As an online retailer, your primary question is: how can I grow my customer base and increase sales? To do this, you need to achieve two key aspects: an increase in traffic to your website, balanced with quality of traffic.

This blog post will explain what traffic and its quality means, why it’s fundamental to grow your online sales, and how you can create a business strategy which will achieve it in the most effective and efficient way.

What is website traffic and why does it need to increase?

Traffic is the number of individual users who visit your website. To an online retailer, visitors to your website are potential customers. And so to increase your sales, you need to increase the number of these visitors.

For example, let’s say that on average you have existing traffic of 5,000 visitors per month to your website and your sales total for the same period averages £5,000. Your goal is to increase your sales by £500 per month - an increment of 10%. All other variables being equal, to achieve the sales increase you need to boost your traffic by 10%. So we can see in this situation, to reach £5,500 in sales per month, traffic to your website must increase from 5,000 visitors to 5,500 visitors per month.

This sounds fairly simple. The problem is that all other variables are not usually equal and the variable with the greatest significance is the customer’s intent to buy. For example, if you’re already receiving £5,000 sales per month from a regular average of 5,000 visitors, you’re highly likely to be dealing with a relatively stable number of repeat customers - those who already know and trust you and your products.

However, to advance past your current sales total, you’re highly unlikely to achieve the same ratio of website-visits-to-sales with new website visitors received. Potential customers, in the form of new website visitors, don’t know you and don’t have the same level of trust. Trust and loyalty takes time to establish, therefore the ratio of sales which can be expected from new website visitors is almost certain to be lower than your current ratio.

So we can see that to achieve a sales growth of 10%, your website is going to have to attract a lot more visitors than a 10% equivalent monthly increase. For this reason, in order to increase your sales, your first priority is to increase the volume of visitors your website receives.

The importance of traffic quality

Traffic alone, however, is not enough. If you increase your traffic to say 50,000 website visitors per month but the visitors aren’t buying your products, in reality, your online retail business isn’t growing. If 20% of your new visitors were buying your products, that would be a huge sales increase. The reality, however, is that the average figure of sales to unique visitors is just over 2%; 4% would be considered very good, and between 5 and 10% would be excellent. 10%+ may be achievable though this would be exceptional.

This percentage is known as the conversion rate - the ratio between website visitors to eventual customers - and it’s the common metric used to determine the rate at which your visitors turn into sales. High traffic quality represents visitors to your website with high purchasing intent: this means that the website visitor is on a path to buy a product, they know the type of product they require and they may already have the information they need relating to product features, product quality and price.

To achieve an increase in traffic and its quality means that before you begin a campaign, it’s important that you understand which type of website visitors you are aiming to attract.

Conversion rate and sources of traffic

Irrespective of the type of digital marketing, the conversion rate is crucial for online retailers. To increase sales requires time and money, whether you’re investing in sources of traffic such as search engine optimisation (SEO) or Pay Per Click (PPC), through to social media. It’s important that this is considered when making any investment in either money or resources to get a feasible return on your investment.

With the above in mind, this means that any effort has to consider who you are attracting to your website, by targeting the right potential customers in the most effective, most efficient and fastest way.

Make a plan to grow traffic volume and ensure its quality

1. Set your objective and investment

When making a plan to increase the volume of quality traffic, consider first your sales objective, which could be a target figure or a band between lower and higher amounts. Planning how much you want to increase your total sales is a necessary step to understand how likely the desired form of digital marketing will be to enable you to achieve your goal.

At the same time, consider the investment you would be willing to make, including time-cost as well as the procurement of advertising or additional tools. Even if a digital marketing strategy doesn’t involve direct advertising costs, it requires time-cost and the tools necessary to develop or implement content.

This investment value will be considered later alongside your sales objective to determine the potential sales and profit as well as the viability of your strategy to increase traffic and its quality.

2. Review of your existing website traffic and conversion rate

To determine the most realistic objective for your traffic volume and conversion rate increase, use your website’s current figures as a basis. You can access this data through Google Analytics, which you can apply to your website. If sufficient data is available, Google Analytics will present your site’s current monthly traffic and conversion rate.

Analytics Traffic Overview

 

Using Google Analytics, you can identify how much traffic your website is currently receiving per month, and how much of that traffic is converting to a sale. This data can then be used to guide your objectives and digital marketing strategy to help understand what is required to meet your ultimate goal: your sales increase.

If you have no data available to evaluate, for example, if your website is completely new, instead you can start from a consideration of your target customers within traffic sources, explained below.

3. Review the traffic source

In addition to the traffic volume total and conversion rate, you need to understand where the traffic is coming from. This is known as the traffic source. It could originate from existing PPC campaigns or organic traffic achieved through search engines; other sources include social media, a referral from other websites or email campaigns as well as affiliates where your site is promoted by third-party sites, as well as direct traffic, where the visitor has entered your website directly.

