position external links naturally and cohesively within your writing. Inviting a reader to opt-in to an email list or to learn more about a product or service in the copy of the blog post is a great way to engage their interest. Additionally, as your content is jammed packed full of value, there is an increased likelihood that the reader will go ahead and share your content, at no cost to you! Win, win.  

The relationship between consumers and branded online advertising is only going to get better. Producing better ads requires a partnership between publishers/platforms, advertisers, and consumers. Collectively, we need to make ads less intrusive and more relevant for consumers. As users become more accustomed to a less interruptive way of receiving ads, we can then re-establish the trust lost between consumers and brands.

Do you need help with your Facebook ads or Google ads and want advice for ‘going native?’ Get in touch with us to talk shop!