Why is My Ecommerce Conversion Rate Important?

Oliver Kenyon
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January 23, 2024
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Most businesses, especially retail ones, rely on ecommerce for their sales. An ecommerce website is a website that allows customers to buy products or services online. What many businesses don’t know is that their ecommerce website’s conversion rate is important.

If you think visitors land at your store, hang around, and some of them will eventually buy something, you are only partially right. The average global conversion rate for all ecommerce websites is 2.5%. This means that only 2.5% of all website visitors actually end up buying something.

For some businesses, a 2.5% conversion rate may be enough to sustain their business. But what about 97.5% of visitors who don’t buy anything? These are potential customers that you are losing out on. This is where e-commerce conversion rate optimization (CRO) comes in.

Ecommerce Conversion rate optimization is the process of increasing the percentage of visitors to your website that takes the desired action. The desired action could be anything from purchasing, signing up for a newsletter, or downloading a white paper.

Many different factors contribute to a website’s conversion rate. For instance, the major factors include:

Is your website/store easy to navigate?
Do you have a clear call-to-action (CTA)?
Is your website mobile-friendly?
Are your product descriptions clear and concise?
Do you have customer reviews and testimonials?
Is your website fast and responsive?
Does your website have a high bounce rate? If yes, why?

Answering these questions can help you identify areas of your website that need improvement in order to increase your conversion rate. A problem must be fixed if a website is getting tons of traffic but not sufficient sales/conversions. The reason would most probably be among the points listed above.

But Why does eCommerce conversion rate optimization matter A lot? Why is my ecommerce conversion rate important? Does a high conversion rate really equate to more sales and revenues? Let’s take a look.

Why is my Ecommerce Conversion Rate Important?

Well, for starters, a higher conversion rate means more sales and revenue for your business. Even without spending extra on marketing or advertising, you can increase your sales from existing website traffic simply by improving your conversion rate.

A 1% increase in conversion rate can lead to a significant increase in profits. For example, if your website currently has a conversion rate of 2% and 100 visitors per day, you are making 2 sales per day. If your estimated price per sale is $100, you make $200 in daily revenue.

Now, if you can increase your conversion rate from 2% to just 3%, you would be making 3 sales per day instead of 2. This means that your daily revenue would increase from $200 to $300 – a 50% increase! All you did was improve your conversion rate by 1%. ecommerce conversion rate calculator

Check this screenshot from ConverionWise ROI calculator for e-commerce:

ROI calculator

Do you see? Just a 1% increase in conversion rate can have a huge impact on your business. Conversion rate optimization experts at ConversionWise recommend a 3-5% conversion rate as a good benchmark for ecommerce websites.

Now, let’s discuss the reasons why having a higher conversion rate is essential for your ecommerce business:

1) Rising Pay-Per-Click (PPC) Costs:

Since 2020, the number of businesses selling online has increased significantly. The pandemic has forced many brick-and-mortar businesses to close down and shift their focus to ecommerce. This has led to increased competition, and as a result, the cost-per-click (CPC) for PPC advertising has gone up.

All of the businesses are competing for the same audience and the exact keywords. This has led to a bidding war driving up the CPC. The only way to combat this is by having a high conversion rate so that you can afford to spend more on PPC without seeing a decrease in ROI.

If you are just getting average sales, but the PPC is costing you a fortune, it means there is a BIG reason why customers land on your site but don’t buy from you. This is why e-commerce conversion rate optimization should be a top priority for businesses.

2) The Importance of First Impressions:

You only have a few seconds to make a good first impression. First impressions matter – a lot. According to a study by Microsoft, people form an opinion about a website in as little as 50 milliseconds. That’s 0.05 seconds!

This means that you have a very small window to make a good first impression. When a user lands on your site, the above-the-fold area is what they see first. This is the most important part of your store/landing page/ecommerce website, and you need to make sure it conveys the right message.

Look for the following points while auditing your above-the-fold area:

Is your CTA (Call To Action) visible and clear?
Do you have a strong headline that accurately reflects what the user will find on your site?
Do you have a good tagline that accurately reflects your brand?
Do you have social proof in the form of testimonials, reviews, or ratings?
Do you have any trust indicators such as guarantees, certifications, or security badges?

If you are missing any of the above points, it’s time to make some changes. Remember, you only have a few seconds to make a good first impression, so make them count!

3) The Impact of Mobile Shopping:

Mobile shopping is on the rise, and it’s not showing any signs of slowing down. In fact, according to Statista, mobile commerce sales reached $3.56 trillion in 2021 and will continue to grow in the coming years.

This means that if you want to stay ahead of the competition, you need to have a mobile-friendly website. This is not an option anymore – it’s a necessity.

If your website is not mobile-friendly, you are automatically losing out on a large chunk of potential customers. This is because people are more likely to abandon a website that is not optimized for mobile devices.

Make sure your website is responsive and loads quickly on all devices. Also, make sure the design is easy to navigate and the user experience is smooth.

Remember, a bad mobile experience can cost you dearly, so ensure your website is up to par.

4) Saves Your Money

Ecommerce conversion rate optimization helps you get more sales and revenue and directly impacts your bottom line.

You might be spending a lot of money on Acquisition (Facebook Ads, Google Ads, etc.), but if your conversion rate is low, you are essentially wasting money. We also discussed it earlier; a low conversion rate means spending more on ads but not seeing a good ROI.

