Conversion rates are always a hot topic in the world of marketing. One of the most widely asked questions is ‘what’s a good conversion rate?’ Well, let’s try and answer that question right now.
How to define a conversion?
A conversion, in marketing terms is a desired action carried out by the recipient of a marketing message. However, there are a number of different conversions that any given business may measure and use as a success indicator.
A conversion can essentially be anything, depending on what your overall goal is:
- If your goal is to build an email list, then a sign-up can be classed as a conversion.
- When the aim is to generate enquiries, then a form completion may be a conversion.
- For e-commerce websites a conversion is more than likely a sale, (revenue generated).
At the end of the day, a conversion can be whatever you want it to be. It’s even possible to count a page view as a conversion; you’ll often find awareness campaigns using this as a conversion metric. However, it’s not something that I would particularly recommend for a business aiming to push sales.
Working out conversion rates
It’s often easy to get caught up in working out conversion rates. People spend a lot of time looking into all sorts of data and metrics in a bid to work out their conversion rates.
Instead, you can look at it much more simply. Take the number of people that did something that you wanted them to do, then divide it by the number of people that you tried to get to do it. Hey presto, there’s your conversion rate.
Contextual conversion rates
Conversion rates are extremely contextual. For example, say there are two websites, one sells $1 novelty yoyos and the other sells luxury watches for $10,000. Both websites generate 1000 views each day and they both measure conversions by sales.
Despite a couple of similarities, it’s unfeasible for the luxury watch company to convert as well as the yoyo company due to the price difference in their products. It’s because of this that’s it’s so important to attach a value to your conversions; it’s especially important when dealing with an e-commerce site.
You’d think comparing conversion rates of two companies in the same industry would be comparing apples with apples. But that’s not the case at all. Each site has different traffic sources, and these traffic sources produce traffic of differing qualities.
You’d expect a much higher conversion rate from a well-targeted AdWords campaign than from say a ‘how to’ blog.
What is a good conversion rate for your website?
A good conversion rate is completely dependent on your goals. Conversion rates are not a competition, the only person in the race is you.
No matter what the ‘industry average’ is, or what your competitors are achieving is largely irrelevant. You have no control over this and it doesn’t directly impact your business; so don’t worry about it.
The way to measure whether your conversion rate is good, is to look at what it was last month. If your conversions rate is higher this month than it was last, then that’s a good conversion rate.
Aaron Watts is a marketing professional who works alongside affiliate marketing specialists Equinile in order to improve clients search rankings. He also has a keen interest in sports and local politics.