I’ve written quite a bit about conversion rates on this blog, but the fact is that most people that visit an e-commerce web site have no intention of buying. They are window shopping. Optimizing your web site to increase your conversion rate is very important, but you can’t forget about optimizing for the 70-80% of people or more that are “window shoppers.”

The mistake that a lot of online retailers make is to not engage the vast majority of their visitors — the ones that don’t intend to buy.

Yes, you can entice a small percentage of these window shoppers to buy with offers like “buy one, get one,” coupons and free shipping, but what about the remaining lot?

The answer is engagement. If you can engage window shoppers, you can get them to continually interact with your company, and when they are ready to buy, your site will be top-of mind.

So how to you engage window shoppers? Here’s how.

Make your e-mail newsletter signup more visible

If you don’t have an e-mail newsletter, you really need to start one. Next, make sure your e-mail signup form is visible.

Many web sites have e-mail signup forms at the bottom of their sites. While that’s an acceptable place for the form, why not duplicate the form and place it higher up on the page where people can see it right away? By making the form more visible and writing a good call to action (like “Get sales and exclusive tips by signing up for our e-newsletter”), you’ll increase your subscriber rate.

This probably goes without saying, but you need to publish your e-mail newsletter regularly and pack it full of good content. Remember, it’s about keeping prospective customers engaged.

Write a blog (regularly)

No matter what you’re selling, you should publish a blog with RSS feed. Other than product inventory and pricing, the typical e-commerce site is rather static. By adding a blog, you’ll freshen the site by regularly adding content that complements the products you’re selling.

The goal in blogging is twofold. First, you want to generate some credibility for your company (see the next section on social media for some promotional tips). Second, you’re giving prospective customers some good information and keeping your company top-of-mind. Also, good search engine optimization is often a by-product of a well-written blog.

Engage in social media

Admittedly, social media isn’t for everyone. But if you, your marketing manager or other staff in your company are already using Facebook, Twitter, You Tube, etc., then you need to get them involved.

I won’t go into all of the options that social media offers (I may go into that in a future post), but for starters, you can create a discussion group on a Facebook Fan page. You can tweet latest blog posts, new products and sales on Twitter. You can make how-to videos for a You Tube channel and embed them in your blog. There are many more opportunities, so be creative.

In conclusion

Here are some questions for consideration within your company:

• How can my company test positioning of newsletter signup forms?
• Can I offer people in my company the opportunity to write blog posts to distribute the workload?
• Who in my organization can I tap to help brainstorm customer engagement ideas? (Don’t be afraid to ask entry-level employees for their advice!)
• How could I make a blog more visible?
• How can my company use social media in ways my competitors are not?

Perhaps one of the biggest challenges online retailers face is creating a personal experience. If a customer walks into a store, they are greeted, given service, and assisted in making a purchase. With a web site, that personal connection just isn’t there. I wanted to share a recent case study with you to show you how we helped a client create that personal connection with their customers.

For starters, my client is a rather small e-commerce company, shipping fewer than 100 orders per day during non-holiday seasons. Customer service representatives are able to spend time on the phone with customers when they call, and they’ve done a great job at “getting to know” many of their most loyal customers personally. The shipping manager even personally writes “thank you” on the packing slips that go in each box. Customers have appreciated this for years, even mentioning it when they call customer service.

This client launched a new web site — one that replaced the web site they’ve had for nearly six years. It’s served them well. We optimized the old site for conversion and made it as user-friendly as possible, but their feature-set was lacking and we needed to bring it up to today’s technology.

The site was finished early, but rather than launch it in the middle of the holiday selling season, we decided to wait. Rather than let the site sit dormant for another month or two, I pitched an idea. We would film a video of the owner announcing the new web site, talking about its features, and invite people to try it before it replaced the old site. We set up an online survey to collect feedback from their most loyal customers, and in exchange for the feedback, the customers received a 10% off coupon for their next online order (old site or new).

We pulled the most frequent and loyal customers from their order database — ones that often ordered over 20 times in the past six years. We then sent these loyal customers an email with a link to the video greeting and more information about the new site, inviting them to take the survey and receive the 10% off coupon.

This e-mail had better than a 75% open rate, and about 80% of those who opened the e-mail filled out the survey.  A few even called the company with feedback.

