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The Ideal Conversion Rate


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#1 kajax101

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Posted 26 August 2003 - 03:39 PM

I'd like ask what is considered an ideal conversion rate? For that matter what is considered an average conversion rate for visitors to a website? It's most likely this varies by industry, if anyone has any figures or stats. pertaining to this issue I'm sure many people would find them useful!

#2 kajax101

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Posted 26 August 2003 - 03:41 PM

Perhaps this article on conversion rates will be of use, it should at least ellicit discussion.

http://www.clickz.co...cle.php/3066871

#3 peter_d

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Posted 26 August 2003 - 06:04 PM

I'd like ask what is considered an ideal conversion rate?


100% <laughs>

3% is (apparently) average. You can get a lot higher if you target precisely.

#4 Grumpus

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Posted 27 August 2003 - 07:35 AM

I was gonna write almost exactly what Peter wrote. 100% is ideal. :)

Amazon has one of the highest at 7%. 3% (as of last Christmas, anyway) was about the average as Peter says.

G.

#5 kajax101

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Posted 27 August 2003 - 09:49 AM

Hmm 3% seems good. Although the author of the article I posted the above seems to think that 10% is attainable. This seems tough to me. I'd really be interested in some statistics on this one, as I must insist on my belief that average and ideal conversion rates should vary by industry.

#6 Grumpus

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Posted 27 August 2003 - 10:12 AM

10% is probably attainable in a "low info/best pricing" scenario. In other words, if I don't have to research the product before I buy it (i.e. The new CD from Hootie) and you've got the best price, then you may reach that 10% or even higher. Then again, CD's are probably a bad example because a lot of surfers are lookin' for the free download of the pirated CD and not to buy it, so you have to deal with those types muckin' up your ratios...

G.

#7 kajax101

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Posted 27 August 2003 - 11:36 AM

Sounds sensible.

I just wish that those of us working in the field of ecommerce had access to such information a bit more readily.

I guess slowly the internet is moving in that direction, becoming more regulated and employing more standard business practices.

Still for now we have to work with what we've got.

Anybody else care to give us their 'two cents/pence"

-Thanks

#8 Black_Knight

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Posted 31 August 2003 - 02:18 PM

Actually, the broad average for ecommerce sites is under 2% still! :shock:

Back when the original survey was done, around 80 percent of ecommerce sites had a conversion rate of less than 2 percent. Indeed, almost 70 percent of ecommerce sites were attaining a conversion rate of 1 percent or less. Sometimes far less.

A 3% conversion rate ought to be average, but it isn't. 3% is only an average for companies that have used SEM techniques successfully. I've rarely seen even a long-established site with long-standing SEO techniques break above a 4% conversion rate unless they have really taken on board a marketing specialist to look specifically at conversions, even if that means being more fussyabout the kind of referrals they try for.

Most SEO is geared towards only the first and easiest of the three primary objectives: to drive high-volumes of somewhat qualified traffic.

Using SEO to attract only highly pre-qualified leads, less volume but higher quality as sales leads, is a whole different objective.

#9 JohnScott

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Posted 31 August 2003 - 08:23 PM

A lot of conversion rates could benefit from the good ole' four P's. Especially promotions.

Time sensitive promotions work. Close-outs work. One of my clients sales more from the close outs page than all other pages combined.

#10 kajax101

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Posted 02 September 2003 - 07:59 AM

BlackNight,

Could you possible expand a bit on your interesting point. In other words, why do SEO professionals seem to not focus on the the 2nd and 3rd aspects of SEO. Also can you go into a bit more details as to the makeup of these sections?

-Thanks

#11 Black_Knight

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Posted 04 September 2003 - 05:23 PM

http://www.webmarket...objectives.html

There are 3 broad marketing objectives that SEO can directly tackle:
* Drive high-volumes of traffic (maximise exposure and PIs)
* Drive highly pre-qualified sales leads (maximise conversions and sales leads)
* Drive a branding campaign (maximise exposure of site in SERPs, even without click-thrus).

