Your Site's Bounce Rate, Why Important?

Summary: Improving your site's conversion rate largely starts at lowering your bounce rate. Why? Because every customer that bounces from your website is a lost opportunity to explain your value proposition and give your sales pitch.

What should you do if you have a high bounce rate? Avinash Kaushik, of Google's Conversion University, provides a great video explaining why a successful website must have a low bounce rate. While you watch the video, try to pick out reasons a high bounce rate is so detrimental.

Avinash brings out that a bounce rate between 40 - 60% is considered good. You'll never get everyone to stay on your website; nevertheless, if your bounce rate is higher than 60% you should begin by asking, Is there a problem with your website or is there a problem with your traffic sources?

A high bounce rate can occur because your traffic sources are low quality. If so, try to look for better sources of traffic. For example, if you're spending money for highly bouncing traffic through banner ads or pay-per-click advertising, cut back on this spending. You might try marketing strategies such as article writing and direct-mail instead.

If the problem is your website, then you need to look at your top landing pages and see if you can understand what the visitor is looking for by seeing how he got to that landing page. Did he arrive at the landing page through a Google search? If so, look at the keywords being used to hit that landing page and make sure the landing page addresses the needs of someone searching with those keywords. Is the visitor hitting your website from a business directory such as Yahoo.com? Make sure the landing page from that directory category gives the information you would expect such a visitor to want.

Improving your bounce rate will take time and it may take many design iterations before you finally find a solution that gives you an acceptable bounce rate. However, improving your bounce rate is worth the effort. A high bounce rate is a sure fire way to low website sales. A low bounce rate drives greater sales and means your website is making a more favorable impression with visitors.

What is Web Strategy and Why is it Important? 10 Questions to Help Explain

Do you think of your customers as one big group or do you categorize them?

Summary: I have watched friends build a website to generate income with very little planning; they have an idea, and the next day they're building the website. But I've watched those same friends start a business and immediately start with a business plan before doing anything else. Why the difference? It seems that planning is an expected part of successful business strategy. Why isn't planning considered equally important for a website? In this article we'll discuss what web strategy is, questions that should be answered as part of a successful website strategy, and we'll talk about why such a strategy is important.

So what is web strategy?

I'll start with a rather pithy definition: Web strategy is about looking at and anticipating root causes of online success or failure and coming up with solutions to address those root causes instead of superficial solutions.

Perhaps that still doesn't make sense; let's try to explain it another way?

Put simply, web strategy is like a business plan, but it is the plan for your website. In it you outline a road map for your website. You outline obstacles and challenges you expect to face, your plan to overcome those obstacles, and goals that will determine whether you've been successful.

Do you really need a web strategy?

You may ask, 'Why is planning important?' An ancient proverb states, "The plans of the diligent one surely make for advantage, but everyone that is hasty surely heads for want." Good planning ultimately leads to business advantages. Similarly, good website planning ultimately leads to advantages for your website versus competing websites.

But what types of questions are answered as a part of a web strategy?

Let me provide some examples of web strategy questions and see if this helps you to understand what web strategy is about:

1. What are the categories of customers who use your website? Thinking of all your customers in one big group is an example of having no website strategy because customers are not all the same. For example, a website selling books might group their customers into categories like as in the chart at the top of this article.
   
2. Does your website address the needs of each category of customer in a satisfactory way? Many website owners think primarily about their own needs, for instance getting a sale, and thus the website reflects this. Just as we hate salesman that are only out for their commission people hate websites that only sell and otherwise aren't helpful at sincerely answering questions or concerns the potential buyer might have.
   
3. What are the top 10 questions customers ask when they reach your website? How do you answer each of those top 10 questions? Websites that fail to answer the most important customer questions won't get sales because it is guaranteed you have a competitor on the internet that does answer his questions. Since this is the case, why would he buy from your website?
   
4. On each page of your website, what is the desired action you want the user to take on that page? If you don't know this, how can you tell your customer what to do? If you can't tell your customer what to do, how will he know what to do next? If he doesn't know what to do next, he will just leave your website.
   
5. What is considered a successful visit on your website? What are you doing to ensure that each visit to your website is successful? Are you trying to get a phone call, a newsletter subscription, a purchase? The answer to this question should greatly affect your entire website's layout and design.
   