Google Analytics presents the source of traffic and conversions by percentage of the total traffic. This is an important factor on which to base your objectives, and therefore your digital marketing strategy as a whole because the source of the traffic informs where your sales come from, and how this could impact your campaign to gain more traffic at a higher quality.

Analytics Traffic Overview Highlighted Sources

Say for example that your website has a high volume of direct traffic, where the visitor has entered your brand name directly into a search engine or has entered your website address into the address bar. This shows that the visitor is already aware of your brand, probably your products too, and they may well be repeat customers.

As discussed earlier, new potential traffic will on average have a significantly lower quality and conversion rate, because new visitors are less likely to have awareness of your brand and by definition won’t have the same level of trust. This means that if Google Analytics shows that the majority of your existing traffic comes from direct sources, you should plan to require a far higher traffic increase relative to your existing traffic volume in order to achieve a sales increase.

For example, let’s say that your current site has a high conversion rate of 3% from 25,000 visitors per month, achieving £10,000 of sales. Should you wish to increase sales by 10% to £11,000, you would need to increase your visitor numbers by 30%, from 25,000 to 32,500 per month as new traffic is highly likely to have a lower conversion rate - a typical figure for example of 1%.

At the opposite end of the scale, perhaps your website already receives a high volume of traffic but has a low conversion rate, as is sometimes the case when selling very high-value products. This means that in effect, a large proportion of the traffic is ineffective relative to your sales total. The resulting tasks would be both to investigate if and how a proportion of that traffic could be converted, and how to increase traffic of a higher quality.

Evaluation of sources used by target market

Alongside evaluation of your website, consider your target market and which sources they are most likely to use. For example, if you’re selling business to business products, such as industrial components, social media may not be as well used or regarded by your prospective customers. Alternately, if you’re selling consumer products, such as clothing, various social media channels could be useful to trial in terms of posting content and advertising.

4. Review traffic growth potential

As with offline retail, market sizes are defined. This means that there are only so many people looking to buy the type of products you’re selling. Markets can grow (and of course, retract) but for most small to medium-sized online retailers, the sensible business strategy is to work with the possibilities presented through the current market size.

In the digital arena, the Google Keyword Planner can show the number of searches and individual searchers for particular product types by keyword descriptions used in the Google Search Engine. This can also be broken down to a local geographical area or country, as well as a global search figure. If you’re selling a common item, such as a bicycle, you can expect to join an already large market with many searchers and potential customers. However, if you’re selling unusual, bespoke products for a niche industry, or perhaps something that is very new and yet to be discovered by the masses, the potential volume of traffic is likely to be far lower.

This data impacts your original online sales objective and the likelihood of achieving it. For example, if you calculate that you need an increase of 1,000 visitors per month to raise sales by 10% but Google isn’t able to present data on the traffic volume, this means that the relevant searches are too low for Google to be able to represent the market. In this case, you would need to rethink your online sales objective and/or review other new traffic sources.

5. Review the competition

In the opposite case, your business may be operating within a market with an abundance of traffic. If so, that means a higher volume and higher strength of competitors and, as per the general rules of business success, your chances of achieving a share of the traffic and eventual sales depends upon aspects including the strength of brand and promotion, product quality, service including delivery and of course, product price.

Competition in selling online crucially demands the successful promotion and awareness of your website above that of other businesses within your market. Evaluation of your website’s existing traffic sources, as well as consideration of the sources of prospective customers, will help guide your decision of which aspects of digital marketing you should prioritise.

Whether you’re competing for increased quality traffic from organic searches, through to direct marketing such as e-mail, social media or Google Ads, it’s crucial that you evaluate the strength of the competition and the number of resources, including time and budget, required to compete.

6. Budget

The final part of the equation to consider is budget. Even if your digital marketing strategy revolves around content, such as organic search engine optimisation (SEO) and social media, you need to factor in the time and cost of resources. However, focusing on content alone, there are no guarantees of success in increasing your traffic or sales.

Digital advertising, such as Google Ads, provides far more clarity at outset about your expected return on investment, which makes it far easier and clearer to plan your objectives, and therefore makes it more likely to be able to achieve them. This is because with PPC it’s possible to calculate how much you need to spend in order to achieve your desired return - plus you can expect results in a matter of weeks, compared to six months or more when using techniques such as SEO. To understand more on why your online retail business should be advertising on Google, read the article How to advertise on Google - increasing sales for retailers.

Taking the monthly budget you can commit, you can then plan how to optimise it for the best return, including considerations on competitor bids and how high your bid needs to be to compete effectively. For more information, read the post Google advertising: how to set an initial budget, which explains how retailers should define their Google ads budget.

Traffic and quality: it’s all in the planning

Increasing traffic and its quality to the required level to achieve your online sales goals doesn’t happen by accident. It requires planning, which has to be considered before you begin implementing your digital marketing tactics.

If you have questions about how to plan your online strategy to increase traffic and its quality, contact us or call 01743 612 001.

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