Sizing your opportunity
Friday, June 27th, 2008An argument often made in relation to website performance goes as follows:
If the conversion rate on a site is 2% then there is a 98% pot of untapped revenue? Technically yes but realistically no.
If 98 out of every 100 visits to the average e-commerce site don’t make a purchase then there is clearly an opportunity, but it’s unrealistic to think that the size of that opportunity is the entire remaining 98 visits - no sane person would think that anyway!! The question then becomes, what is the realistic size of the opportunity?
This is worth asking in light of the fact that site managers and marketers must spend money chasing the revenue and the amount spent often relates to the size of the opportunity.
It’s far more likely that some visitors are there simply to research either products or prices or both. Anything between 2% and 10% percent may admit to wanting to buy and it’s these are the guys that represent the real opportunity. The reality is that even a site wide conversion rate of 8% would be well above average for most e-commerce sites so it would be an impressive feat to reach that but this is at least a more realistic figure to aim for.
The best way to find out why they’re there? Ask them.