While the e-mail was sent only to the most loyal customers, we think the response was so good because of the personal connection the video created. The customers had seen the “thank-you’s” on the packing slips and heard the owner’s voice on the phone before, but this was their first chance to see the owner and listen to her talk.

This is just one example of how online video can create a personal connection with customers. What’s your example?

Since many small businesses (especially in today’s economy) don’t want to spend a fortune on testing and research, I was pleased to see Marketing Sherpa‚Äôs brilliant new article called “Case Study: Increase Conversions with Simple Site Redesign: 7 Steps‚” (you can read this article and see creative examples for free until April 15th). The article provides some great advice to companies looking to test redesigns on the cheap.

The key to testing on the cheap is knowing what the problems with the current page are — usually identified through your web analytics — then incrementally redesigning the page and asking for input.

By pulling together a “best customer” list (I define ‚”best customers” as repeat customers or long-time customers) and asking them to provide input on your web page designs, you‚’re not only getting free advice directly from real customers — you’re engaging them and telling them that you value them as customers.

We did this in late 2008 during the Virginia Favorites web site redesign. Virginia Favorites has a best customer list they regularly promote exclusive offers to, and we sent them a link to a hidden web address for the new web site and asked them for feedback.

The e-mail we sent offered customers an exclusive sneak peak at the redesign that addressed features they had been asking for. If they completed a survey, they’d immediately receive a 10% off coupon. The SurveyMonkey survey the customers were asked to complete included specific questions about the design and an open-ended question for general comments.

We received many comments from this “focus group” and we made some tweaks to the new site based on the feedback.

The cost of the testing was minimal, and the conversion rate of the new site is over double the conversion rate of the old site (and higher than the industry average conversion rate).

Inexpensive testing works, and is a great solution for companies that don’t want to dedicate thousands of dollars to formal lab testing or focus groups.

Today, Comscore forecasted flat growth for e-commerce holiday spending. Many online retailers are experiencing slowing growth due to customers deal-hunting and buying fewer, less expensive gifts. As customers become more frugal and spend with discretion, it’s important for online retailers to engage customers. The E-Commerce Times recently published an article about enhancing customer experience that mentioned that “traditional e-commerce sites are almost absurdly passive,” (which is also true about most company web sites in the service industry).

Part of good marketing and earning new customers is knowing them and anticipating their needs. Engaging customers — and touching on emotion — can help generate sales. The article discusses a few examples of website features and microsites that are good examples of “out of the box” sales generation tools.

During a client presentation back in September, I used the example of JC Penney’s “Get that look” microsite as a good example of how online retailers can use online video and interactivity to engage customers and sell products. The video was for the “back to school” timeframe and has been taken down, but the “choose-your-own-adventure-style” interactive rich media featured well-merchandised products available at JCPenney’s web site.

The Ecommerce Times article lists other examples of retailers that engage customers if you’d like to see examples.

Get some other ideas to respond to the economic downturn:

• Download and watch the “No Retreat! Investing in eCommerce Despite the Times” webinar from Lauren Freedman and the Acquity Group
• Read the PlumbersSurplus interview with e-commerce analyst Linda Bustos
• Boost your site’s average order size. Learn some tips to do this at Blue Acorn’s blog
• Carefully weigh the costs and benefits of offering free shipping
• 80% of customers say they would likely increase coupon use if coupons were tailored to their interests and delivered online.

There are a number of free, easy or cheap ways that online retailers can boost their traffic and sales this holiday season. With the economic downturn in full swing, retailers are being forced to be more innovative to keep pace with last year’s sales numbers. Here are some ideas.

I’m enjoying a blog post called “E-commerce Tips for the Holidays: boost traffic and sales” over at the Freelance Social Media blog. The blog post covers a few cheap/easy/free ways that online retailers can enhance their marketing during the holidays.

One of my favorite recommendations from the blog post is to submit coupon codes to RetailMeNot.com and other coupon aggregation sites. Social media are coming into their own this holiday season as a way to drive traffic and sales.

As we approach 2009, I really believe that those online retailers that embrace social media will be rewarded with more traffic, sales and customer loyalty. That’s why I’ve created a category on this blog covering social media. It’s rather empty now, but there’s more to come.

