3 Good Reasons for a Low Conversion Rate on Your E-Commerce Site

It is a simple question but there is unfortunately no magic number and most would say it depends. However, if you want to benchmark stats on conversion rates, there are a number of resources on the web, e.g. “31 Cart Abandonment Rate Statistics”.

But in fact your conversion rate in isolation only tells a small part of the story of how your e-commerce store is performing.  

Good reasons for a low conversion rate

There could be a number of good reasons that your conversion rate is low or lower than the average, some of which you should celebrate and even develop further. Examples include:  

1. You are better than average in attracting organic, free traffic via search engines or social media referrals. This means you pay less to have more visitors to your site, which makes the conversion rate an inaccurate measure of success. After all, maximizing sales at a low cost is another way to increase profitability and ensure the long term sustainability of your business, right?
2. You are great at content marketing and service. Perhaps you are hosting a blog or articles on your site. This means people may come not only to buy, but also to read and interact. Useful content and service help existing or potential customers to establish a relationship to your brand. These people hold the potential to gradually convert into loyal, repeat customers. You should encourage these type of visits rather than worrying about the impact on the conversion rate. We have previously provided our thoughts on the value of better customer relationships.
3. You have a solid and consistent email program with good click through rates. It keeps your site top-of-mind and increases the traffic to your site, but inevitably lowers the conversion rate. But again given the low cost of sending an email, you should enjoy increased sales by virtue of your email program and be less focused on your conversion rate.

There are more examples of good reasons for a lower than average conversion rate, but the take-away remains: the conversion rate in isolation cannot be used as an accurate measure of your site’s performance.  

“Bad” reasons for low conversion rate

At the same time, let us not be ignorant of the improvement opportunities which may underlie a lower than average conversion rate. Examples include:  

• Your site has less than optimal user experience which makes it difficult for someone to complete an action or transaction. For example read about the impact of mandatory account registration.
• Your website does not have a better selection, lower prices or greater convenience than your competitors – your product does not seem to be unique. There is simply insufficient reason to buy from your e-commerce store.
• Customers want to buy your product but do not trust your site or know your brand and will not risk sharing payment details with you.

You should explore both the good and bad reasons for your e-commerce site’s conversion rate and optimize accordingly. That is easy to say. Can PayPal help?  

Does PayPal have a role to play in improving conversion?

At PayPal many of our customers report an improved conversion rate after introducing PayPal.
Why? For many consumers in countries with a low credit card penetration PayPal may be only means of paying online. But the most important factor is security. PayPal studies shows that risk of fraud gets in the way of more than 25% of potential online transactions. When using PayPal, the buyer only needs to share an email address rather than credit card details with your site. Also, buyers have credible assurance of actually receiving the goods through PayPal’s buyer protection.

But in fact your conversion rate in isolation only tells a small part of the story of how your e-commerce store is performing.

Tips to better understand the good and bad reasons for low conversion rates:  

1. Align yourself with competent people, and you need to also master your craft. Get a good team around you.
2. Use your findings to understand the main objectives for people visiting your site – e.g. service, reading, buying, browsing and how that helps your overall business.
3. Measure performance of your site against these objectives.
4. Optimize your site accordingly.

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