Staying competitive on the giant and ever-growing e-commerce platform presents one of the biggest challenges for Amazon sellers. Everyone is trying to find the best possible way to fight for their spot on the first page of Amazon, and they can’t achieve it without a good advertising strategy. Therefore, the primary goal of every advertiser on Amazon is to discover the most relevant keywords that will bring sales with high profitability.
In this blog post, we cover the topic of conversion rate optimization. Keep reading to learn about one of the ways to choose keywords that can increase your revenue while maximizing profits.
How to calculate a conversion rate?
Conversion rate or CVR is a percentage of conversions (orders) relative to the number of clicks for a particular keyword.
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For example, if a customer clicks 20 times on one shampoo product and buys five shampoos for the keyword “red hair shampoo,” the conversion rate for this keyword is 25% (5/20=0.25). Similarly, If a shopper clicks on the product once and buys two items, the conversion rate is 200% (2/1=2).
Now that you know what CVR represents, let’s continue toward conversion rate optimization.
Where to check the conversion rate?
As we mentioned above, you can easily calculate a conversion rate. But if you want to save time, you can find the conversion rate for each keyword used to advertise your products in the Advertising Report section.
For Sponsored Products – Targeting report and Search term report
For Sponsored Brands – Keyword report and Search term report
And for Sponsored Display – Targeting report
What’s a good conversion rate?
It’s hard to say what a good conversion rate is, as it can vary from seller to seller and product to product. Also, depending on the value of CPC (Cost Per Click), Search Volume, Views, Product price, etc., for some sellers, the keyword can be profitable with a lower CVR. For products where competition and CPC are both high, a good conversion rate is higher.
The average conversion rate ranges from 10% to 15%. However, this metric varies depending on the type of product you sell. A conversion rate below 8% is considered poor. So, take appropriate action as soon as possible. A low CVR can signal an issue with the product, listing, price, customer reviews, etc.
This brings us to conversion rate optimization.
How to increase your overall CVR?
There are different reasons why a low conversion rate may occur. So you can take various measures to increase this metric.
Consider if your product meets your customers’ needs and whether your competitors have a better offer. Also, evaluate if you can adjust your product’s price or characteristics.
Afterward, check if you can improve the product listing. This includes the title, images, product description, A+ content, reviews, etc.
If you use many keywords for advertising your product, you can increase the overall conversion rate by pausing all keywords with a low conversion rate. You need to be very careful here so that there is no drastic reduction in sales.
It is necessary to calculate which conversion rate is acceptable to you and consider other metrics such as ACoS, Impressions, Search volume, etc. If a keyword has a high ACoS and a low conversion rate, you should pause it.
Conclusion
CVR is one of the metrics that can tell you how successful a keyword is but don’t ignore other indicators.
As we explained, a good conversion rate is not the same for everyone. Besides the value of CVR, the most important indicator of productivity to observe is ACoS. You can easily achieve excellent account results, improve product rankings, and reach greater profitability by considering both metrics.
If you have many keywords with a very low CVR, you have a lot of clicks and very few orders. Also, a low conversion rate may indicate that the product’s keyword is not relevant enough or some competitors have a better offer.
In that case, your sales decrease further, and the product gets bad reviews. All of this can significantly jeopardize your success on Amazon. Therefore, take immediate measures for conversion rate optimization and ensure that you are on the right path to improvement.
If you need help with this task and other aspects of advertising on Amazon, we invite you to learn more about our Amazon PPC service. Visit our website today to book a free consultation.
About the author
Tijana Bogdanović is a Senior PPC Specialist at Sellers Alley and has three years of experience in Amazon PPC. Ever since she joined the team, she has shown excellent leadership skills and willingness to learn and expand her knowledge. These attributes helped her develop further and achieve significant results with Sellers Alley. Her previous work experience with Google Ads enabled her to adapt to the Amazon world with ease.
