I cannot stress the importance of targeted traffic for the survival and prosperity of any web site and the importance increases when this web site is an ecommerce web site. But getting more and more traffic is not always the answer to increase your profits, I am not saying to stop working at increasing your traffic but I am saying that you must also focus on your 'traffic to sales conversion rate'.
Let me illustrate this using an example:
You sell a £50 product, and convert 1% of your visitors to sales. 100 visitors would earn you £50 and if it costs you £40 to get these visitors, you're making a profit of just £10. Therefore, if you wanted to make £1000 a month profit you would need 10,000 visitors/month
Now, if you raise your conversion rate from 1% to 2% for every 100 visitors you would get two sales, so now your sales are £100, but the cost of your traffic remains constant at £40. Your profit is now £60. So without spending any more money you have increased your profits by 500%. Continuing, if you raise your conversion rate from 1% to 3% means your profits have risen by 1000%.
So now if you want $1000/month in profits, you only need 910 visitors, instead of 10,000 which is slightly easier to obtain as you can imagine.
Raising your conversion rate has to be a focus for any web site and the only way to achieve an increase in conversion rate is to offer your customers exactly (or as near to it as possible) what they are looking for when they arrive at your web site. The majority of the work is done for you because these targeted visitors are already interested in the subject of your web site you just have to lcok them into your site using your layout, sales copy, prices etc.
It is hard to say 'do this and do that' and offer a definitive guide to raising your conversion rate because different products offer different opportunities to lock customers in but one of the key factors is to make sure your site is easy to navigate and has good search function support so that your visitors can easily find what they are looking for. The easier customers can find the product, and complimentary products, the greater the chance that they are likely to buy.
Don't put barriers in place to prevent your customers from buying, the easiest way to do this is to conduct usability analysis by communicating directly with your site users and use the feedback to optimise your site for ease of use. This also has the added advantage because it not only allows you to learn about how the users view your site but it can also build loyalty and awareness from customers because you are seen to be caring for the customer.
The best approach to converting visitors into customers is to provide them with all the information they need to make an informed decision which in turn will encourage them to act (ie. buy), with this in mind think about where you are going to send your visitors when they click on a specific link to your web site. It has to be structured so as to maintain the conversion process, for example, when you are 'touting for traffic' you may be advertising a specific discount that is available via your site and when the visitor clicks on the relevant link they should be taken to a specific page that will educate them about the discount and entice them to sign up for your service. If the link takes people to a page without the information they need odds are you'll lose the customer.
Mike - webmaster at Online Auction Trader
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