On the other hand, if you have a high conversion rate, you can afford to spend more on ads because you know that the return on investment will be good. In other words, a high conversion rate saves you money in the long run.

5) Helps You Get More Repeat Customers

This is one of the most overlooked benefits of having a high conversion rate. A high conversion rate not only helps you to get more sales but also leads to repeat customers.

This is because when a customer has a good experience on your website, they are more likely to come back and make another purchase. Moreover, they are also more likely to recommend your business to their friends and family.

A high conversion rate leads to more sales and helps you build a loyal customer base that will stick with you in the long run.

Conversion rate optimization is not a one-time thing; it’s an ongoing process. This means that you must constantly test and experiment with different elements on your website to see what works and doesn’t.

6) You Get to Know Your Customers Better

You automatically get to know your customers better when you apply proven CRO strategies to your website. This is because you constantly experiment with different elements on your website and see how they react.

You get to know what kind of messaging they respond to, what kind of design they like, and what kind of offers they find irresistible. This knowledge is invaluable because it helps you create a website that is tailored to your customers’ needs and wants.

For instance, if you know that your customers respond well to a certain type of offer, you can make sure that this offer is prominently displayed on your website. This way, you are more likely to convert them into paying customers.

7) Improves Your Search Engine Rankings

Ecommerce is all about being visible to your target audience. And one of the best ways to do this is by ranking high on search engines like Google.

The higher you rank, the more likely people will find your website and purchase. And one of the key ranking factors that search engines take into account is your store’s conversion rate.

In other words, if you have a high conversion rate, it means people search you on search engines without you needing to target them with paid ads. The more they search for you, the better the ranking, as this search criteria signals to search engines that your store is popular and relevant to certain keywords.

8) Gives You an Edge Over Your Competitors

In the world of e-commerce, it’s important always to be ahead of your competitors. And one way to do this is by beating them with your conversion rate.

This is where the e-commerce conversion rate does the job! If your ecommerce conversion rate is higher than your competitor’s, you are selling more products even if they are selling the same product at a lower price.

In other words, a higher conversion rate gives you an edge over your competitors and helps you to stay ahead of the game.

They are spending money to bring in more traffic, but their conversion rate remains. On the other hand, you have a higher conversion rate which means you are making more sales from the same traffic. This is how having a high conversion rate can help give you an edge over your competitors.

9) Increases the Lifetime Value of Your Customers

A customer’s lifetime value (LTV) is the total amount of money that a customer will spend on your website over their lifetime.

Ecommerce CRO is all about increasing the LTV of your customers. This is because the more you can increase your conversion rate, the more sales you will make from each customer.

And the more sales you make from each customer, the higher their LTV will be. So, not only does conversion rate optimization help you make more sales in the short term, but it also helps you increase the LTV of your customers in the long term.

Take the example of a customer who spends $100 on your website every month. If you can increase your conversion rate by just 1%, this customer will now spend $101 on your website every month.

Over the course of a year, this 1% increase will result in an extra $12 of revenue from this customer. And if this customer remains loyal for three years, this 1% increase will result in an extra $360 of revenue from this customer.

As you can see, even a small increase in your conversion rate can have a big impact on the LTV of your customers.

10) Allows You to Take Calculated Risk

Calculated risk-taking is a key part of any successful business. And one of the best things about ecommerce is that it allows you to take calculated risks with your marketing and website design.

This is because you can use conversion rate optimization to test different marketing strategies and website designs to see what works best for your business.

For example, let’s say you want to test a new website design. You can create two versions of your website – Version A and Version B.

You can then use conversion rate optimization to split the traffic between these two versions of your website and see which one performs better.

If Version A outperforms Version B, then you can implement the changes from Version A on your live website.

And if Version B outperforms Version A, then you can implement the changes from Version B on your live website.

This testing and experimentation process allows you to take calculated risks with your ecommerce business and ensure that you are always implementing the best possible strategies and designs.

11) Helps You to Optimize Your Advertising Spend

Advertising is one of the most important aspects of any ecommerce business. And conversion rate optimization can help you to optimize your advertising spend.

This is because conversion rate optimization allows you to track and measure the results of your advertising campaigns.

You can use conversion rate optimization to split traffic between ads and see which ones perform better.

If you find that a particular ad is not performing well, you can stop running that ad and use the money that you would have spent on that ad to run a different ad.

This experimentation and optimization process will help you get the most out of your advertising budget and ensure that you are only running ads that are actually making you money.


There you go! Those are 11 reasons why CRO best practices for ecommerce conversion rate optimization are important for your online store.

Conversion rate optimization is not a “nice to have” – it’s a “must have” for any ecommerce business that wants to be successful.

So, if you’re not already doing conversion rate optimization, now is the time to start. Trust us; your future self will thank you for it. Not only does it help you to make more sales, but it also helps you to take calculated risks, increase the lifetime value of your customers, and optimize your advertising spend.

Looking to increase your ecommerce conversion rate? ConverionWise has been helping ecommerce businesses increase their conversion rates for over 15 years. We specialize in conversion rate optimization, and our team of experts can help you to increase your conversion rate and make more sales.

Our Conversion Rate Academy has hundreds of businesses constantly learning how to increase their conversion rates, applying what they learn, and seeing results in their businesses.

If you’re looking for help with your ecommerce conversion rate, we can help. Get in touch with us today to learn more about our services and how we can help you increase your conversion rate.


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Written by:Oliver KenyonFounderarrow
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