A brilliant marketing campaign can help drive clicks and traffic, but getting shoppers to your site is only half the battle. The other half is getting them to convert when they land on your site. That’s where tracking your conversion rate, which measures how many shoppers that visit your site make a purchase, comes into play.
Turning visits into conversions is the goal that helps fuel your path towards growth, and can have a positive ripple effect across your business. Almost everything from marketing costs to customer experience and overall revenue is tied to your conversion rate.
By tracking your conversion rate over time, you gain the data you need to evaluate your performance, establish category-appropriate benchmarks, and set realistic optimization goals.
There are many expert-approved strategies for increasing your conversion rate, which we’ll explore further, but for greater context, let’s start by finding out how moving the needle on conversions can affect the big picture and your decision making.
ROAS, customer acquisition, and conversion rate explained
In ecommerce, two of the most important metrics to track are customer acquisition cost (CAC), or the amount you spend on average to acquire a new customer, and return on ad spend (ROAS), or the revenue generated by a marketing campaign relative to the amount spent on that campaign. Your conversion rate directly influences both your CAC and ROAS.
“Let’s say I spend $1 in marketing to attract a shopper to my site, and my conversion rate is 10%,” explains Buy with Prime Senior Economist Aaron Bodoh-Creed. “That means to acquire one new customer, I have to get ten shoppers to my site. Because each of those ten shoppers costs $1, my customer acquisition cost is $10. If my conversion rate is 5% instead of 10%, then I need to get 20 shoppers landing on my site at a cost of $1 each, which means my customer acquisition cost doubles to $20.”
But your customer acquisition cost doesn’t provide the whole picture. “Although it can be harder to measure, your ROAS tells you what you want to know: how much did that customer spend versus the cost of acquisition,” Aaron says.
There’s a symbiotic relationship between conversion rate and ROAS – as one increases, so does the other. “So there’s this knock on effect where your marketing spend becomes more valuable as your conversion rate increases,” he adds. “While it might have made sense to spend $10,000 a month on marketing, maybe now it makes sense to spend $15,000 a month just to drive people to your site.”
From an economic perspective, another interesting thing also happens. “You spend more money to advertise on the most profitable high-ROAS channels, but over time, your ROAS will inevitably drop because those channels have to start showing your ads to less and less likely customers,” Aaron explains. “You wind up getting the same bang for the buck on channels that initially had lower ROAS, and eventually the value you can squeeze from each incremental dollar spent on any channel equalizes. That’s why investing in conversion rate optimization pays off so much in the long term.”
Track and optimize conversion rates
There’s only so much that looking at your conversion rate in isolation can tell you. If you take into account CAC and ROAS and add other metrics, such as repeat purchases over time and average order value (AOV), you start to paint a holistic picture of which conversions have the most lasting impact on revenue.
For instance, new shoppers are important, but turning them into high-value customers who come back again and again to spend more money on your site is one of the keys to long-term growth. According to McKinsey, companies tend to be more profitable when they pay attention to building customer satisfaction and customer lifetime value (CLV) in tandem with driving individual sales. That’s why tracking the percentage of your returning customers can help to determine if your buying experience encourages shoppers to come back.
When you use your AOV, CLV, and returning customer data to inform your conversion tracking and conversion rate optimization, you get a powerful engine for tracking growth.
Analyze conversion tracking
By employing marketing attribution models and tools to track conversions across sales channels, you can determine whether specific ads within a campaign are effective, and where you should allocate more resources. Conversion tracking can help you understand which factors influence ROAS and CAC.
With conversion tracking data, you can tweak your marketing strategies to target look-alike audiences that make more repeat purchases with a higher average order value, and potentially greater lifetime value—making each dollar you spend on marketing go further.
You can also use conversion tracking to help you determine if lower conversion rates can be attributed to friction in your checkout flow or user experience, as opposed to marketing that’s sending low-quality traffic to your site or resulting in high bounce rates. If you’re losing too many high-intent shoppers after they land on your site, it’s usually a sign that you need to make changes to your customer experience. Check out this Baymard report on ways to optimize your site.
Analyze conversion rate optimization
Conversion rates are closely tied to customer experience, and a good customer experience often leads to a higher repurchase rate, which in turn boosts customer lifetime value. Remember, the better your conversion rate, the higher your ROAS and lower your CAC.
Conversion rate optimization is the incremental process of making improvements to your branding, website design, product pages, and checkout flow to increase conversions over time. Once you’ve established a baseline for your conversion rate, you can experiment with layout and UX changes to see how they affect your results.
Along with focusing on trust-building assets like high-quality product images and detailed product descriptions, there are best practices you can follow for conversion rate optimization. Providing easy checkout with fast and free shipping is also one of the most well-established ways to reduce checkout abandonment.