6. What is the average conversion rate for your industry and what is the target conversion rate for your website? If you don't know your industry conversion rate, then how can you set a target for your own conversion rate? You can't just pull these numbers out of the air. If this data is not available, you need some other logical way of determining a reasonable conversion rate.
   
7. Besides relying on search engines, directories, and advertising, what is your six month plan for increasing the number of visitors to your website? Millions of websites are competing to get on Google Search, Yahoo Directory, etc. If you do the same thing everyone else is doing, you're going to get the same results. The average website fails. So what will you do differently than those failing websites did?
   
8. What are the goals for your website in the next 1 month, 3 months, 6 months, and 1 year? Your goals should guide your activity every day. Without goals you are like a runner running without a destination. How will he know which direction to take his next step?
   
9. What lessons have you learned from your competitors in the last 6 months and how do you plan to apply those lessons in the next 6 months? Your competitors are trying thousands of different things to find success. The smart entrepreneur learns from his competitors. Sam Walton, the founder of Walmart and Sam's Club, started Sam's Club after he visited Sol Price's Price Club (now named Costco). He way always learning. You should be doing the same by using your competitor's websites regularly.
   
10. What reason does a visitor have to tell others about your website? The best marketing is word-of-mouth. Is there anything about your website that a customer would have reason to tell his friends and colleagues about? To get an honest answer, you may need to ask someone else for their opinion. This is probably the most important question you can ask.
    

I could continue to list questions, but hopefully you get the point. Web strategy is about formulating answers to questions like the above. To put it another way, a successful web strategy can be a formal document, just like a business plan, that outlines your plan for the growth and development of your website and sets clear goals that will allow you to determine whether you were successful or not.

Your Plan is Your Map

If you don't have a web strategy, then you're like a traveler on a road trip without a map and without a route. You might stumble upon your destination, but your journey is going to be long and difficult full of wrong turns and dead ends. However, by developing a web strategy you're going to be like the traveler that has both a map, and a well planned route. You will reach your destination, and you will reach it quickly and you will enjoy the scenery along the way.

Is your website competitive? Let's Ask Google’s New Benchmarking Tool

A screenshot from Google's new Benchmarking service.

Summary: Google has launched a new benchmarking service to enable business owners and executives to compare their website's statistics against the industry average. This tool can help you to gain insight into how your website stacks up against your competitor. In this article we will discuss the tool in more detail and analyze why it is so valuable.

Have you ever been sitting, looking at your website statistics, trying your best to analyze the data, but just feeling like you have no idea whether your site’s statistics are good or bad? You keep wondering, ‘how do I stack up against my competition?’ Unfortunately, you can’t just call your competitors every week and ask to swap data. But without knowing how your competitors are doing, you feel like your site’s numbers give you little real insight as to how your company is doing.

Fortunately, Google has helped to lift the fog. Google Analytics has released a new benchmarking tool to enable companies to easily compare their website’s statistics against industry averages. Amazingly, this free service can help you see if your website is doing well versus websites in your industry, doing poorly, or just performing at an average level. Google’s Analytics Benchmarking tool can give you insights into your own success and failure and those of your competitors.

But what is benchmarking and why do business owners and executives need a benchmarking tool to maintain a successful website? It is beneficial to examine the answer to this question.

You may know your website’s statistics (e.g. number of visitors, pageviews, etc.), but is that enough to know whether or not your website is performing well? No. Your website’s level of success, whether good or bad, can only be determined by comparing your site against competitors. This process is called benchmarking. Let me illustrate why benchmarking is necessary with an example.

In college, students are graded on a curve. Students who are far above average receive the A grade; students that are below average receive the C, D, or F; average gets you a B. It is impossible to determine your grade from your exam score without also knowing the average.

For example, while in college, I once scored 45 out of 100 on a final exam. When I saw my score I was in shock. I was almost certain I had failed. But did I fail the test? No. In fact, I aced it. It turned out the average on the test was a 25 so my 45 was an A+. Only by knowing the average could I accurately judge my success on that test.

Measuring website performance is the same. If 10% of visitors to your website end up purchasing, is that good or bad? It depends. If your competitors are getting 30% of visitors to buy, then you should be asking, ‘what am I doing wrong?’ If this were college, you’d be receiving the F. However, if your competitors are only getting 2% of visitors to buy versus your 10%, then your company is performing at an excellent level! You deserve the A+! Again, site statistics must be benchmarked against your competitors to accurately judge your success. On their own, statistics provide limited insight.

