The primary goal of an ecommerce website is to sell products to consumers. The conversion rate for an ecommerce website in a particular period is the total number of orders the site receives divided by the number of visitors to the site. If a website gets 10,000 visitors in one month, and of those only 120 visitors place an order, the conversion rate for that site is 1.2%:
| Conversion rate = 120 / 10,000 = 1.2% |
Of course, a conversion on an ecommerce website does not happen in one step; it is a multistep process. Let’s say you want to buy a copy of The Tipping Point, so you go online and search for the book in Google. Figure 1-7 shows the many search results for “The Tipping Point.” Data tells us that the first listing among organic results gets the highest number of clicks on a search results page, which is usually around 45%. Figure 1-8 shows “The Tipping Point” product page at Amazon.com, which you would land on if you click on the first search result.
Although product pages on an ecommerce website can have different goals, the main goal is to get visitors to click on the “add to cart” button. Of course, clicking on this button does not translate into a sale. Website visitors have many options after clicking on it. For example, they might get a phone call and forget about purchasing The Tipping Point. They might become distracted and navigate to other products. Or they might want the book enough to actually click on the “checkout” button to start the order. Of course, they still have to go through the different steps of the checkout process, with each step getting them closer to the final goal of placing an order. Only when a visitor clicks on the “Place your order” button in Figure 1-9, the final step in the Amazon.com checkout process, has Amazon.com secured an order and a conversion.
Figures Figure 1-7 through Figure 1-9 show a typical “order funnel” for many ecommerce web-sites. This funnel might start with visitors arriving at different pages (landing pages) in the website. Although an ecommerce website may or may not have full control over where a visitor lands initially on the site, it does have control over the design of the order funnel, such as the checkout process. Each step toward the final order page is a micro conversion. Small victories build toward the final, ultimate victory: a visitor placing an order, or a macro conversion. A macro conversion will only take place if the ecommerce store is able to convert the visitor at each micro conversion.
An online order funnel is very similar to a physical sales funnel. Think of a company that is looking to purchase an expensive piece of software. Evaluating the different software packages is similar to looking at a category page with different products listed in it. Narrowing the options to a particular software package mirrors looking at the product pages in an ecommerce store. Then there is the physical-world “checkout,” finally executing the agreement. The only time you reach a deal is when each step in the process successfully leads to the next step.