Relationship between Web Performance and Business Revenue

Published By
Ronald Kelly
Reading Time
4 Min

Sustainable growth in the revenue of an online eCommerce website can only be achieved by optimizing the conversion ratio, ensuring high-level web process functions, maintaining brand reputation, and seizing missed opportunities consistently.

The share of online revenue is surging across businesses worldwide, attributed to factors such as direct online sales, brand presentation, effective customer outreach, and various value-added features of services/products. In the USA alone, the number of online shoppers surpassed 200 million in 2015, constituting approximately 90% of all internet users, according to eMarketer research.

However, the rise in online shopping has brought attention to factors related to web performance that directly impact the number of online purchases and, consequently, business revenue. Microsoft Bing reports that web pages 2.2 seconds slower sustained over 4.3% revenue loss. Google, Inc. found an 8 million daily search decline with a mere 4/10th of a second slowdown in results. Additionally, 1 in 4 online shoppers abandons a website if it takes more than 4 seconds to load.

Research indicates that a 1-second increase in the Amazon website's load time results in a $1.6 million revenue loss. Generally, effective web performance optimization (WPO) increases eCommerce website revenue by more than 13%. This article discusses the factors related to web performance that directly impact business revenue.

1. Low Conversion Ratio

A low-performing website directly leads to a decreased conversion ratio, resulting in a substantial decrease in business revenue. Research shows that a 1-second faster loading time increased Wal-Mart's website conversion ratio by more than 2%. According to GlobalDots, the average load time for converted users is approximately 3.22 seconds. Websites falling outside this limit are likely to experience low or no conversion. Web Performance Today suggests that a 100-microsecond increase in webpage loading can boost revenue by about 1%.

2. Cart Abandonment

Cart abandonment is directly or indirectly related to website performance and design. A poorly performing website leads to reduced conversion and, consequently, loss of business revenue. Based on surveys of 31 major eCommerce companies over the past 5 to 6 years, BayMard reports an average cart abandonment rate of 68.53%. The top three technical reasons for cart abandonment, according to Shopify research, include complicated website navigation (25%), processes taking too long (21%), and website timeout (15%). A better performance and professional design significantly increase business revenue for all eCommerce/online businesses.

3. Existing Customer Retention

Customer satisfaction is key to retaining existing customers and converting website visitors. Research indicates that any website with more than a 3-second loading time loses over 40% of its traffic, with over 80% of that traffic never returning. A 1-second increase in webpage load causes a 16% decrease in customer satisfaction, according to the Gomez case study report by Aberdeen Group. This highlights that a poor-performing website cannot retain its existing customer base.

The loss of an existing customer base is a significant blow to reputation and, consequently, business revenue in the long run. Yottaa research reveals that 79% of unsatisfied shoppers due to web performance are unlikely to purchase from that site again. Thus, web performance's impact is directly proportional to customer satisfaction, influencing an increase or decrease in business revenue.

4. Reputation/Brand Damage

Brand reputation damage, as experienced by Volkswagen, is estimated at tens of billions, including an $18 billion capitalization shrinkage in just one day. The major reason for brand reputation damage for an online eCommerce website is poor performance. If a website underperforms, its online reputation will undoubtedly be damaged. A bad experience on your website is likely to be shared with more than four other people, leading to a negative marketing chain on the internet, and a decline in online business revenue. Ensuring your website performs well is crucial for maintaining a positive reputation.

5. Missed Opportunities

In today's fiercely competitive market, every single shopper is valuable, and missed opportunities inflict heavy losses on your online business. Factors contributing to missed opportunities include website outage, customer dissatisfaction due to poor website performance, and reduced traffic. According to Aberdeen Group, just a 1-second delay in page loading results in an 11% lower page views. Reduced traffic also impacts your search engine ranking, compounding the impact of bad web performance in terms of business revenue loss.

It is evident from this analysis that web performance is directly related to business revenue in this cut-throat competitive online marketplace.

How to Improve Web Performance?

Several important factors can help improve web performance and, consequently, business revenue:

  • Efficient use of an enterprise-level web monitoring service like eXpertStack to enhance web page performance and user experience.
  • Implementing a simple web design.
  • Content optimization (image, video, and audio).
  • Use of content data network (CDN).
  • Avoiding redirects and minimizing JavaScript.
  • Regular cleanup of codes.