In this example, the organisation seems highly efficient in attracting visitors to the site,
but less efficient at converting them to action – future marketing improvements could be
directed at improving this. Some organisations will measure different conversion rates for
different segments and for different goals such as generating new leads, responding to a
sales promotion or signing up for a seminar. Analysis by Agrawal et al. (2001) suggests that
the strongest sites may have conversion rates from visit to sale for e-commerce sites as
high as 12%, as against 2.5% for average sites and 0.4% for poorly performing ones.
Clearly, measurement of the conversion rate and taking actions to improve this rate are
key e-marketing activities. The marketing communications techniques used to increase
these conversion rates are considered further in Chapters 7 and 8.Evaluating demand levels
We will now review each of the following three factors that affect demand for e-com-
merce services in a little more detail, starting with consumers in the B2C marketplace.1 Internet access
E-commerce provides a global marketplace, and this means we must review access and
usage of the Internet channel at many different geographic levels: worldwide and
between and within continents and countries.
On a worldwide basis, a relatively small proportion of the population has
access to the Internet. The compilation of statistics prepared by ClickZ
(www.clickz.com/stats/web_worldwide) suggests that despite rapid growth from the mid-
1990s to about one billion users by 2005–6 this only represents less than 20% of the
global population although there are initiatives such as the $100 PC that are intended to
redress this.
If we look at individual countries, the proportion of consumers and businesses access-
ing the Internet is startling. If we take the United Kingdom, National Statistics (2005)
showed that by 2005 over 55% of households had access to the Internet. To look at the
scale of variation between different countries and continents complete Activity 2.4.
When you complete this activity, you will see that often growth will plateau in most
countries since there is a significant majority of the population who do not wish to orCHAPTER 2· THE INTERNET MICRO-ENVIRONMENT
Figure 2.14An example of a conversion modelTarget audience (Q 1 ) = 200 000 surfers
Attract (Q 2 ) = 100 000 site visitors
Attraction efficiency (Q 2 /Q 1 ) = 50%Site visitors (Q 2 ) = 100 000
Engage (Q 3 ) = 50 000 active visitors
Engagement efficiency (Q 3 /Q 2 ) = 50%Active visitors (Q 3 ) = 50 000
Convert (Q 4 ) = 500 take action
Conversion efficiency (Q 4 /Q 3 ) = 1%