One of the challenges of any business is to find ways of increasing the conversion rate whether that’s the percentage of website visitors who go on to buy or the percentage of people who come into a shop who then buy. The problem is that different businesses will find that different approaches work for their customers.
Here are three possibilities for increasing conversion:
Offer A Discount
Sometimes a simple discount is the most effective way of increasing conversion. It’s essential that you know how much your product/service costs you before you can eat into your profit margin with a discount. The obvious question is then “how much discount?”. This depends on the market: some will respond to a 5-10% reduction whereas in other markets nothing less than 50% will provoke a reaction.
Offer Free Delivery
Some markets will respond well to free delivery – particularly if delivery would normally be expensive (eg laptop delivery). However, my experience to date has been that this is the least effective approach.
Offer A Free Extra
In some cases, giving extra above and beyond the standard product is effective. For example, “buy this and get something else in addition” or “buy one get one free”.
There are two key things you must do:
- Work out how much the cost of the promotion will eat into the profit per unit
- Test, test, test, test
The only way you can find out which form of promotion works for your customers is to test. As an example, with our web shop MakingYourOwnCandles.co.uk we have tested all three.
We found that Free Delivery was ineffective, even though our product is quite heavy. Offering a percentage reduction is effective (20% in our case) and increased sales, gross and net profit significantly. However, for our customers, giving away something free was the most attractive promotion. In our case, we offered a free Refill kit which effectively doubled the number of candles our customers could make. This increased sales by 35% in a month during which we’d normally expect a decline for seasonal reasons. The conversion rate increased by nearly 50%.
The point is that we only found out by testing. One of the biggest challenges in online business- especially a new business, is in establishing what it is that turns your customers on. Remember that customers buy based on value rather than price: your job is to increase value until it reaches a tipping point that improves your conversion rate whilst retaining a healthy profit margin.
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