As for other ways to improve holiday sales, check out my series of blog posts from last year on holiday e-commerce optimization ideas.

E-consultancy has posted an interesting blog post today — an interview with Beautique’s Jason Russell (read the blog post here). It’s a short but interesting Q&A session with an etail startup, and covers issues like the relationship between the online store and brick-and-mortar operation (salons in this case), ways they acquire new customers, implementing customer reviews and ratings, international shipping, recruiting talent and the agency versus in-house debate. Worth the read.

I’m loving this blog post at the Get Elastic blog that comments on a You Tube case study where the guru in the video suggests that one buy button design always works the best. Folks, please don’t be tricked into thinking that there is one button style that works on all web sites. It simply isn’t true.

Read the commentary in the Get Elastic blog post and I think you’ll agree. My personal experience from testing hundreds of sites proves that there’s not one “magic” buy button, page layout, or product display. All businesses and sites are different (thus keeping me employed and working on new projects).

The video, though, does bring one point to light, and the point is that you can’t improve your results if you don’t test. Spilt testing can reveal better design that helps you sell your products more effectively.

Despite the economic slowdown, e-commerce and online business has remained strong. This prompted an article in the E-commerce Times this morning asking if this is just a fluke and if the e-commerce industry is just lucky.

The conclusion from the article is that since e-commerce businesses focus more on relationship building activities and customer loyalty than brick-and-mortar retailers, the e-commerce model thrives.

I’d have to agree with this. E-commerce businesses have so much more data at their disposal since business happens electronically. They can learn which offers and online marketing channels drive the most business, and testing offers and creative on the web is, well, easy. Not so offline. Try asking a brick-and-mortar retailer how much business their TV or radio ad drove, and you’d get nothing more than an educated guess.

Read the article at the E-commerce Times

I was reading Seth Godin’s blog post a few days ago about “the magic of low-hanging fruit” and was reminded of the power of fixing low-hanging fruit when redesigning your web site.

You see, when we perform web site assessments, the first thing we look for is low-hanging fruit. Often, fixing these small, easily identifiable issues requires little effort and produces a big return.

If you think your web site is fully-optimized, think again. I’ve yet to work on a site that doesn’t have some small issues that can be easily fixed. Understandably, some companies are reluctant to make changes. I’m currently working with a client whose site won some major awards in the early 2000′s (“back in the day”). They conducted rudimentary usability research and had a great site, but they haven’t changed anything but content since.

Now, years later, they’ve hired me to do a web site assessment. They are understandably reluctant to totally overhaul their once award-winning web site. In addition to needing some design updates, this site could benefit from fixing some low-hanging fruit to significantly improve their bottom line.

The most dramatic example I have of fixing low-hanging fruit is an e-commerce client I had about 2 years ago. The product images on his product pages were so large that they took up a normal customer’s entire screen. By shrinking the image and moving all pricing information near his add-to-cart button — all of which took 2 hours to change — site revenue improved over 60%.

I encourage you to contact us — we can identify what changes should be made to your site.

I’ve had quite a few clients and prospective clients call and ask, “What is a good conversion rate?”¬ù and “What is a good shopping cart abandonment rate?”¬ù

While the Fireclick Index can give you the average conversion rate and shopping cart abandonment rate for your general industry, many web sites have intricacies that make them different from the “average”¬ù site. Additionally, many smaller web sites process e-commerce transactions through “canned”¬ù e-commerce systems (like Miva Merchant, Yahoo Merchant Services, osCommerce and others) and either can’t or don’t customize the checkout process.

My answer to the question of a “good”¬ù cart abandonment rate or conversion rate is to re-frame the question. Rather than asking what a conversion rate or cart abandonment rate should be, the question you should ask is “What can I do to my web site to improve the conversion rate and cart abandonment rate?”

I tell clients to use the Fireclick Index to get a general rule of what their e-commerce conversion rate should be, then compare it to their actual conversion rate. Is it close to “average,”¬ù or is it not in line with the average for your industry?

Once you answer that question, the real question is how you improve your conversion rate. We answer the question of how a site can improve by performing a web site assessment, which is an exhaustive analysis using qualitative and quantitative data, including testing a site with real customers. This helps uncover issues with web sites that make them easier to use, improving conversion rates.