Increase shopper conversion with Buy with Prime
Buy with Prime can help increase conversion rates
For merchants who struggle to acquire and keep customers, Buy with Prime is an all-in-one solution—one where conversion rate optimization, conversion tracking, and customer experience converge.
According to a survey of more than 30,000 online shoppers, 70% of global consumers want a shopping experience with the same kinds of benefits and services as Amazon Prime. Offering Buy with Prime has been shown to increase conversions by an average of 25% while at the same time delivering a better customer experience, which allows you to capture more repeat and high-value customers. Buy with Prime can help increase conversion rates in these five ways:
1. Seamless checkout
Roughly 71% of shopping carts are abandoned. When you require shoppers to register, create new accounts, fill out too many form fields or credit card information—or don’t offer their preferred payment method, they hesitate. Baymard Institute found that brands can increase their conversion rate 35.26% simply by providing a better checkout design.
Buy with Prime offers shoppers a trusted, familiar checkout flow in just a few simple clicks, with no accounts to create, address information to fill out, or payment details to fumble for. When Prime members see the Buy with Prime badge on your ecommerce site, they know they can expect a quick and easy checkout similar to what they get on Amazon.com. A seamless checkout can help reduce up to 65% of the buyer friction that leads to abandoned carts.
2. Conversion-boosting social proof
When you offer Buy with Prime on eligible products, you can display Reviews from Amazon directly on your ecommerce site product detail pages, a proven means for building customer confidence and brand credibility.
Merchants who add Reviews from Amazon to their site have experienced a more than 38% average increase in shopper conversions across both Buy with Prime and non-Buy with Prime checkouts. They have also experienced a 34% average increase in revenue per visitor.*
3. Powerful conversion tracking
Conversion tracking is critical to determining ROAS and CAC. Buy with Prime’s conversion tracking tools allow you to measure, monitor, and understand the conversion data attributed to your Meta and Google ad campaigns. And features like advanced matching also help boost attribution rates by sharing additional customer information.
Together with conversion tracking, Buy with Prime also gives merchants control of your customer data, allowing you to nurture lasting customer relationships, dial in on conversion rates for new and return customers, engage cohorts across channels, and maximize lookalike audiences.
4. Performance impact analysis with A/B testing
Effective conversion rate optimization is directly linked to experimentation and iteration. A/B testing is the tool that puts your data and benchmarks to use so you can identify which changes to your user experience design have the biggest impact.
A/B testing gives you the information that you need to make informed decisions about what messaging, images, colors, fonts, promotions, CTA placements, layouts, feature launches, and checkout flows work best to turn hard-won site visitors into customers. Use a performance impact analysis from Buy with Prime, including A/B testing, to inform key decisions and uncover critical insights about your Buy with Prime products and your ecommerce site.
5. Fast, free delivery, easy returns, and better customer service
Nearly half of surveyed online shoppers say high additional costs associated with shipping, taxes, or fees keep them from placing an order, and 22% say they abandoned checkout because of slow delivery times. Similarly, 77% of customers abandoned purchases because they didn’t like the delivery options provided.
Unexpected shipping fees and long delivery times are major friction points for shoppers that can drive down conversion rates. And merchants who struggle to get customers to come back may have problems with shipping speed, customer service, and returns.
Buy with Prime effectively solves both problems at once. Buy with Prime purchases come with Prime free 1-2 day shipping, transparent delivery estimates and tracking, and free returns on eligible items. Buy with Prime also allows merchants to provide best-in-class customer service, with all purchases protected by the Amazon Pay A-to-z Guarantee.
All Buy with Prime orders are fulfilled using Amazon Multi-Channel Fulfillment (MCF), with a “click-to-door speed” of 1.9 days—more than 50% faster than other retailers. MCF also boasts a 97% on-time delivery rate and 99.98% undamaged package delivery rate.** It all adds up to more conversions—and more happy customer who have the potential to become repeat customers.
“Buy with Prime offers an opportunity to increase conversions while building loyalty and lifetime value—because high-value Prime members are already deeply engaged with Prime benefits,” Aaron says. “We’ve found when you increase delivery speeds in general, you get a pretty significant increase in conversion rate. And people care even more about free delivery.”
He concludes, “It’s really hard for ecommerce sites to move the needle on conversion rates: even 2% is a big deal. When you offer Buy with Prime, your marketing is going to become more efficient—each individual conversion is going to have more value, so merchants can gain a particularly large advantage from having Buy with Prime on their site.”
Learn more about how Buy with Prime can help boost shopper conversion on your site.
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*This data is from a sample of 8 Buy with Prime merchants with average monthly site traffic between 10K and 1M and compares the change in revenue per visitor who placed an order when Reviews from Amazon was present on a product page versus when it was not.
**Based on Amazon Multi-Channel Fulfillment (MCF) internal data and MCF claims data for small- and midsize businesses.