The conversion rate a figure which is used in e-commerce as a benchmark to measure the ‘health’ of a store. It can help measure everything from the effectiveness of marketing strategies through to the efficiency of a website design.
If you increase the conversion rate, you will be increasing your sales. Therefore it is an excellent goal for all e-commerce business to have.
Even in the smallest or newest of ventures, watching the conversion rate is key. Every month the goal is to see this figure increase (although there could be times when it decreases which I’ll cover below). If you have Google Analytics connected to your website/store, you will have a lot of data to help you better understand the conversion rate. The challenge with understanding the Etsy conversion rate is that the data we have is very limited and that can make understanding what is really going on quite difficult.
One important thing to note about conversion rate – specifically in your Etsy stats – is that if you have a small number of views a day, it is very easy for this figure to become skewed. Let’s say I have 50 views a day, and I post in a group asking for some feedback and five people look at one page on my store, that’s increased my average by 10%. On the other hand, if my average views were 000s per day, those five views would be statistically insignificant.
The challenge in Etsy data compared with GA is that the Etsy data we use to calculate the conversion rate is very top level. In GA, we can look at conversion rate per product, so it is much easier to see any anomalies which are skewing the data. Also, in GA you can look at the conversion rate of unique visitors or number of sessions which is useful.
Update: In May 2017, Etsy stats now include the number of visits, as well as total page views. This is the same as the sessions number in Google Analytics. Therefore a more accurate look at conversion can be achieved by looking at the visit figure.
What is a Good Conversion Rate?
In e-commerce in general, a figure of around 3% is what most businesses aim for. Although I have seen this figure quoted by Etsy it the Seller Handbook, most sellers report a conversion rate of 1%. Part of the discrepancy here is that in Etsy we can only look at the total of pages viewed, whereas outside of etsy most people look at number of visits (a visit is when someone visits your site and does not count the number of pages viewed).
However – it’s important to note that the only figure you should be measuring yourself against is your own 🙂 Plenty of sellers have great $$ with a low conversion rate and plenty of others have a high conversion rate with low $$. There are lots of different factors that come into play here. The most important thing to do with this figure is to work to increase it.
Tracking Your Conversion Rate
I urge everyone to have GA linked to your store. If I had a magic wand, I’d be magicing this over to you now and giving you monthly reports with all the data you need. However, until I develop these magic powers, we’re stuck with what we have 🙂 I recommend starting a spreadsheet or going old-skool and keeping a notepad with the data in it.
Baseline – the first thing we need to do is to work out a baseline for your store. This is the figure that we’ll be looking at to see if your conversion rate is going up or down. We want to use as much data as is relevant for this, in order for any anomalies to be evened out (for example if your store is affected by seasonality). If you have a been selling on Etsy for a over year, getting a baseline from a year’s worth of data would be great. If you only have six months – that’s fine. In Etsy, take the number of views and the number of sales divide by views and multiply by 100. This is gives you your conversion rate as a %. This is your baseline figure. Your goal is to increase this every month.
Monthly – calculate your conversion rate each month. Note anything that happened during this month that might have affected this – for example, seasonality, promotions, being featured in a blog etc.
*** If you have enough data in Google Analytics, take the number of sessions and number of unique visitors and use this to calculate a conversion rate and track these too. I’ll write a separate post about this later.
What To Do With This Data
This is part of the health check for your store. Keep an eye on it and watch for trends. If you see the conversion rate fall off, see if you can see why. If your conversion rate decreased, it might be because you are getting lots of zombie page views – page views where the person has no intention of buying. In that case, your conversion rate has become diluted.
So If My Conversion Rate Goes Up That’s a Good Thing?
Well, yes and no 🙂 This is why conversion rate is a great figure to use as PART of your monthly health check – but can be a big fat red herring. If your conversion rate increases, it could mean your views are dropping 🙁 your regular customers are still buying, but you are not getting visitors to your store. In that case, it is a Bad Thing.
And If My Conversion Rate Goes Down That’s a Bad Thing?
Well – again, yes and no! If you have just run a campaign to potential new customers, you may have lots of new people visiting your store. They are not buying, they are visiting and may come back later to buy. In this case, your conversion rate will go down, as there has been an increase in views – however, this is part of your strategy, so in this case it’s a Good Thing.
….. which is why they say, Lies, Damned Lies and Statistics 🙂
How to Increase Your Conversion Rate
If you are getting views and no sales, the answer will be on your product page. People have seen your product in search, they have clicked to find out more – but when they arrive they don’t buy. To increase your conversion rate you need to convert people on this page.
- Do your descriptions tell them all they need to know. Size, materials, color, fragrance
- Do your descriptions ‘sell’ the product – does it really make people WANT to buy your product NOW
- Do your previews show your product in a positive light. Do your preview shots show the size, quality etc
- What are the choices a customer has to make – give them too many options and you give them a reason to go away and think about it
- Is there a disconnect – did people think they would see something else when they landed on this page? This might happen, for example, with someone selling patterns. Someone might click to find a finished product but instead find the pattern. Is there anything you can do to mend this disconnect – or is it something you have to live with?
Keep track of your conversion rate and use this as part of your regular store review.