So rather than asking “What should my conversion rate be?”¬ù or “What should my shopping cart abandonment rate be?”¬ù ask instead what you can do to improve it.

A Harris Interactive study found that online retailers become more deal-conscious during a recession, and one in three people say that they will use coupons and discount codes more frequently.

People are equally as likely to search for deals online as they are in-store, so promoting coupon codes on an online store’s homepage or as a private sale via e-mail could be very effective if sales start to slump.

Read the full study at RetailMeNot.com

The State of Retailing Online 2008, the annual Shop.org study conducted by Forrester Research, suggested that online retail sales will be a bright spot in the overall retail landscape, with online retail sales expected to climb 17% this year.

Online retailers are struggling to balance acquisition activities with retention activities, and search engine marketing remains the most effective way for online retailers to connect with new customers.

Online retailers are also starting to take notice of social media — over half will focus on promoting in social media spaces in 2008. Social media efforts have been effective in promoting branding online, but less effective at driving revenue and sales.

For more, read the study at the Shop.org web site

Normally, abandoned shopping carts make e-commerce retailers frown. Not in this case, however. Check out this video on You Tube and you’ll have a whole new view of the abandoned shopping cart (and a good laugh).

Whether you buy into it or not, there’s a lot of recession talk in the news today. Marketers and business owners consider curbing spending during a recession, which means that there’s often less to spend on online marketing.

There’s an easy way to improve your online sales to compensate for the lack of marketing spending. Recession proof your online marketing by focusing on your web site’s conversion rate. Whether your web site generates leads or sells goods/services, every web site could benefit from improving conversion rates.

It could be your web site’s usability or just your e-commerce checkout flow, but I’d be hard-pressed to name a site that can’t squeeze an additional 10% of revenue from the site by optimizing it.

Also, search engine optimization is a good way to improve your web site’s long term position in search engines, giving you free traffic over time.

There’s been a lot of convincing research released in the past few months around customer ratings and reviews. Clearly, web site customers find ratings and reviews useful and not only rely on them to make purchase decisions — they also participate and share their own experiences. Here are a number number of recent articles and blog posts that discuss customer ratings and reviews:

Forester: User Ratings Top Consumers’ Online Wish Lists

User reviews and ratings were the most-asked-for web site content and functionality, beating even coupons/special offers and price comparison tools.

Deloitte: Companies Must Learn to Compete in a More Transparent Age

User ratings and reviews are having a “considerable impact on purchase decisions.” Sixty-two percent of shoppers read customer-generated product reviews when shopping, and nearly 80% say the reviews have a direct impact on their purchases.

MarketingCharts.com: User Reviews a Must for Retail Websites

98% of surveyed shoppers read the reviews on e-commerce websites prior to purchasing. Many shoppers spend over 10 minutes reading reviews before making a purchase decision.

PowerReviews: New Study Analyzes the Positive Effect of Online Reviews on E-Commerce

Internet merchants say that customer ratings and reviews:

• enhance the customer experience
• ease the burden on customer service by answering many basic product questions
• improve trust and loyalty because of their unbiased nature
• are mostly positive
• are best utilized on the product page

eMarketer: Customer Reviews Increase Web Sales

Customer ratings and reviews increase site traffic, conversion rate and average order size. They also improve customer loyalty/retention and improve search engine optimization.

As you can see, adding customer reviews and ratings to your e-commerce site is not just a helpful tool for customers to interact with your site — they lead to purchase decisions.

You probably read this headline and scratched your head. No, the flu bug that I’m still getting over isn’t speaking to me — your customers really can help design your site. But don’t send them an email asking them to buy Photoshop just yet… Even though your customers know nothing about effective web design, there are two ways they can help you design your site.

The first is covered in GrokDotCom’s recent blog post about A/B testing. The premise is that your designer can post two versions of a page or page template, measure results and keep the page that works the best. This way, you enable your customers to indirectly tell you what they like best. Continually testing new designs doesn’t have to be time consuming or costly — it can be as easy as changing the placement, size or color of a button, or just pulling important copy out of a paragraph and making it a headline.

Second, you can conduct a usability test of your site with customers. This can be done in a lab (which can be a very expensive option), or you can test your site with remote users. There are some new options in the remote testing arena that are promising, especially for sites that have never been tested before (and nearly 77% of online retailers don’t test their sites). Remote testing, while less costly, will identify “low-hanging fruit” that you can easily fix.

