What Makes A Good Conversion Rate In Marketing?
When it comes to conversion rate, what is the magic number?
No, I’m not talking about how many euros you can get for your pound, I’m talking marketing. Duh.
What’s the rate you should be aiming to achieve in order to make your boss, the client and yourself happy? What will make you feel proud?
Well, hold on to your metrics, because Wednesdays are about to get GIANT.
Hello, my name is Ant and welcome to Giant Wednesday, the only place to be to discover the wonderful world of digital marketing. Don’t forget to subscribe to our channel and post your comments below.
Ok so we’re here to talk about conversion rate so let’s quickly cover off what it is.
Well, to start with is something I like to call a “most wanted response”.
It’s often misunderstood that conversion rate has to be based on a sale you’re making or action you’re driving. But that’s not true!
Ultimately, it’s likely that whatever you’re tracking will be about delivering some sort of business value and this isn’t always e-commerce based.
That’s why we talk about the MWR or the “most wanted response”.
This is the action you feel is most valuable to you and your needs, but most importantly, what you want users to do when they get to your site.
This could be downloading a whitepaper, filling in a form, calling through to make an enquiry and of course, it can be something e-commerce related such as making a sale.
The most important thing when setting a conversion is to ensure that whatever you choose has business value and is worth measuring. Something that is agreed across all stakeholders that you’ll be reporting to.
If you don’t agree that it’s a valuable metric to report on then what’s the point?
Make sure what you track is something everyone values from so not to waste an opportunity.
Once you’ve figured out your most wanted response, it’s time to set up a conversion point, a goal or an event in Google Analytics and start tracking.
This is the bit we all love, and once you start tracking you can gain a better understanding of what is working and what could be done better. That’s the point, right?
But anyway, you’ve stuck with me, so now to actually delve into what a good conversion rate is.
And, I’m sorry to have strung you along… but the answer is there is no such thing as a good conversion rate.
Now don’t up and leave, understanding why is very important
Conversion rate is not static. It’s not fixed and it should always be progressing and developing.
I mean sure, a conversion rate of 100% would be beautiful – but we’ve got to be realistic and if you’re measuring a metric at that value then it’s probably not the right one…
Now it’s not to say there isn’t a required baseline which may be understood as ‘good’ if you achieve it, but that will be absolutely unique to your business and your commercial model.
An example to illustrate my point…
You own a website that sells red shoes and are spending £100 a day on pay per click advertising to drive roughly 200 people to your site.
Every time you sell a pair of shoes there is a margin of about £10.
To get that margin you’re spending £100 to send those 200 visitors to your site. So you need to make at least £100 to break even.
That’s the equivalent of ten sales, so if you know that you need to achieve ten sales from 200 visitors then the required conversion rate is 10/200 as a percentage so that’s… 5%!
In this instance, you could very well say that is a “good” conversion rate target to start with. But the reality is that you should never settle because all you’ve done is set a benchmark.
When we do talk about “good” conversion rates, we talk about the trend. Is the conversion rate developing and progressing through optimisation? Is it up year on year?
On top of this, you’ve got to be respectful of the things that will impact your conversion rate, positively and negatively.
For example, competitors entering the market, your prices changing and adding delivery charges, could all have a negative impact on your rate so you’ll need to continually adjust your benchmark.
So, in true marketing style, you’ve got to optimise. Here are three tips for you.
Number 1: Keep it simple.
Users don’t like to work hard – make the process to complete your most wanted response as easy and as quickly as possible.
Number 2: User experience.
We all like to have good experiences online whether that be through site speed or design, so keep these in mind to help people convert and encourage return visitors.
Number 3: Test and test again.
Any form of optimisation and usability testing should not be a one-off thing. Change something, track the change and review the results. Make a decision on success and keep testing.
So yeah, sorry but there is no such thing as a good conversion rate. There’s just a drive to constantly strive to be better and better and better.
That’s it for today, go forth and comment your views on this and give us a like and subscribe to see more great digital and marketing content every week.
Thanks for watching, and we’ll see you next week for another GIANT Wednesday.