So undoubtedly you see the importance of benchmarking your website’s performance against the industry average. Google’s new Analytics Benchmarking service is an excellent tool that now makes benchmarking easier than ever. I urge you to strongly consider the use of this tool, or any similar benchmarking tool you are aware of. As a result of benchmarking your website, you will know with confidence whether your website is great, without need of improvement, or uncompetitive with urgent need of an upgrade.

Notes

• To use the Google Analytics Benchmarking service, your website must be using Google analytics.
• Google Analytics is a free service.
• You can sign up for Google Analytics at: http://www.google.com/analytics/indexu.html

[Video] Site Review: Quality Inventory Provides Greater Sales than Elegant Site Design

Summary: What can we learn from VacationRentals.com, the #2 vacation rental website on the internet? Well, first, simple websites often outperform slick elegant designer websites. Second, having quality inventory is far more important than having the best looking website. Focus on beating your competition by having high quality products and services and don't worry about having the best looking website in your industry.

How can I analyze the reasons for a low conversion rate?

Sometimes in-depth research is required to generate an accurate comparison between your website and your competitors'.

Summary: The past two articles have emphasized the importance of product mix in determining website success. How can you figure out if a low conversion rate is due to a poor product mix versus a bad website? This question will be discussed in this article.

How can you identify the reason for a low conversion rate? As I mentioned in a previous article stressing the importance of analytics, you can't measure yourself against yourself. The best way to measure your success and identify methods of improvement is to benchmark your website against your competitors.

What type of benchmarking do you need to do?

Since this article is discussing website conversion rate, the answer is to compare your conversion rate to the conversion rate of your competitors. For example, do you sell Caterpillar tractors? What is your conversion rate on those tractors? What is your average competitor's conversion rate? Even better, what is your best competitor's conversion rate?

If your conversion rate on a product is 8%, is that good or bad? Well, it always depends on the average for your industry. If the average conversion rate for that product, in your industry, is 3%, then you're doing great. If the average conversion rate for that product, in your industry, is 15%, then you have some serious catching up to do.

What conclusion should the data help you reach? Here are two conclusions:

1. If your conversion rate is below the competitor average, then you probably need to improve your website.
2. If your conversion rate is low, but at or above the competitor average, then improving your website is unlikely to help generate a higher conversion rate. Perhaps you need to sell a different product. You're already at or above the industry average. Unfortunately, this product doesn't look like it sells well in general.

Unfortunately, figuring out the conversion rate for your competitors can be difficult. It may require some in-depth research. Each company will likely have to find industry specific resources in order to do their own analysis.

(Now that we are on the subject, I am interested, myself, in finding this data. I will do my best to dig around and see if there is a conversion rate research database out there. However, I doubt there is one. Nevertheless, if you are aware of one, I would appreciate your notifying me about it.)

In conclusion, make sure that you are benchmarking your conversion rate against your competitors and not against yourself. Benchmarking how you rank in your industry is the only objective way to identify whether a conversion rate is low because the product you're selling just doesn't sell well or if you have a problem with your website and marketing approach. By doing this benchmarking you allow your business to make much more intelligent decisions in product selection and web strategy.

Does website design matter? Re-emphasized lessons from The Popcorn Factory

There is nothing outstanding about The Popcorn Factory's website. The key is their product selection.

Summary: The other day I wrote an article that analyzed the key reasons for The Popcorn Factory's astounding 29.5% conversion rate in December of 2007. To translate, this conversion rate means that nearly one out of every three visitors to The Popcorn Factory's website actually bought something! Today, I want to re-emphasize those lessons in a more concise manner.

After looking at the success of The Popcorn Factory, and the relatively simple website they use to generate this success, the natural question is, "does website design really matter?" The answer is No...to an extent. How can we show this?

First, from the standpoint of aesthetic beauty, The Popcorn Factory website is not one of the more attractive websites out there. It's design is very plain, and really not very attractive compared to the really good sites. There are no pictures of beautiful people eating popcorn; there are no animated videos; the color scheme is a rather bland pastel purple, dull pink, and red.

