Conversion rate is one of the metrics used to determine whether or not your business is doing well. However, there will be times when this ratio sharply fluctuates up or down, and you will need to analyze and determine the cause of the problem in order to improve.
In this article, we will demonstrate how to approach, define, and analyze a problem using a data-driven mindset. At the same time, you will need to rely on the conversion funnel to determine which conversion steps on your store are having problems, analyze the specific causes, and make decisions for improvement and change.
In this article
A. Data-driven mindset in conversion rate analysis
B. Overview of conversion funnel
A. Data-driven mindset in conversion rate analysis
When confronted with a difficult problem about conversion rate analysis, the first thing you need is the proper mindset and approach. Having a data-driven mindset will be the most standard and quick way to solve this problem.
The process of applying data-driven mindset into conversion rate analysis consists of 6 following steps:
The most important steps in the process are analyzing and hypothesizing about the factors that influence conversion rates. Your analysis should include not only the website but also factors such as traffic source, traffic, UI and UX optimization, customer group, and so on.
B. Overview of conversion funnel
1. Store's conversion funnel and influential factors
The conversion funnel includes the following steps: Traffic (Ads) > View product > Add to cart > Checkout initiated > Complete checkout.
If you find the conversion rate of your store is lower than expected, let's start analyzing the factors that influence the conversion step in order to come up with a suitable improvement solution. To begin, compare your store's conversion rate to the standard rate to determine which step has the lowest metric and how much lower it is compared to the standards. Refer to the table below for factors that influence each stage of the online buying process:
2. The standard conversion rate of each buying step (for reference)
Below is the standard conversion rate data for each step for your reference and comparison with store conversion rates. This standard rate is determined based on the general data report across ShopBase system.
| Steps in the buying process | Standard rate (for reference) |
|---|---|
| View ads > View product | From 1.5% and up |
| View product > Add to cart | From 8%-10% and up |
| Add to cart > Checkout initiated | From 60% and up |
| Checkout initiated > Complete checkout | From 30% and up |
3. How to conduct an analysis using the ShopBase Analytic report
First, you should compare your store's conversion rate to the standard rate to determine which step has the lowest metric and how much lower it is compared to the standards. This data will be used to find cause and start analyzing.
After identifying the main factors/causes that are likely to reduce conversion rates, you need to consider options to handle and optimize each related step:
Aside from optimizing your storefront, you should conduct A/B testing to determine the best method and products that can bring the most benefits to your store.