Industry Average Conversion Rates: Do They Exist?
Just about every time that I talk to clients about conversion rates, I get the same question: "Well, what are the industry averages," And I give the most accurate answer I can: "It really depends." Needless to say, that's not the answer they're looking for. The complete answer is a little more complicated, and can depend on a few key factors. I'll discuss those factors and hopefully provide some tips as to how you can increase your own conversion rates.
Before outlining those factors, lets take a quick second to review the "conversion funnel." The conversion funnel is simply the process the user goes through to complete a desired action on your site. The simplest example of this is buying an item using an online shopping cart. Each step in the checkout process (filling out shipping address, billing address, credit card information, etc.), is a step in the conversion funnel. Once the user has reached the payment confirmation page, he or she has reached the end of the funnel and the action is officially counted as a "conversion"
And a conversion can depend on several key variables:
1. Age. Generally speaking, the older the target audience, the more likely they are to complete the checkout process. Younger users are used to processes being quick and easy. As a result, they expect this and are more likely to be deterred by a lengthy conversion process.
To capture as many potential converters as possible, regardless of their age, require only necessary information. LinkedIn models this principle well. Their "conversion" is defined as registering new users. To do this, they only require 4 pieces of information: First Name, Last Name, Email, and Password. Of course anyone who has used LinkedIn knows that there is much more to building a profile than those 4 components, but they are not required to open up an account. Once your account is created, LinkedIn prompts you to update your account by adding previous work experience, credentials, certifications, past education, etc. It will even display a gauge on the right hand side of the screen telling you the completion percentage of your profile. Their process maximizes conversions up front, and facilitates site engagement once users have converted. LinkedIn is an excellent model for community sites.
2. The Conversion Funnel Process Itself. Its important for the user not to be distracted during the process by any links that can take him or her out of the conversion funnel. You will sometimes hear this referred to as a "captive" checkout process. Digital Bungalow recently redesigned the Bob's Discount Furniture website with this principle in mind. Once you begin the checkout process of purchasing your item, the links that take you away from the conversion funnel disappear and you're not "distracted" with anything that doesn't move you down the conversion funnel. If you have an ecommerce site, take a look at the checkout process. Do you have any links taking you to other places on the site, or, god forbid, off-site? If so, get rid of the ones you can and monitor the changes in the conversion rate.
3. Do You Have Brick and Mortar Stores Too? This can bring down online conversion rates, however it doesn't mean that your site is performing poorly. The Internet has fundamentally changed the way we make purchases. A lot of users will use a site to get an idea of products, product features, and price before they exit the site and make the purchase at the store's physical location. If you own a shoe store and have a website, you will have a lot of visitors who use your site as a catalogue then visit the store to try on a the shoes and make sure they fit. Online conversion rates will be low, but that doesn't mean your site isn't effective.
There are ways to get a better sense of how effective your site is in increasing conversions. If you have a "contact" page that lists your store address, keep track of visits to that page as well. Its not as tangible as buying a product, but it shows the visitor's interest in visiting the store for a purchase. If you have a phone number on your site, keep track of mobile clicks on that link. On most mobile devices, a click on that link will initiate a call to that number. If you would like to get the most accurate reading of conversions, advanced analytics reporting software like Google Universal Analytics (a free reporting platform) allows for linking a database which tracks online and offline activity using a unique user ID.
4. Do you have a B2B site or a B2C site? Visitors for each of these respective sites behave very differently when it comes to conversions. First of all, a conversion for a B2B site can have a very different meaning than in the B2C world. A B2B conversion might be filling out a contact form or agreeing to receive marketing materials. For the most part, these types of conversions occur at a rate of around 1%, which is 3.5% lower than the global conversion rate as reported by Fireclick. It is worth noting that there tends to be less funnel abandonment on B2B sites. In other words, once a B2B consumer enters the conversion funnel he or she tends to follow through until the conversion is complete. It's more common to see funnel abandonment on B2C sites where consumers will use the checkout process to gauge the final cost of an item (tax + shipping are usually applied on the summary page right before the confirmation) before abandoning the checkout process and looking for an item cheaper elsewhere.
5. How do you define conversion? Technically, a "conversion" can be defined as anything. A conversion for a site that sells shoes is going to be very different than a conversion for a restaurant's website. A conversion is the goal for your website and most analytics tools offer a large degree of latitude in how they are defined. In Google Analytics, for example, a conversion goal could be a URL destination or spending a predetermined amount of time on the site. Conversions can even be defined differently within the same industry. Say Site X and Site Y are both websites for electronic goods. Site X is strictly an ecommerce site, while Site Y is a marketing website for a brick and mortar store. Site X would define a conversion as an ecommerce purchase, while Site Y might define a conversion as filling out the "contact us" form or clicking on the "email us" link. And depending how those conversions are defined, the conversion rates are going to be very different.
Bottom line: conversion rates can vary based on several variables. An "industry standard" might be published, but how well does that standard represent a benchmark you should be striving for on your site? When a client asks me "what is the industry standard?" I will tell them that conversion rates are best used as a comparison tool against your own site over time. The goal should always be to increase the conversion rate no matter where you start. If I were to reply and say that your site is performing 50% higher than the industry average, would you be content with that? Probably not. Our goal for conversion rates should always be to improve and drive more business no matter where your site stacks up relative to others.