Secondly, there are few calls to action and no empty marketing slogans like, 'Putting quality first.' or, 'Perfectly popped popcorn every time.' They do have an Easter sale currently on the website, but it doesn't scream at you with flashing lights or multiple exclamation points!!!!

Put simply, the website does exactly what its supposed to. It sells popcorn. No more. No less. And sell popcorn it does, very well in fact.

As mentioned, the key lesson from The Popcorn Factory is the importance of choosing products that are already primed for success. Don't choose a product that will require you fight an uphill battle just to get customers interested in it.

Warren Buffet has been known to say, 'Give me a great [profitable] industry and poor management any day, over great management and a poor [unprofitable] industry.' What did he mean? He meant that a profitable industry allows even the worst managers to have a measure of success. Whereas, an unprofitable industry will make even the best managers look like perennial failures.

The same applies to websites. As an owner, it is better to have a poor website selling a product everybody wants, than to have a great website selling a product nobody wants. The website selling the in-demand product will win every time.

Does this mean that anything we can say about website design then is invalid? Absolutely not. If the Popcorn Factory improved their website, no doubt they would also improve sales. Warren Buffet would not turn down great managers in a great industry. That's a one, two punch. Similarly, no company would be wise to turn down having a great website, just because they're already selling a great product.

What's the conclusion? Absolutely, review your product selection, and make sure you're selling products that the customer already needs or strongly desires. Once you've reviewed your product selection once, review it again. Keep doing it until you know your product selection is excellent. Then, once you've done this, start investing in improving your website to maximize your chance of getting the sale. Don't do this process in reverse.

Review your products, then improve your website. If you do these two things, in this order, you put yourself in position to maximize sales growth and profits.

What gave The Popcorn Factory the highest conversion rate on the internet?

The Popcorn Factory's basic homepage doesn't explain their high conversion rate.

Summary: In December of 2007 the Popcorn Factory had the highest conversion rate, 29.50%, of any major website (MarketingCharts.com, 2007). For most retail websites, a conversion rate of 10% is considered excellent. Anything below that is considered average (Eisenberg, February 3rd, 2008). What can we learn from The Popcorn Factory to help us improve our own conversion rates? In this article we will answer that question by looking at one very important reason behind their success.

No doubt there are many reasons that The Popcorn Factory has one of the highest conversion rates online. However, as I researched this article, one reason kept coming up, product selection. Not all products sell well online (Warren, 2000). The Popcorn Factory has done a good job of identifying what sells well online and investing their resources in those products. They have done this in the following ways:

1. The Popcorn Factory sells a product the customer already wants to buy.
2. Their online product mix is specific to online tastes and is different than their offline product mix.
3. Their products are well suited to being delivered by mail.

Let’s discuss each of these points one by one.

The Popcorn Factory sells a product the customer already wants to buy. If you manufacture a product, improving on this point may be difficult for you. However, if you are an online retailer retailing other vendor’s wares, then this is entirely within your control. The simplest way to increase your conversion rate online is to start with great products. This quote bears that out:

“People's motivations trump any great or poor [website] design. If people have made up their mind (persuaded themselves), that they want to buy flowers or popcorn from the particular retailer then they'll work through almost any poor shopping process…” (Eisenberg, January 29th, 2008)

How can you improve your product mix? Put extra effort into the product selection process. Read product reviews, see what people are talking about. Are there any trends you can take advantage of? Product strategy is not my area of expertise. Nevertheless, the key point I want you to take from this article is that bad product selection will trump good website design. So don’t invest more money in improving your website or increasing your online marketing if you don’t already have products that the customer desires. After all, we can put lipstick on a pig, but it’s still a pig. A better website might just end up being a better color of lipstick for a litter of ugly piglet products.

That brings us to the next point.

The Popcorn Factory’s online product mix is specific to online tastes. The Popcorn Factory has a print catalog as well as their website. Cheryl Zatz (the Vice President of Marketing for The Popcorn Factory as of at least October 2006) made clear in a ComputerWorld.com case study that, “the Web site doesn't simply replicate the paper catalogue: the number of products is limited, to avoid creating navigation problems for users, but the site does include a number of exclusive lines.” (Warren, 2000)

If you already sell products offline, moving online may not be as simple as putting pictures of your products on your website. Here the Popcorn Factory specifically faced a navigation issue. They didn’t want to overwhelm users. Nevertheless, not all products are tailored to the online world. For example, a clothing store that sells suits and dress shoes will probably find dress shoes are far easier to sell online than suits. Clothing that needs to be tried on first may be harder to sell than shoes that have fairly universal sizes. Such differences may affect policies such as return policies. Return policies online may have to be different than the return policy you’ve used successfully in the past.

