The Conversion Rate

A key concept in understanding the value of usability is often called the ‘conversion rate’. Conversion rates are usually low. What is particularly relevant in the context of usability is the huge benefits that a small change in the rate can offer.

Why is usability such an important factor in the success of e-business developments?

A key concept in understanding the value of usability is often called the 'conversion rate'. Simply put, it represents the percentage of unique visitors who go on to interact with the site in a pre-defined way. Usually this means make a purchase, but depending on the site in question it could mean registering for more information, placing a bet or opening an account.

Conversion rates are usually low. That isn't particularly surprising - they are low in almost any industry, online or offline. What is particularly relevant in the context of usability is the huge benefits that a small change in the rate can offer.

How Usability Helps

Creating more usable interfaces is clearly one way of improving conversion rate. To take purchasing as an example, making products easier to find, providing the sort of additional information that customers require, and building the trust of the user will help increase the percentage of users who eventually buy. Of course there are other factors (such as price), but other things being equal, improved usability should increase the conversion rate.

Return On Investment

When we look at the implications of increasing the conversion rate the value of this work becomes apparent. Take a situation in which Company X has 10,000 visitors a month, of which 5% make a purchase. Total purchases are 500. Increasing the rate to 10% will double the total purchases to 1000. This in effect is doubling revenue, but even more significantly it is doubling the return from any fixed number of visitors and thus making marketing effort far more cost effective.

A jump from 5% to 10% may seem optimistic, but in our experience such increases are perfectly possible. We have experienced increases in conversion rates from under 40% to over 90% for registration processes - after a single evaluation and redesign project.

The Alternative

What is the alternative to improving conversion rate? There is only one other side of the equation, and that is attracting more users to the site in the first place. In the example above, this would involve adding 10,000 more unique users to the site. Doubling visitor numbers in this way tends to require extensive offline advertising, and crucially, the return on marketing investment has not improved at all.

There is absolutely no doubt that spending on increasing the conversion rate is more cost-effective than attempting to attract new first-time visitors. But perhaps even more importantly, it makes no sense to even attempt the latter course of action unless you are confident in the efficiency of your site.

Spending significant amounts of money to attract more visitors is a poor investment if the conversion rate is not optimised. Disappointed users are unlikely to come back for a second time, so poor usability and low conversion rates will mean that those customers attracted by marketing efforts will most likely leave and never return.