We’re not breaking any new ground when we say that your conversion rate matters. Whether you’re trying to capture new leads, get people to complete a form, or sell a product, your conversion rate will make or break you.
But what many marketers fail to consider is just how much poor conversion rates cost them. Every missed lead is one less customer. Every failed sale is less revenue. Every time a customer gets frustrated filling out a form takes them one step closer to switching to another company.
(Also, 1 + 1 = 2).
But when it comes to actual lost revenue, how much are we talking? It’s easy to talk about conversion rates at a high level without ever realizing just how much low conversion rates can cost you.
To get a handle on this, let’s look at some common conversion rate mistakes and then create a basic estimate of how much these mistakes can cost you.
Common Conversion Rate Mistakes
There are dozens of well-established conversion rate mistakes, but here are a few of the most common.
Mistake #1: No People
More and more, people want authentic human connections with businesses. So many companies have cold, stuffy, corporate-feeling websites. Adding a personal touch to yours can make a huge difference in your conversion rates.
37Signals (now Basecamp) discovered this when they added an image of a person to their landing pages. The result was an 102.5% increase in conversions.
Mistake #2: No Live Chat
Few things are more frustrating than having to wait ages for a company to answer a question or fix a problem. Nothing makes you want to smash your computer more than calling the company and hearing that you’re a “valuable customer” but also are 44th in queue.
So it’s no surprise that adding a live chat option significantly increases conversion rates.
When Intuit added live chat to their site in order to engage prospects and customers, they say a 211% increase in sales.
Mistake #3: Not Targeting By Device
Landing pages absolutely must be optimized for an ideal user experience across every type of device. The bottom line is that people expect pages to load fast, whether they’re on a laptop, tablet, or mobile phone.
Wal-Mart Canada noticed that a significant portion of their traffic was coming from tablets, so they optimized their site to increase page performance, particularly on tablets.
This single improvement led to a 20% increase in conversions and a 98% increase in sales.
Mistake #4: No Progress Bar
If people have no idea how much work is required to fill out a form, there’s a good chance they’ll bail before they complete it. Remember, the internet is all about speed, and the longer something takes the less people want to do it. There’s a reason Amazon tries to make checkout as fast as possible.
When Ecwid optimized their progress bar to show how visitors were progressing through both free and paid plan sign ups, they saw a 21.3% conversion rate increase among English speaking users.
Mistake #5: No Urgency
Adding urgency to a Call-To-Action is a tried-and-true marketing technique that has been proven again and again to increase conversion rates. It forces hesitant consumers to make a decision about whether or not to purchase.
When Dewalt (a Black and Decker brand) added a graphic of a clock along with the message, “Order in the next N hours for delivery today,” it resulted in a 27% increase in orders.
Mistake #6: A Cluttered Landing Page
It’s not uncommon for a landing page to have loads of choices, whether in terms of a lead magnet, product, or fields to be filled in. This creates cognitive friction or overload, which is what happens when you have so many choices that you get overwhelmed and don’t pick anything.
When The Weather Channel wanted to turn visitors into premium subscribers, they dramatically simplified their home page, resulting in a 225% increase in subscribers.
Mistake #7: No Reviews
Purchasing something online can be somewhat intimidating, especially if a person has been burned in the past by a terrible product or company. That’s why reviews and testimonies are so helpful. They are a sign that your company is trustworthy and the product you deliver is excellent.
When FigLeaves (a clothing brand) added product reviews to their website, they saw a 35% increase in sales.
Doing The Math
Now, let’s put these statistics together to get a feel for how much poor conversion rates could be costing you.
For the sake of this example, let’s say you’re trying to increase the conversion rate on your eCommerce site. And for purposes of simplicity, let’s use the average value of eCommerce purchases, which is $82, and a conversion rate of 2%. So for every 100 visitors, you’re generating 2 sales for a total of $164
Granted, this is high level and very reductionist, but it’s helpful when trying to grasp the big picture.
So, let’s say...
- You add an image of a person to your page, increasing your conversion rate by 102.5%. If you’re currently generating 2 sales per 100 visitors, you’d soon be generating 4.05 sales per 100. Your revenue goes from $164 per 100 visitors to $332.10.
- You implement live chat on your site. Your conversion rate increases by 211%: you generate 6.22 sales per 100, and your revenue increases from $164 per 100 to $510.04.
- You optimize your landing pages to perform well on specific devices, increasing your conversion rate by 20%. You generate approximately 2.4 sales per 100 visitors and increase your revenue from $164 to $196.8 per 100.
- You add a progress bar to your landing page, increasing your conversion rate by 21.3%, and generating 2.4 sales per 100 visitors. This increases your revenue from $164 per 100 to $198.93
- You increase urgency on your landing page, increasing your conversion rate by 27%, and generating 2.54 sales per 100 visitors. This increases your revenue from $164 per 100 to $208.28
- You dramatically reduce the number of fields required, increasing your conversion rate by 225%, and resulting in 6.5 conversions per 100 visitors and revenue of $533 per 100 visitors.
- You add reviews to your site, increasing your conversion rate by 35%, and resulting in 2.7 conversions per 100 visitors and revenue of $221.40 per 100 visitors.
In an absolute perfect world, in which you perfectly stacked all these improvements on top of each other, one after another, your conversion rate increases by 641.8%, you generate 14.83 sales per 100 visitors and your revenue would exponentially increase from $82 per 100 visitors to $1,216.55 per 100 visitors.
Granted, this is an extreme scenario that completely eliminates the human factor and is based on everything be implemented perfectly, neither of which can happen in real life. But this extreme scenario is like the classic story of starting with a single cent and doubling that every day. Compounding creates huge results over time.
So even if you can implement some of these conversion tactics imperfectly, the potential for revenue growth is enormous.
And on the flip side, failing to improve your conversion rates truly could cost you millions of dollars. It’s really that simple.
The moral of the story? Don’t stand for the status quo. Don’t let your conversion rates stay where they are. Start implementing the above tactics as you create your landing pages and forms.
You’ll be amazed by the results.
Putting It All Together
Okay, you get the point: having a bad conversion rate sucks. But it’s easy to get lost in all the numbers we crunched above. So let’s take it up to 30,000 feet. Let’s try to get a feel of what conversion rate improvements would look like across the entire eCommerce economy.
Let’s apply the conversion rate improvements noted above to eCommerce as a whole.
What’s the cost of poor conversion rates when we extrapolate across the whole online economy? In a word: Massive.
Even if we look at just a few of the most common problems that affect conversion rate, we could assume that, on average, most sites could boost their conversion rate by some 237% across the board.
If that happened, we’d be looking at a massive increase in the total number of conversions and an associated uptick in revenue.
According to our calculations, retailers are leaving an estimated $10.8 billion in revenue on the table every single day.
This is, of course, a bit of a simplification.
But the point’s clear. Poor conversions have a high cost. Anyone who isn’t actively investing in improving and optimizing their conversion rate online is throwing money out the window. Or, perhaps more accurately, abandoning cash in the cart.
Paperform helps companies build beautiful, usable landing forms that are optimized for conversions.