No matter which you choose, you can let your customers design your site through their feedback and through the use of both quantitative and qualitative data.

The Get Elastic blog has published a good blog post on the size of add to cart and call-to-action buttons. Their advice in this article not only applies to product pages on ecommerce sites, but also to application design and screen design for non-ecommerce sites.

It’s worth a read to see how a designer works through the challenge of creating a page that helps customers navigate the web site.

Until now, the de rigueur of ecommerce web design says that add-to-cart buttons belong on the right column of the screen. Crutchfield.com is breaking that convention, though, by placing the add-to-cart button on the left column. Rather than showing a screen here, you can see one on Grokdotcom’s blog post or at Crutchfield.com.

Having worked at Crutchfield for a short time a few years ago, I know that there are some brilliant minds there, and that they used to test a lot of different screen designs. I wonder if this is a test or if they have seen some data that indicates that a left-side add-to-cart button works.

In any case, I can’t believe that an add to cart button on the right side is actually more effective.

It’s interesting to me that even sites that should be effective at e-commerce instead succeed at frustrating customers.

Case in point: I clicked over to the eTail 2008 web site last week to look at the agenda to see if I might want to attend. After browsing the site, I saw an advertisement selling the eTail 2007 conference audio presentations.

Interesting, I thought. I can listen to this past year’s conference in the comfort of my home or office. The advertisement led me to this page.

The page asked for my credit card information but made absolutely no mention of a) how much it costs, or b) what I get for my money. Also, the page said to “Complete this form to register for the webcast.” My expectation was that I would receive audio, which usually comes in the form of downloadable MP3s, not a webcast. There was also no mention of if my purchase would allow me to download the presentations to my iPod or if the presentations can only be accessed once online (a “webcast” is typically a streaming file viewed or heard online).

Due to the poorly conceived page, I immediately bailed to try to find that information elsewhere (unsuccessfully).

There’s a lesson in this experience. When selling something, clearly let customers know how much something costs before asking for their payment information. Additionally, you should briefly let them know what they are getting for their money. In the example above, the eTail conference folks might want to set my expectations of the price and product before asking for payment information.

Setting customers expectations before asking for their payment information is not only a best practice, but a way to reduce customer complaints when they don’t get what they expected.

Showing holiday shipping cutoff dates on your web site makes sense for many reasons. First, it sets the customer’s delivery expectation. Second of all, it will reduce the number of calls you’ll get asking if an order will be delivered by the holidays.

You should show this information in 2 places — the homepage and in checkout. I typically favor a rather prominent link on the homepage to a dedicated page that discusses holiday shipping. In checkout, you’ll want some messaging saying something like “Order by December xx to ensure holiday delivery.”

One thing we do effectively on the Virginia Favorites site is to list the estimated shipping date on every product page. This, combined with the holiday shipping information that lists cutoff dates, helps the customer determine if their order will arrive in time.

It’s November 1st, and believe it or not, many e-commerce sites are already seeing traffic and sales pick up for the holidays. In fact, one e-commerce client that I work with has already seen sales pick up by 30%.

As an online retailer, you want to sell as much as possible, especially during this key selling season. Today, we’re introducing a series of blog posts about optimizing your e-commerce web site for the holiday selling period. Many of these tips will deal with your web site’s design, while others deal with merchandising tactics and marketing initiatives.

So check back every day for some quick advice to improve your online e-commerce sales.

If you want to start your own e-commerce web site or you’re a web designer looking to start an e-commerce service for clients, there’s a 2-part article over at the E-commerce Times that’s worth reading. “Shopping Cart Options for SMBs” (read part 1 and part 2) details many challenges and considerations when looking for an onine shopping cart.

In my experience, all small to medium-sized businesses should look for the following in a shopping cart:

• Ability to fully customize the front-end including the checkout process. In other words, you need to be able to make your site look unique and be effective by changing the user interface. I’ve learned that the ability to change a button to a text link or move the add-to-cart button from one place to another within the page template plays a critical role in a site’s success.
• Extreme stability, meaning that the shopping cart responds quickly when a customer requests a page or conducts a transaction. If your customers try to order and your site doesn’t respond, you won’t make many sales.
• User friendly order management and product maintenance. Let’s face it, you need to be able to quickly maintain content and products on your web site without a manual or support team.

