Q: What can we do to increase our conversion rates?

A: This is the single most common question we get from online retailers at Web Analytics Demystified

Especially since conversion rates for many businesses appear to be stuck around 2-3%. Still, with many retailers breaking out of this rut something must be working--according to Nielsen more and more retailers have cracked double-digits, including Office Depot, ProFlowers, QVC, and Schwans. When you ask this question of a web analyst you have to expect a web analytics answer, so you won't be surprised when I say the three most important things any retailer can do to improve conversion rates are: analyze, optimize, and strategize. By analyze I mean developing internal competencies to actually analyze the data you're collecting about online visitor behavior. Analysis is vastly different from what all too many companies do today, which is more "reporting" than any critical exploration of the data. The key to analysis is having qualified and experience analysts on your staff--software doesn't analyze data, people do! Armed with your analysis the next step is to optimize--find the holes and start to plug them. Optimization is a hot topic right now and vendors like Omniture, Google, and SiteSpect who provide A/B and multivariate testing solutions are increasingly a retailer's best friend. Your analysis will tell you where to look, and testing technology will give you the ability to easily try alternatives until you land on the approach that works best for your customers. Finally, you need to strategize. Analysis and optimization without governance fails almost every time. Make sure someone senior in your organization is responsible for your web analytics efforts, and make sure they establish a clear governance model so everyone else can align around the changes you inevitably need to make. Nobody told you selling on the Internet would be easy, but a strong digital analysis effort can do wonders to help you understand where you'll get the most bang for your buck.