In the world of corporate websites, conversion is the only word that truly matters. A conversion is the seemingly simple act of attracting someone to your website and then having them perform an action which allows you to regard them as ‘converted’, or more simply, interested.
In online retail conversions are obvious – the visitor needs to buy something. But a conversion can be any path the website owner wants a visitor to take. For insurance sites, it might be taking out a policy, and for automotive sites it might be booking a test drive. For this website, we want blog visitors like you to be exploring our services. Hint hint.
Regardless of your metric, a conversion is a very special thing. I’ve seen the word used in corporate boardrooms with the same awe and thoughtful silence that I’ve seen my sister, a mother of 3 children under 2, use the word ‘sleep’.
Conversion rates for successful websites are generally between 0.20% and 2%, depending on the type of site and the classification of a conversion. An organisation can devote considerable time and resources into pushing their conversion rate as high as possible. Efforts to increase conversions will generally focus on marketing and design. A nicer looking website will convert more, just as a well-placed Google advertisement will.
52% of online shoppers are likely to abandon their purchase if made to wait more than 2 seconds for a page to load
But there is a third area that is not often considered for it’s impact on conversions. That is, of course, the area of hosting. Hosting might seem out of place in a discussion about conversions but it’s impact is far greater than many realise.
One of the most effective hosting techniques for increasing conversions is to improve page load times. Research performed by Forrester in 2009 found that 52% of online shoppers are likely to abandon their purchase if made to wait more than 2 seconds for a page to load. This report was commissioned by Akamai, the world’s leading Content Delivery Network provider, and BrightHost is a hosting company which uses Akamai’s services. So it’s not surprising that we might pull that statistic out in this discussion.
Conversions, Performance, and Revenue
A business can succeed or fail based on one-tenth of a percent. It might not seem like a big number but it’s impact on a medium-sized online store can be remarkable. Allow me to use a fictional online retailer to demonstrate my point. For this exercise, let’s consider an e-commerce supplier with the following performance:
- Visits Per Month: 1,000,000
- Average Sale Value: $100.00
- Conversion Rate: 0.50%
- Availability: 99.50%
In a year, our e-commerce site will have 12,000,000 visits. At a conversion rate of 0.50%, that’s 60,000 sales. At a value of $100 per sale, we’ve turned over $6,000,000 for the year. Not bad!
Now here’s the kicker. If we were able to increase our conversion rate by just that one-tenth of a percent we would increase our yearly revenue by $120,000! We could also increase our profits by encouraging visitors to spend more time on the site, increasing up the average cost per sale.
| Conversion Rate | Total Revenue |
|---|---|
| 12 mil. Visits, $100 Average Sale | |
| 0.50% | $600,000 |
| 0.55% | $660,000 |
| 0.60% | $720,000 |
| 0.65% | $780,000 |
| 0.70% | $840,000 |
Both of these results can be achieved through better page performance. This is no different to making a bricks-and-mortar retail client wait 1 minute longer in a queue to be served. The faster you can interact with your visitors the more likely they are to buy from you.
Giving Away Sales
What happens when your site doesn’t work, or pages take too long to load? If we’re making $6,000,000 for the year, that’s an average hourly revenue of $685.
poor performance and downtime will not just cost you sales, it will give them to your competitors
If our website works 99.5% of the time, we can expect to see 44 hours in the year where it doesn’t work! That seemingly irrelevant 0.50% downtime has just cost us over $30,000!
That figure gets worse as we work to increase conversions and attract more visitors. But that’s not the end of it, there is the immediate loss of a sale, sure, but downtime and poor performance does much, much more damage…
- If you were advertising, you’ve paid for a click that had no chance of success
- New shoppers will hit Back in their browser, and click on the next ad or search result.
- Returning shoppers may feel frustrated, and less loyal to your brand
What I find most disturbing about this prospect is that poor performance and downtime will not just cost you sales, it will give them to your competitors! Everyone who wants to buy your well marketed and well presented product will feel driven to the competitors better performing website.