Is Your Online Shop Stranded in the Desert?

Many online shops do not generate revenue. Sometimes this is down to the shop itself or to strong competitors. In many cases, however, the expectations placed on the shop are simply wrong. The most important metric, in our view, is the conversion rate of a webshop.

1. What significance does the conversion rate have?
2. What is different in a webshop?
3. What is a customer journey?
4. The goal

What significance does the conversion rate have?

It tells you how many people have to visit your shop for one product to be sold.

What number do you think it has to be on average?

On average, 100 visitors are required for a single sale in a webshop. That means: out of 100 visitors on the website, only one buys. If you divide the number of visits by the number of individual sales, you get the so-called conversion rate. In this example (100 : 1) it is one percent.

Entrepreneurs who also run physical stores often set their expectations for the online shop far too high. The reason is that, in many cases, the customer journey is not factored into the process.

What does that mean?

In a physical store you mostly deal with visitors (customers) who are already well advanced in their buying decision. These visitors already know the products and specifications and often only need a few extra pieces of information to make a final decision.

What is different in a webshop?

The visitors of a physical store come well "pre-informed" because they pieced together the information themselves on the internet. But that also means many of them have already visited webshops to get to that information. And they did so without an immediate intent to buy – unlike in a physical store.

Visitors do not only come to buy

It follows that a webshop needs many more visitors than a physical shop, because the webshop performs additional jobs (information delivery) from which the physical shop benefits.

I know this problem from my own experience. I once ran a bicycle shop. In that shop I had a personal closing rate of 50%. When two customers entered my shop, one of them bought a bike.

For a long time I considered that a good conversion rate. I also thought I could carry my system into a different industry (online retail) and I unfortunately had to learn that this works that well only with direct on-site sales.

In the course of my marketing training I learned that the background of visitors on the web is a very different one. In the online shop you do not only find buying customers, you also find customers who are at the start of their customer journey.

What is a customer journey?

The customer journey is the journey we go through as people, from the moment we notice we have a problem to the moment we buy a product.

How long does the customer journey take?

That journey can take some time. It depends very much on your product. For a car purchase it takes longer, for buying a toothbrush perhaps only a few seconds. But it can happen that someone has to come back to your website many times before finally buying the product.

The difference to a physical store is: there, when customers enter, their journey is already behind them and they actually want to buy the product. That means in a physical shop the conversion rate will always be better than in an online shop.

How can you improve it?

With clients we have been working with for a longer time, we manage to lift the conversion rate above three or four percent. This requires a lot of work and a lot of optimisation. Not just in the webshop itself, but also in how customers come to the site and how customers are addressed in marketing. A cleanly worked-out customer journey is an important factor.

The goal

The goal is always to raise this metric as much as possible. Then you can achieve more sales with the same number of visitors. Put simply: if the conversion rate is two percent, two out of 100 visitors buy. As a result the revenue in the online shop also increases by 100%!

If you have questions about this, feel free to contact us! Our team will gladly explain in detail how to deploy this specifically for your webshop.