These are just some of the things to think about. There are probably dozens of factors I could list. However, hopefully you see the point. When you decide to go online make sure you think through how the customer’s preferences are different online than when he is buying from you in your store or even over the phone. Your online policies, prices, product descriptions, may need to be different.

This brings us to our last point.

The Popcorn Factory's products are well suited to being delivered by mail. The Popcorn Factory started as a mail-order business, so their products are already nicely suited to being delivered through mail. What does this mean for those of us who don’t have mail-order businesses to learn from? We can take a look at the products we’re trying to sell online and make sure they really fit the online purchasing model. For example, the majority of cars will probably always be purchased locally. The internet is a powerful marketing tool for cars, but most customers want to test drive the car they ultimately buy. On the other hand, tin cans of popcorn are very easy to sell online. The cost is low; if you don’t like the popcorn, you’re not out a lot of money. Popcorn is a pretty standard product that is hard to mess up, so there isn’t much fear of completely botched service.

Thus, it is wise to ask yourself the following questions: Do customers understand your product well enough that they would feel comfortable buying it online? Is your product’s value proposition only convincing when seen in person? All of these factors will affect your conversion rate. Again, these factors are far more important than the overall look and feel of your website.

In conclusion, product selection on your website is going to have a larger impact on your conversion rate, than even the best website design can have. The Popcorn Factory achieves a high conversion rate, not because of outstanding website design, but because of outstanding products. Focus intensely at improving the product selection on your website and you will naturally see an improved conversion rate.

References:
MarketingCharts.com. 2007. “Top 10 Online Retailers by Conversion Rate - December 2007”
Eisenberg, Bryan. January 29th, 2008. “Top 10 Online Retailers by Conversion Rate: 12/2007”
Esenberg, Bryan. February 3rd, 2008. “Top 10 Online Retailers by Conversion Rate: An Analysis”
Warren, Liz. May 18, 2000. “Positive approach to e-business will pay dividends for SMEs”

Internet Discounters: Do you really provide a discount?

Summary: If you are an online discounter, how can you convince customers that you really provide a discount? You can't expect the customer to trust you. You must provide the customer with evidence either by showing your prices versus competitor prices or by offering a deal so good the customer can't refute it.

"Super sale!!", "Only One More Left!!" These are phrases we hear all the time. But do customers believe those statements? After hearing overstated hype so often, customers are now skeptical that prices being advertised are really lower than average. If you can convince the customer your prices are good, you are many times more likely to win their business. You don't want the customer to just window show.

There are two principal ways to convince the customer that you provide a meaningful discount.

1. Show actual prices of your competitors.
2. Find one product you can sell so cheap, that customers don't question your discount.

Showing actual prices from your competitors is effective because such facts can't be questioned by the consumer. The key is that the company you use as a comparison does not need to be another discounter. You don't have to convince the customer that you have the best price on the web, you just need to convince the customer that you truly provide a discount. Therefore, if you sale an identical product as a premium retailer such as Nordstrom's, and you can prove your price is lower, by all means refer to the competitor explicitly. This evidence makes a far stronger statement than your merely stating you provide a discount.

Your second option to convince the customer that you provide a great discount is taken from Walmart's playbook. Do you remember November 28, 2003 when a Central Florida Walmart offered a DVD player so cheap ($30) that it caused a stampede? Sam Walton, the founder of Walmart, began Walmart's use of this technique to draw in shoppers.

Sam Walton realized that if he offered even one product at an unforgettable price, he could draw in shoppers to shop at his store at an incredible rate. Such outlandish sales accomplished two things. First, it generated publicity and drew in shoppers for higher margin products. Second, it gave Walmart a reliable reputation for low prices.

However, you may be worried that you can't profit by copying what Walmart has done with success, because while Walmart was selling more than just the $30 DVD player to visiting shoppers, your website tends to sell only one or two products in a single shopping cart.

That's a valid concern. Your best option here is to try and cross-sell higher margin products or services to make up for margins you lose on your sale.

