The Correlation Between Search CTR and Revenue

November 5, 2022
Correlation between Search CTR and Revenue

With the recent boom in the ecommerce industry, it has become critical for small-scale business owners and online store owners to provide a streamlined shopping experience to customers. Helping customers easily find what they want is an important part of providing such an experience, and there are several advanced search engines today that are significantly better than their predecessors.

But how does one measure the improvement in search capabilities, and whether customers have really been directed to the products of their choice? Let’s find out.

Since the key purpose of any business is revenue generation, search click-through rates (CTRs) are a critical metric to monitor whether search engines are catering to the needs of ecommerce site visitors. Visitors using site search (i.e. the search functionality on a website) to navigate an online store and make a purchase is a sign of a well-optimized online store.

In this blog, we’ll dissect the importance of search CTRs in the ecommerce space, and how you can monitor and enhance this key metric to improve revenue: the end-goal of all marketing efforts.

What is Search CTR?

The term ‘CTR’ is most commonly used in the context of online advertising. In that context, a CTR is the number of clicks received by your ad divided by the number of times your ad is shown to someone. However, there is also a kind of CTR called ‘search CTR’, which is the click-through rate for site search results rather than ads.

Thus, the higher the search CTR for a search result, the more often people click it when it is shown to them. In effect, search CTRs are an indication of how relevant searchers perceive your site’s search results to be. The question that then arises is: how can online store owners improve search CTRs and generate more revenue? But before we touch on the topic of improving search CTRs, we need to discuss the correlation between search CTR and revenue.

The connection between search CTRs and revenue

As mentioned above, a search result that has a higher CTR gets clicked more times relative to the number of times it is seen by a site visitor. In addition, every time a product is viewed by a visitor, the likelihood that the visitor will buy that product goes up. 

Putting these two facts together tells us that if a product listing has a higher search CTR, then that product is more likely to sell. And that means that a higher search CTR will lead directly to more revenue. 

In addition, there is also an indirect way in which your overall revenue can be improved through better search CTRs. You can use CTRs to optimize your store, and even your marketing efforts, in a way that improves sales.

How? Well, let’s assume that your site search engine provides you with analytics on all the search queries used by your visitors, search CTRs, and purchases. By examining this data, you can identify inefficiencies and gaps in your store.

For instance, suppose there’s a product that is often searched for but that has a low search CTR. What does this mean? This means that even though many visitors are interested in that product, not many of them actually click the product link once they see it. This probably indicates that the title, description, or image of the product are not attractive enough. With this knowledge in hand, you can improve these aspects, which should improve the search CTR and hence the number of sales.

Similarly, a product might have a high search CTR but a low rate of purchase. This would indicate that there is something off about the product page: maybe the price or shipping rate is too high, the product isn’t available in enough colors, or something like that. Again, you can use this information to tweak the product page in various ways and see which changes have a positive impact on sales.

How online business owners can improve search CTRs

Understanding the correlation between search CTRs and revenue is a good start, but it is even more important to know how you can improve search CTRs. Here are some techniques you can use to improve search CTRs and increase revenue:

1. Ensure that listings are showing up based on the user query

The most obvious reason for low search CTRs is that a listing might not be appearing in the results of a search query that would be expected to produce it as a result. You can check and make sure that that is not the case; if it is, then you can take remedial steps such as changing the product details or metadata.

2. Improve rankings based on user signals

Modern site search engines can gather a wide range of user signals, such as their age, gender, location, etc. By tailoring search results and rankings on the basis of such signals, you can improve the relevance of your search results, which should improve their search CTRs.

3. Improve rankings based on product signals

Similarly, search rankings can also be based on product signals. In other words, products that are top performers according to certain criteria (e.g. revenue generated, ratings, etc.) can be placed high up in the search rankings. This will further improve the search CTRs for those products, and increase the revenue they generate.

4. Use AI-powered search engines

As far as ecommerce site search solutions are concerned, an understanding of the intent behind a query can make a huge difference to the customer experience. Natural Language Processing (NLP), a branch of Artificial Intelligence (AI), allows search engines to respond intelligently to human language. 

Such search engines can use synonyms and complex linguistic associations to produce the most appropriate search results to improve conversions. In addition, they can also make it much easier to personalize search results, leading to greater customer satisfaction and more conversions.

5. Use search engines powered by online machine learning

Machine learning (ML) is a powerful technique that allows programs to “learn” things over time. However, models based on ML typically require large datasets that they can analyze and learn from. Since large datasets can take some time to build, it can often take ML models a large amount of time to demonstrate a perceptible improvement in performance. 

A different approach to ML is what is called ‘online machine learning’. This is a bit like a real-time counterpart to standard ML: instead of training ML models on stale data, it feeds data to the model almost as soon as it is gathered.

Thus, if you use a site search engine that makes use of online ML, then it can fine-tune search results on the fly, as it will learn from every search that your visitors carry out. This should also improve search CTRs.

6. A/B test your content 

A/B testing simply refers to testing which of two alternatives accomplishes a goal better. You can use A/B testing to experiment with product pictures, titles and description, and various types of design elements or features.

7. Provide a better user interface (UI) and user experience (UX)

This can seem like a simple solution, but it should not be underestimated. There are various ways in which the UI/UX can be improved so as to improve search CTRs. For instance, in an ecommerce context, adding a small product image to each search result will allow shoppers to see products before they click on them, thus reducing the chances of them being disappointed and navigating away. Similarly, indicating the user rating for each search result can also allow site visitors to get some idea of quality at a glance.

Focus on your search CTRs to improve your revenue

To sum up, search CTRs are directly as well as indirectly related to your brand’s revenue generation. Directly, of course, high search CTRs will improve revenue, but indirectly, they will improve the ROI on your marketing efforts and allow you to optimize your store. 

For a powerful site search engine that can considerably boost your search CTRs, consider Zevi.  Zevi’s NLP-based site search engine empowers you to achieve the desired search CTRs for your business, and helps customers discover their preferred products, thereby driving revenues higher.