Merchant Secrets for Driving Customer Conversion

I recently ran across an article that takes a look at conversion rates for retailers. There are some interesting metrics and challenges in reporting a standard for of a "Conversion". This article is specific to retail on the web, but it points to a general trend for any business that sells something from a website. The article reads: ( Read Article Merchant Secrets for Driving Conversion - Part 1)

The concept of "conversion" is one that online merchants live and die by. An online store's conversion rate, which is the percentage of site visitors who make a purchase, is the figure that determines that store's bottom line.

But for all the focus on conversion rates, many merchants note that the concept is ill defined, and in truth, it's not always an accurate predictor of an e-tailer's success.

E-tailers know that increasing conversion rate is absolutely critical. As Freedman found from her research, merchants are constantly benchmarking their conversion rates, and comparing their rate against internal statistics and those of competitors.

"Conversion has become one of the most important indicators among merchants, and we don't see any change in this analysis methodology or the enthusiasm surrounding the topic," says Lauren Freedman, president of the Chicago-based consultants the e-tailing group.

Her research indicates that a greater percentage of merchants are now focused on conversion rate. In a survey Freedman conducted with responses from more than 250 merchants, 20 percent of merchants in 2004 said they didn't know their rate; that number fell to 8 percent this year.

Based on Freedman's merchant survey, the most common conversion rate falls in the two to three percent range. But the rate varies enormously site by site, including those few fortunate merchants enjoying a higher than 10 percent rate.

Conversion rates are trending generally higher in 2005 than in 2004, with 41 percent of merchants this year reporting a "somewhat higher" rate, and 14 percent reporting a "significantly higher" rate. However, some 23 percent of merchants noted that their rate was "about the same" and 11 percent said it was "somewhat lower."

The article goes on to give tips on how to increase conversion rates that we all know like integrating a search engine, clean and crisp text, right product and right price, anything for free, and designing good navigation.

What this article fails to mention is that interactive communication channels such as chat provide steep increases in conversion rates. Most of the time analytics from customer drop off will only tell you where the problem is in the past. There will always be a lag between understanding the reasons for the numbers and doing something about them. By that time, those customers are long gone and it would be very hard to get them to come back.

Interactive channels such as chat combined with business rules intelligence allow an instantaneous communication and action based on the here and now. Customers can be engaged now and issues can be resolved at the most important time- when the customer is ready to buy.