These three criteria are not exclusive — there are other considerations. With the perspective that a successful e-commerce project takes thought and planning up-front — especially during software consideration — I can’t underscore enough the importance of initial project consulting between the client and the consultant.

To make a good shopping cart selection, we consultants need to know how you do business, how you process orders, how your fulfillment works, your accounting process, and what your customers expect from your business. Every e-commerce client is different, and there are dozens of shopping carts to choose from. What works for one won’t work for another, and that’s why shopping cart software selection is so important to an e-commerce site’s success.

For a long time, online retailers have focused more heavily on technology, logistics and merchandising than the design of their web sites. That’s not to say that retailers haven’t placed any emphasis on design, but the number of retailer redesigns is trending upward, and the focus of these redesigns is on better product organization and improved navigation according to Internet Retailer.
Some interesting points from the Internet Retailer study:

• 60.3% of merchants have redesigned their e-commerce sites in the past year
• Besides better product organization and improved navigation, site search and product reviews and ratings are top design goals
• Survey respondents say a typical e-commerce redesign takes from 3-18 months
• Only 56% of retailers get customer feedback before or after their redesign

Though many retailers are redesigning their web sites, I’ve found that many are failing to incorporate basic e-commerce usability best practices.

Food company Kashi recently overhauled its web site to include more social and community functions. The new site looks great from an aesthetic standpoint, and the site sports different ways for health-minded customers to communicate with the company and among themselves. But Kashi’s site falls short on selling its product online by ignoring many e-commerce usability best practices.

For example, if you browse into their Country Cheddar crackers page, you’ll see an “order now” button next to the photo of the Country Cheddar crackers. There’s no price or availability/shipping information shown next to the “order now” button. Click “order now” and the resulting page doesn’t let me order Country Cheddar crackers, but instead offers three options — a 4-Pack TLC Sampler, a TLC Crackers Mixed Case and a Custom Cracker Case (which has no explanation of what a “custom case” is). Rather than getting more granular, they have presented more options than I expected and made my choice to buy that much harder.

PetSmart.com also re-launched their web site, but at the most common screen resolution on some browsers I tested, the dropdown menu for “Dog” continues down past the bottom of the browser window, rendering the hidden options completely inaccessible.

It’s good that online retailers are paying more attention to site design, but many of them still fail to concentrate on the basics — effective communication of their value proposition and e-commerce usability best practices.

Amber writes in with the following question:

“I was just wondering whether you could provide me with just some brief stats on expected response rates/conversions from a campaign directing them to a specific landing page as opposed to a homepage/product page on a website?”

My answer follows:

It would be tough to generalize that landing pages would improve your conversion rate because landing page design, which is a discipline all it’s own, affects conversion rate immensely.

One factor to consider is where the landing page receives traffic from. You’d have different content for Google Adwords landing pages than you might for other ads you might run (say for instance, landing pages for e-mail marketing campaigns). I would also recommend having different landing pages for each of your Google Adwords campaigns.

The key to improving your conversion rate is to give the person browsing your website information that is extremely relevant to the information they were seeking before visiting your site. Combine that with sound graphic design principles and your landing pages will certainly convert customers better than a homepage would.

One last note — sending search engine traffic to a product page can be an excellent tactic when their search specifically describes the product that you’re selling. In this case, the product page should act as a landing page.

Thanks for the question, Amber.

Tomorrow night, I’ll be on a panel with Patrick Bozeman (LeadFoot Designs) and Frank Carlomagno (Kinetic) discussing e-commerce at the monthly Refresh Richmond meeting. This panel will discuss the front-end, back-end and strategic basics of a successful e-commerce site.

I’m planning to throw out two topics:

• “My client wants e-commerce, now what?” will cover the strategic aspects of planning an e-commerce site for a client.
• Design philosophy for a successful e-commerce site, including wireframe prototypes, design considerations and page real estate.

If you’re a designer in Virginia, come down to the Work Factory in Richmond tomorrow evening for the discussion (directions and meeting details can be found on the Refresh Richmond web site). Bring your questions!