What is a good conversion rate?
The simpliest definition of a conversion rate is: A conversion rate is the percentage of prospects or leads that take a desired specific action.
The higher the percentage of people that take that action, the higher the rate. Thus, a this metric is a helpful way to gauge how a campaign, website or business is performing. Easy, right?
Let’s say you have people visiting your online shop and you want them to buy your products. The percentage of those visitors who end up buying from you is your online sales conversion rate.
Measuring Conversion Rates
Ultimately, you want people to be converting in the areas that actually benefit you, but you won’t really know what those areas are until you start tracking your site as a whole.
So, the first thing you’ll want to do is look to see what actions (conversions) are currently taking place on your site, and then determine what actions you want to take place on your site and make changes to connect the two together.
You’ll want to look for total number of unique visitors (called “Users” in Google Analytics) as well as the number of actions taken in a specific area – like overall sales in the month of July, or the number of new subscribers to your newsletter.
Then, divide and multiply: Conversions / Users * 100 = Conversion Rate
For example, if you had 125 new orders in July, and 8,000 unique site visitors for that month, your total conversion rate for sales would be roughly 1.5%.
It Depends on … What Industry You’re in
Look at any compilation of conversion data across industries and you’ll notice that some kinds of businesses are just luckier than others.
If you’re selling products online, you’ll have better luck selling software than sporting goods.
There’s no one all-encompassing source of conversion rate data for every industry. It’s worth doing a quick search for averages in your niche if only to give you a sense of what’s realistic.
But if you can’t find that data, I’d recommend not sweating it. Industry averages hide a ton of variation from business to business.
A brand new T-shirt company is likely to have different conversion rate patterns than a major department store’s site, which will have different conversion rates than a small but established clothing shop with a cult following.
If you do notice your business is actually experiencing low conversion rates, you know it’s time for action. Your goal is to have more visitors taking your desired action.
That way you can have more leads, more sales, more revenue – and, hopefully, increase your profit margin. Do not hesitate to reach out to us if your business needs help increasing its conversion rates.