Nevertheless, if neither of the suggestions in this article seem to work for you, you may need to consider another reality.

You may do well to ask yourself, "Am I really able to provide the customer with a discount?" Some industries are so competitive that it isn't possible to offer a better price than what your competitors offer. If that is the case, then can you really build a business based on discounting? Sometimes it is wise to consider another business model. For instance trying to be a premium retailer instead of a discounter, essentially becoming a Mercedes of your industry instead of a Kia.

No matter what you end up choosing, be honest with the customer. The worst thing you can do is tell the customer an untruth. If you offer a consistent discount, then by all means state this on your website. However, if you don't offer a discount, it is best not to lose the customer's trust by telling him that you, like Walmart, have "Always low prices."

By being honest and providing evidence that your website's prices are lower than the competition you will win customer trust, generate buzz, and have a consistently higher sales conversion rate for your website.

[Video] Site Review: Using a Loss Leader to Stimulate Discount Website Sales

Summary: How can a discount website attract traffic and generate buzz rapidly? Sam Walton, the founder of Walmart, perfected the art of using unheard of discounts (a loss leader) to generate foot traffic and buzz. In this video review, we discuss how a discount website can leverage this strategy to grow sales.

What is the value of a single website visitor?

Google Analytics statistics for TechCrunch.com. Posted on CrunchNotes.com

Summary: By looking at the revenue per customer of Amazon.com and TechCrunch.com we can estimate how much the average business should be spending on its website. Website owners know that if the amount they're spending on their website exceeds the site's revenue generating potential they will quickly find themselves in bad shape financially. However, many site owners don't know what a mature site's ultimate revenue earning potential will be. This post attempts to help you calculate this on a per visitor basis.

We all seek to increase the number of visitors to our website. However, the amount that many companies spend to acquire a single visitor is often far beyond the value of that visitor. It is intelligent to analyze your website’s revenue potential to ensure you never spend more to acquire a visitor than the amount of revenue that user will generate.

Unfortunately, most of us face a catch 22. Because most of us have never had tens of thousands of visitors hit our website every month, we don’t know how much money we can generate from each visitor.

We optimistically imagine that if we can get traffic at what feels like a reasonable cost, then we will be able to recoup the investment to obtain that traffic.

But as a reality check, let’s look at someone else’s data to see what type of revenue generating potential is reasonable to expect from our website.

First let’s look at a successful content website. Yesterday I was watching this Yahoo! Tech Ticker about TechCrunch.com a successful technology blogging website. In the video, Michael Arrington, the founder of TechCrunch.com, reveals that TechCrunch.com has an annual revenue run-rate of $3 million. Then today on Michael Arrington’s blog, he posted the above graph from their Google analytics data. This graph shows that in January TechCrunch.com had 2,647,027 visitors.

So how much revenue is TechCrunch.com generating per visitor to their website? At the current reate, TechCrunch.com would get about 31.8 million visitors per year. At $3 million in revenue per year that is about 9.5 cents per visitor.

So, one of the most successful content websites, TechCrunch.com, generates only 9.5 cents per visitor. Are you operating a content website? Are you spending more than 9.5 cents per visitor to acquire readers? Remember you must include all costs in this figure, including any costs to author and host content.

What if you sell a product? Let’s look at another example. As of this writing, Amazon.com gets about 600 million visitors per year and generates $14 billion in revenue for these 600 million visitors. Thus, Amazon is making about $23 per user.

If you operate an e-commerce website, do you think your revenue per customer is similar? Can you build out this website, grow it, and advertise it for less than $23 per customer?

What should we, as website owners, do with this information?

Steve Pavlina, who is currently generating significant income from his website, has this to say: “Your business should put cash into your pocket, so before you ‘invest’ money into it, be clear on how you’re going to pull that cash back out again.” ("10 Stupid Mistakes...", March 2008)

What’s the point? Please make sure, before you invest any money into your website, that you are being realistic about your revenue generating potential. Don’t pour money into your website only to find that you quickly run out of budget and only have a small revenue increase to show for all of your money, time, and effort.

Do you operate a content website? Then ask yourself, realistically, should I be spending any money on advertising? Perhaps you should be focusing on generating quality content and nothing else.

