Conversion rate is a much talked about term in the e-commerce world. People new to it are so obsessed with it that most of them aren’t able to see the bigger picture. Conversion rate is a term which broadly defines the number of people purchasing from an e-commerce website out of the total people that landed on the website in percentage terms. Usually conversion rate has been used in major decisions for e-commerce websites. Conversion rates are very important for informed decision making; however caution should be exercised not to overemphasize on it.

Let’s check under the hood the misperceptions that people carry on with their analysis of conversion rates.

First of all, e-commerce websites have a lot of different variety of products available on their website. Each product has different price and profit percentage. If the sale of a very expensive product has taken place then the customer’s conversion into cash would be much higher. On contrary if most of the sales is through low cost products then customer conversion into cash becomes less attractive. Conversion rates are therefore difficult to calculate and some method of calculating different conversion rates must be devised in order to ensure that the conversion rates of customers represent the true picture.

As we have already defined conversion rate, in conversion rate we count every visit to our site as a potential visitor. Just for sake of example when anyone goes to an e-commerce website for a product, there can be many reasons for that visit. He may just want to check the price, make comparative analysis amongst different products, compare prices among different vendors, or is just looking at the features of the product. There can be numerous possibilities other then the intention of purchasing something for which someone might want to visit a website. It is therefore tricky to track the actual visitors who originally came to buy a product from a website.

To really start working on improving conversion rates, we have to look beyond the obvious data for a lot of hidden factors. For example, we can see the number of casual visitors on our site that never intended to purchase a product. We should also check out product wise conversion rates. This will help us give an idea of our star performers on our site. We should check our analysis on which pages the customers more visit on our e-commerce site. This will give us a pattern of an e-commerce customer and the way he looks at things. In fact our website statistics can play a very vital role in straightening our conversion rate ratios.

Unless we have are willing to work beyond the obvious, mere conversion rates won’t help improve our sales as well as profits for our e-commerce websites.