A Little Goes a Long Way – How Small Increases in Conversion Rate Add Up

Sometimes a small month-on-month change in the conversion rate will seem disappointing given the gains that are often spoken about in conversion rate optimisation of 50 or more percent.

Not every site can be increased by large amounts straight away, but even a one or two percent change every month can add up to a significant difference to your company.

Consider a site getting 30,000 visits a month and 500 sales with an average order value of £16.00. We therefore know it’s converting at 1.67% and makes £8,000 a month.

With our conversion clients we recommend a minimum reinvestment of 20% of the improved gross profit into paid search to increase traffic to the site. Doing so will usually allow us to get results on the tests quicker and increase profits faster.

In the example I’m going to show what just one percent increase on the conversion rate each month can achieve. In the “real world” the increases often are far more dramatic. We’ll use an 25 pence price per click on the adverts.

Month	Visits	Sales	Conversion Rate	Earnings	Extra Sales	Extra Earnings	20% for PPC	Extra Visitors @ 0.25
Control	30,000	500	1.67	8,000.00	N/A	N/A	N/A	N/A
1	30,000	505	1.68	8,080.00	5	80.00	16.00	64
2	30,064	511	1.7	8,176.00	11	176.00	35.20	141
3	30,141	518	1.72	8,288.00	18	288.00	57.60	230
4	30,230	524	1.73	8,384.00	24	384.00	76.80	307
5	30,307	531	1.75	8,496.00	31	496.00	99.20	397
6	30,397	538	1.77	8,608.00	38	608.00	121.60	486
7	30,486	545	1.79	8,720.00	45	720.00	144.00	576
8	30,576	552	1.8	8,832.00	52	832.00	166.40	666
9	30,666	559	1.82	8,944.00	59	944.00	188.80	755
10	30,755	566	1.84	9,056.00	66	1,056.00	211.20	845
11	30,845	574	1.86	9,184.00	74	1,184.00	236.80	947
12	30,947	581	1.88	9,296.00	81	1,296.00	259.20	1,037

Looking at the table above, we see how increasing the conversion rate by just one percent a month over a year, and investing 20% of the increased revenue into paid search we go from earning £8,000 a month to £9,296.

Over the course of a year the website would have earned more than an extra month, £8,064 after the cost of PPC that still is an extra £6,451.20 by just increasing the conversion rate by one percent a month, from 1.67% to 1.88%.

If you took this data further increasing by a single percentage each month, then you’d see the following earnings over the next few years.

Year	Visits	Sales	End of Year Conversion Rate	Year Earnings	Extra Sales Per Year
Control	360,000	6,000	1.67	96,000.00	N/A
1	365,414	6,504	1.88	104,064.00	504
2	379,328	7,611	2.12	121,776.00	1,611
3	396,263	8,956	2.38	143,296.00	2,956
4	417,255	10,627	2.69	170,032.00	4,627
5	443,699	12,735	3.03	203,760.00	6,735

You can see that from just 6,000 a month by increasing the conversion rate by one percent each month for five years we’ve more than doubled monthly sales.

The methodology of constant testing as integral part of the way an online business is run needs only minor improvements to increase sales and profits dramatically.

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