Do you operate an e-commerce website? Then ask yourself, realistically, should I be more concerned with increasing my traffic or increasing my revenue per customer? Perhaps you should be increasing your revenue per customer and forget about increasing your traffic at this time.

If you are to be successful, the answer to these questions must be impacted by a realistic assessment of the value of a single website visitor for your company.

Make sure you carefully compare your income per customer to your investment costs per customer before you invest a penny in your website.

How can you use live chat to increase your website conversion rate?

Having live chat on your website is a good way to add a human touch and increase your website's conversion rate.

Summary: Customers that use live chat on a website can have conversion rates double website visitors that do not use live chat. Chat improves your conversion rate by building a human relationship with the customer. It is most appropriate for mid-sized to large companies, because it requires an employee always be available to chat online. Consider integrating live chat on your website so that customers can speak directly with one of your sales representatives when they have questions or want more information.

This article, by David Kain of Kain Automotive, points out that chat is an excellent way of improving a website's conversion rate.

Francis Bilodeau, Web Project Manager for Drummond Designs, says "chat helps our company double conversion rates over visitors who don't chat."

What makes chat so effective for generating website sales?

1. The internet is a very impersonal medium. Human contact builds a human relationship.
2. Many customers are more apt to chat online than they are to call your phone number or send an email.
3. Chat protects the customer's privacy. For example, sending an email opens the customer up to annoying return mails (e.g. spam) from the company she has contacted. Calling might reveal her phone number on caller id.

In my personal experience, which agrees with companies such as Drummond Designs, I am far more likely to use a company's chat option than to call or email. I have used chat a number of times to gather information about a company, but I have called or emailed rarely.

So what chat solutions are there? Talisma is one I've seen large companies such as Microsoft use. LivePerson is another. However, honestly, helping you choose a solution isn't my area of expertise. I'd recommend searching Google for "chat solutions". You'll get plenty of results you can research further.

Chat is not for all companies. The biggest problem you're probably going to run into, if you're a small company like mine, is who can be available to answer customer chat inquiries? That's where we each must take time to learn more about chat, look at the costs versus benefits for our business, and make a decision about how to move forward.

In conclusion, if you sell a product or service online, strongly consider putting live chat on your website. Start small, and as you see improvement, grow it out. If you thoroughly plan your approach, you will see that live chat can help you increase your overall website conversion rate!

What is a Good Website Conversion Rate?

Chart based on marketing research data from MarketingCharts.com.

Summary: The best retail websites have a double digit conversion rate. If you are a retail website you do well to set a conversion rate target of greater than 5%. However, some websites, especially those that also mail customers a print catalog, can obtain a conversion rate greater than 10%.

Just what is a good website conversion rate? For reference, Amazon.com had a 17.6% conversion rate in December 2007. This number can help us set a baseline goal for our websites.

Your website conversion rate should be one of your most tracked website statistics. Why? Because it doesn't matter how many visitors you have; if your conversion rate is zero that means your website has generated zero business. Thus, improving your conversion rate is the smartest way to increase your sales.

Your conversion rate is calculated by dividing the number of website visitors who spent money with your company by the total number of visitors to your website. For example, if your website had 10 purchases last month and you had 100 total visitors, then your conversion rate would be 10% (e.g. 10% of customers spent money on your website).

A well designed website is generally going to have a higher conversion rate. You do well to ask yourself:

1. What is my conversion rate today?
2. Am I happy with my current conversion rate?
3. Is my current conversion rate good for my industry?
4. What can I do to improve my conversion rate?

Unfortunately, conversion rate statistics for each industry are difficult to find. I did, however, come across data from MarketingCharts.com that lists the top 10 websites on the internet by their conversion rate!

What can we learn from this list? I can identify at least two lessons:

1. That conversion rates in excess of 10% are possible for a retail site. Compare this to your site.
2. That sites that send out a physical catalog to customers dominate the conversion rate list. Perhaps you can include direct mail marketing in your budget.

This list leaves us with some questions. For example, what makes The Popcorn Factory such a successful website?

If we can learn lessons from successful websites that have proven their ability to convert website visitors into paying customers, then we can generate more income from our websites.

To accomplish this, I will soon be analyzing some of the companies from this list and sharing that analysis on my website. Please check back for the analysis.

In the meantime, why don't you examine these top ten websites and see if you can determine why they are so successful at converting website visitors into paying customers. Then apply these lessons to your website.