"My conversion rate is 'X%.' Is that good or bad? What is the conversion rate at other companies? What is the industry standard?"
by Daniel Burstein, Director of Editorial Content
In the MarketingSherpa Ecommerce Benchmark Study survey, we asked:
Q. What is your average conversion rate for ecommerce sales (%)?
When we evaluated the 2,912 responses, we saw that overall conversion rates were most frequently less than 5%, with many responses below 1% (and even a few, incredulously, approaching 100%).
This is not to say that your company's conversion rate should be any of those numbers, but it gives you a general idea of how other companies are performing.
Beyond focusing on specific conversion rates of competitors, here are a few important principles to keep in mind about conversion.
Yes, understanding the competition's conversion rate can be insightful.
But, the more important question is: How can you improve your company's conversion rate?
It may come from reducing steps in the funnel and improving messaging, which worked for this Benchmark Study survey respondent: "We have seen improvements in the conversion rates by reducing clicks and improving calls-to-action (CTAs). Instead of 'View,' we used 'Buy' and that proved to be a stronger CTA for conversions."
Or, you might increase trust and credibility in your overall company's value proposition: "Small companies have very low conversion rates so creating a strong, recognized brand, that can be trusted, from scratch, is a must."
Or (and these should be used sparingly, with a bigger focus on improving your product's value proposition and the messaging of the value prop), by using incentives, as this Benchmark Study survey respondent indicated, "It is difficult to increase conversion rate without using incentives like discounts and offers."
How many steps do you absolutely need in your checkout process? Do customers have to register for an account to purchase?
There may be bigger strategic reasons to take some of these steps that hurt conversion, but understanding their impact is helpful.
Even if there are business reasons for using them, it doesn't necessarily sound the death knell for conversion, as indicated by this Benchmark Study survey respondent, "Our conversion rate is surprisingly good for a website that requires users to register before checking out."
This gets to the basics of channel selection — you do not want to invest in "hot" or buzzworthy channels; you should invest in the channels that help impact your specific customer's decision-making process.
Once you gain an understanding of these channels, you may decide to make investments many steps up the customer's buying journey from purchase to help increase final conversion, as indicated by this Benchmark Study survey respondent:
We have three key items we check almost daily:
- Number of visitors
- Conversion rate
- Average order value (AOV)
We see that number of visitors is increasing; conversion rate and AOV is more or less stable. By far the most successful marketing instrument is our weekly newsletter with some special offers. That boosts sales dramatically. So we are also quite keen on having customers sign up for the newsletter.
It has several conversion rates. The more granularly you understand those conversion rates, the better you can improve them. There are conversion rates for individual products, of course, but also for different customer segments and channels as well.
As this Benchmark Study survey respondent remarked, they experience different conversion rates for different devices: "With a classic design, conversion rate is 3.2% on PC, 1.4% on tablet, 1.05% on smartphone."
MarketingSherpa Ecommerce Benchmark Study — Made possible by a research grant from Magento, an eBay company
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