In our recently released MarketingSherpa 2012 Website Optimization Benchmark Report, we asked about average conversion rates …
Q. Please write in your organization’s average conversion rate.
It’s human nature to see a number and to instantly think of it as a fact, so let me first briefly mention the limits of numbers. Just because you see the numbers above, don’t assume that all of your, for example, media and publishing competitors are getting 10% conversion rates for every offer.
These numbers are simply meant to give you a general idea of how certain industries are fairing as you work on your own conversion rate optimization efforts.
“Where ever you are, you should also try to figure out how you can improve your conversion rate 5-10% monthly,” is how Bryan Eisenberg, Managing Partner, Eisenberg Holdings, put it in “Average Conversion Rate by Industry 2012.”
The glass is half empty
Dave Hubbard, CEO and founder, Marketing Outfield, spoke more about the need for conversion rate optimization. After all, you are already investing all of the resources – whether it’s a PPC spend or simply social media effort – to get people to your website; any conversions you lose are hurting your overall marketing investment.
“When over 90% of the visitors to your website leave without becoming a registered prospect or customer, it clearly shows a huge missed opportunity,” Dave said. “After all, by visiting your website, these customers have demonstrated initial interest in your company or service. In this post, I share some ideas for closing the gap, but I’m continually looking for more ideas from others.”
Exactly what (and when) is a conversion anyway?
Of course, to optimize a conversion rate, you first have to define what exactly you mean by conversion. After all, a conversion can be many things. That definition then leads to another challenge … when and where exactly did the conversion take place?
“A responder may have received several touches, and only after previous touches do they respond to the current contact. I realize this will get us into an attribution discussion, but it’s simply to illustrate that the conversion rate for the current contact may be overstated,” Prugh Roeser, founder, LeadLogix said.
As a result, Prugh usually tracks conversion rates at two levels:
- The individual touch
- The entire campaign
“For many, I know the two are the same. But for those whose campaigns are comprised of multiple touches, it’s the campaign level that really matters since this rolls up all the variables that may affect the individual touches,” Prugh said.
Focus on profit, not conversion
In the end, conversion rates are only important to a point. They may help you optimize certain stages in your funnel, but they should not be the ultimate barometer of marketing success.
“In Denmark, we have a saying (not sure how well it translates): If you’re standing with one foot on a hot plate and the other in a refrigerator, it doesn’t mean that on average you’re okay,” quipped Søren Sprogø, owner, Afdeling 18.
“It’s the same with average conversion rates, especially when you start comparing them across websites/industry!”
Søren went on to share an example …
Your conversion rate very much depends on where you are getting your traffic from. For example, brand-name bid traffic on PPC networks tends to have a high conversion rate, but costs a lot. Whereas, organic traffic from Google has a low conversion rate, but cost a LOT less. And then there’s email newsletters, which are cheap and have a high conversion rate (depending a bit on where you got the email addresses from, of course).
So want a high conversion rate? Cut out the low-converting channels (read: Block access for the GoogleBot via a robots.txt. Or worse, make your website entirely in Flash), increase the high-converting PPC bids (read: Bid $20 per click on your brand name, nothing else), and make sure you make some killer newsletters (read: Give out 20% discount codes in each and every newsletter).
Or read my little story for a better explanation.
So, want a better conversion rate than all the other competitors in your industry? Use these simple tricks. You won’t make any money and your revenue will greatly suffer, but you’ll have a kick-butt conversion rate.
Related Resources:
Conversion Optimization: Tactics your peers have used to gain higher conversion rates
Marketing Research: Average conversion rates
Conversion Rate Optimization: Minor changes reduce cost per conversion 52.9%
263% Higher Conversion Rate: How reducing anxiety helped one company improve conversion rate three-fold — MarketingExperiments Web clinic replay
The real question is – what is the visit-to-lead conversion rate. A conversion can be anything. I’ll tell you this – the visit-to-lead conversion rate is NOT 10% for a financial services firm. Yeah, yeah, yeah – how do you define a lead? Smart people know what I mean 😉
What exactly does MarketingSherpa mean by percentages stated?
Signup conversion rate or sales conversion rate? Or something else?
Browse to buy conversion rate is much lower too.
vKris,
Thanks for the question. The data is determined by what the marketer answering the question considers to be his or her company’s average conversion rate. We determine this information from our benchmark surveys. If you’d like to learn more about how we compile this data, feel free to explore our 2013 Email Marketing Benchmark Survey, which is currently open.
Thanks for your observation Ben… I completely agree!
We work with professional services firms, and when I saw a “conversion” rate of 10%, my immediate reaction was astonishment, because like you, I look at visitor to lead conversions. I have no idea of how the authors of this report are defining “conversion”, even after reading the explanation — more than once!!
I would love to talk to (or learn from) any accounting, consulting, financial services or legal marketer who is getting one out of 10 visitors to fill out a form on their web site!
Completely agree with Ben
I look at our site’s conversion rate a lot too (B2B S/W sector, big brand). Our conversion rates for email campaigns are high (>10%), but for organic site traffic much lower (2.5% on a good day) – as expected. The key is to measure conversions TRENDS from all your important channels & focus optimization to achieve goals for each.
I’d love to see an industry standard conversion rate methodology. For now, I take this MarketingSherpa chart with a big grain of salt.
The key takeaway is setting your own benchmarks and continuously improving upon them. This means the chart referenced here is practically useless, since conversions contain so many variables. We constantly have clients asking about (home builder) industry averages, and we continually assure them that so long as they are effectively measuring/optimizing their own conversions (impressions>visitors; visitors>leads; leads>appointments; appointments>sales) they will be increasing sales and improving ROI.
Hi Daniel,
I really enjoyed this post, particularly the Danish proverb about having one foot on a hot plate and one in a refrigerator. I stole it and put it in my email signature 🙂
I totally agree that fixation on conversion rate is a mistake. I had a similar discussion with the CEO of the company where I am an in-house SEO when the owners were trying to determine a bonus structure for me. I told them that tying my incentives to things like conversion rate just wasn’t a wise move because I could conceivable drive 3 people to the site and if one of them converted we’d have a 33% conversion rate, but the company would go out of business.
Web analytics guru Avinash Kaushik advocates that there is only one metric that all businesses should be fixated on and that no benchmark should ever be accepted as satisfactory for and that is bounce rate. I take that one step further (and he’s probably said this too) and would suggest that both bounce rate and shopping cart abandonment rates (in the case of ecommerce) are things that every business should always be working to improve. Arguably, until both of those are “0” there is work to be done.
Thanks for the great post!
These conversion rate comparisons by industry are meaningless without a description of what was counted–and what was excluded.
Were conversion goals comparable? Were the participants self-selected? Did you have a representative sample from each industry?
This is so broad as to be misleading. “Conversion” can mean almost anything. Converting from what source to what result?
It would only be helpful if we knew distinctions by source (paid search traffic, paid content traffic, unpaid traffic, email newsletter – all are very different) and by result (“convert” to a newsletter recipient, to a “registered” visitor who gets a white paper, to a discounted trial offer, an actual purchase).