The why is simple - many SEOs have simply learnt by rote, and just don't understand that there are choices. They only even know option 1.

Option 2 goes for less traffic, but tries to get all the buying customers in that smaller more targetted traffic flow. This is useful where bandwidth is an issue, or simply where the conversions are the important part, and the company don't care about idle visits, only profits. Since this requires knowledge of sales and marketing, not just code, many SEOs can't handle this kind of campaign.

Option 3 doesn't look at traffic at all, it looks at branding and brand awareness. This may be where a company has a high-ticket item that doesn't sell every day, and the brand is more important to business than the sales. Think of luxury cars or boats. These will rarely be what people searching for cars or boats will buy, but being there, keeping the desire high, that's where the business comes from. Some products sell because the people who can't afford them desire them so much. People will buy things that make others envious. High profile helps that happen.

#12 chrisj

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Posted 19 March 2004 - 05:24 PM

Newbie, here...
How do you typically calculate a conversion rate?

100,000 page views to 50 purchases could be a .05% conversion rate.
10,000 visits to 50 purchases is a .5% conversion rate.
1,000 unique visitors to 50 purchases is 5% converstion rate.

Pretty large gap there depending on what statistic you start with. Since Google calculates conversion rate by clicks to purchases, is calculating it based on visits to purchases the best way? How does that compare to the reported 3% average coversion rate?

chrisj

#13 cline

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Posted 19 March 2004 - 05:59 PM

Sorry folks but I think you're all headed in the wrong direction with this. The problem is that the correct answer is counter-intuitive. Higher conversion rates are not better conversion rates.

The ideal conversion rate is that which maxmizes total profit.

Total profit is maximized when the conversion rate of marginal visitor = marginal breakeven.

If you do the math it becomes obvious that higher conversion rates are not necessarily better conversion rates. A good marketer will often dramatically improve a campaign by dramatically lowering the conversion rates.

#14 Grumpus

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Posted 19 March 2004 - 06:29 PM

Oh yes, yes, yes. We touched on this the other day when we were talking about how there are difficulties in Amazon's checkout process. I did a horrible job of explaining it in my first post, but by the end of the thread, I think I got it right.

G.

#15 Black_Knight

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Posted 19 March 2004 - 08:27 PM

Agreed. It is basically a chain, and the higher up the chain you go, the more you realise that the lower down links you once focused all your efforts on were missing the bigger picture.

Not every visitor is a lead. By focusing on just the visitors that are leads, you move up the chain.
Not every lead is a conversion. By focusing on just the leads that convert you move up the chain.
Not every conversion is high-value. By focusing on the high-value conversions you move up the chain.

Then just when you think you've gotten to the top of the chain, you realise that some of the visitors you stopped focusing on may have been leads after all if only you'd applied what you learned in moving up the chain on them. Likewise, you may now know how to convert more leads, so need to attract a widen variety of lead again. And so it goes. The chain is a loop. :D

#16 JJ

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Posted 20 March 2004 - 02:50 PM

We get approximately 2500 unique vistors/week, average 70 sales/ week.... For me , conversion is the measure of sales/visitors.......
This past week showed alot more visitors, fewer purchases....

We notice a direct correlation between the direction of Dow Jones and the rate of conversion.........

#17 invader

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Posted 20 March 2004 - 03:49 PM

What are good ways to track conversion rates ?
Non-PPC, i mean.

#18 Black_Knight

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Posted 21 March 2004 - 02:29 AM

Attempt to find attribution for every sale, signup or other action made, even across separate sessions.

Every time an action you consider 'value adding' is taken by a visitor, you should also know what first brought that visitor to you, and how many times they have returned since during their consideration time.

That means tracking cookies usually.

#19 chrisj

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Posted 22 March 2004 - 11:36 AM

It seems to me then, that finding an ideal conversion rate may be virtually impossible without an agreed upon calculation for the rate itself.

An average conversion rate would be helpful from a web design/shopping experience standpoint. All of my conversions may be the most profitable possible, but how do you scale it up? How do you know how much room for improvement you have until there is a comparative in the marketplace?



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