Simply put, conversion rate is the percentage of visitors who take a desired action on your website. The calculation in most web analytics tools is conversions divided by total sessions.
A conversion could be an enquiry, purchase, sign-up, provide email address etc. These actions will be determined by your overall website goals.
So, what is a good conversion rate for your website?
Unfortunately, there is no universal ‘good’ conversion rate – it depends. Conversion rates are highly contextual because the rate at which visitors convert can depend on a huge number of factors. A top line list could include:
- The industry you’re in
The perceived value of cost for acquiring your service offer or product will have a profound impact on conversion rates. A high-priced service/product typically has a longer customer journey to purchase, (awareness > interest> desire >action) resulting in multiple touchpoints. The rate at which users convert during their initial website visit will most likely be lower compared to a small low-scrutiny offering.
- Your traffic source mix and quality of traffic
The intent to convert can also depend on the source of traffic your visitors came from. For example, social channels may bring visitors at the awareness stage whereas search users, who actively seek out your product/service, will have a higher level of intent to convert. Furthermore, if you suddenly get a huge spike in traffic from a spam referral site or recently launched a new TV ad then this will impact your conversion rate.
- Copywriting, design, user experience and usability of your website
These aspects will be significant factors on whether a visitor perceives your product/service to be useful, relevant, and of value. If your website copy doesn’t speak the language of your target audience and deliver a compelling message, then your proposition won’t be communicated effectively. Furthermore, if functional elements such as navigation, forms and site search aren’t clear or easy to use, then friction will occur for potential converters.
- Promotions, competitor activity, seasonality Conversion rate of your website is likely to increase during sale periods and price cuts. It will also vary if you have key trading period e.g. Christmas.
It’s important to be aware of external influences and where necessary make annotations in your analytics reporting in order to provide context. If one of your major competitors goes bust, make reference to this as it might be the cause of influx in traffic and orders.
- The devices your visitors are using
The rise of mobile and cross-device usage could also impact your conversion rates. Your website and landing pages need to be designed and provide a good experience on all devices and browsers. If there is a huge difference in the conversion rate of mobile vs desktop, then you’ll need to understand whether this is user intent based or whether there could be a usability/experience issue.
How should I assess my current conversion rate?
For our clients, we like to stress that a good conversion rate is a better one than they had compared to a logical time period. This could be 5%, 10% or 20% improvement month on month, or year on year.
In my opinion businesses shouldn’t worry about what’s a ‘good’ conversion rate. Ultimately, it’s about striving to make improvements to your marketing and website experience to deliver an uplift on the bottom line.
Conversion rate (CR) should not be looked at solely as a key performance indicator of your website.
It’s vital you always give context to this metric:
- In conjunction to CR always look at other key metrics. Examples could include revenue, average order value, return rate/cancellation rate, lead success rate (if your site’s main goal is lead generation)
- Analyse and compare the CR of segments to gather insight e.g. by traffic source, device, demographic, landing page
- Compare time periods and analyse trends over time
- Make use of internal knowledge. E.g. your recent marketing activity, known external factors, recent website updates or a/b tests, server outages
- Take into account anomalies and outliers in your data. For example, an unusual high volume of orders from one visitor could skew your data. This could lead you to make a decision off of faulty data
- Gain Insight from industry/competitor benchmarks where applicable
The downfalls if you're only focusing on conversion rate
A spike in your conversion rates isn’t always a good sign. Imagine that in November you got 100 orders from 5k visitors, a 2% conversion rate. Whilst in December you got 70 orders from 2.8k visitors, a 2.5% conversion rate.
Looking at conversion rate alone would indicate that December was a better month however, your revenue and traffic was much lower. So, in financial terms you’re not doing better and your acquisition channels are doing a far worse job getting people to your site.
The majority of your users won’t convert. Measure micro-conversions!
In conjunction to your main conversion action you always need to look at your micro-conversions. These are smaller actions your visitors can take that’s of value and/or shows potential buying behaviour. For example, sign up to your newsletter, read product reviews, download a brochure, engage in video etc.
If you assessed a marketing channel solely on its macro conversion rate then you may falsely underestimate its value in driving micro-conversions, and the role of attribution it plays.
Bonus tip 1: Focus on User Conversion Rate (instead of session)
Since the conversion rate in most web analytics tools is calculated by sessions a more appropriate calculation would include users or unique visitors.
Not every session is an opportunity to get a customer to make a purchase or sign up for your service. Users coming to your website could have many potential touchpoints; come to see who you (the company) are, read reviews, compare benefits against your competitor, ask a question via online chat, make a purchase.
Using Unique Visitors is a better way of assessing what is really happening on your website because it accommodates these touchpoints and gives "credit" for those prior sessions.
Users are currently measured by setting a persistent cookie on your visitor’s browser and is therefore by no means optimal. However, it is still a better way of assessing conversion rather than session based alone. (note: of course, if you have user ID tracking this is an even better way to tie up sessions/website touchpoints that occur on multiple devices)
To see User Conversion Rate in Google Analytics simply create a new calculated metric under the view settings.
If the above was for an ecommerce website, you would use {{Transactions}} / {{Users}}.
Compare dimensions against the session conversion rate and start assessing conversion rate more cleverly.
Bonus tip two: Task completion rate – why this should also be your KPI
If the vast majority of your website visitors don’t convert on your website, how do you know if they had a successful visit? And how do you find ways in which your site is letting them down?
Most people who visit your website are there for a purpose, some of which you may not have even considered. Web Analytics tools will only tell you part of the user behaviour picture e.g. what content your visitors are engaging with. However how would you know if their expectations were met, and how would you know if their visit was successful one?
One technique is to measure their task completion rate (using any web survey tool, you want).
Be sure to continually sample enough visitors and ask them ‘The Three Greatest Survey Questions Ever’
1) What is the purpose of your visit to our website today?
2) Were you able to complete your task today? (Yes/No)
3) If you were not able to complete your task today, why not?
From the above you’ll be able to:
1) uncover why people come to your website
2) calculate task completion rate and
3) where your website needs improving
Final Takeaway
There is no universal conversion rate. Your goal should be to work towards a conversion rate that’s better than your current one. Consider factors such as your audience, the products you sell, your industry, the quality of traffic you’re driving, the website experience, and more. All of which can play a large role in your conversion rate.
And remember….
- Always segment and provide context when analysing conversion rate
- Look at conversion with other key metrics relevant to your business
- Make use of User Conversion Rate in your web analytics tool
- Measure task completion rate and get insight on where potential website problems exist
- Ultimately, focus on improving your marketing and website experience to deliver more value
If you’d like help on improving your website, why not get in touch today. We’ll identify opportunities to get more value from your website.
Our thorough approach to Conversion Optimisation is proven, and benefited a number of our clients tremendously, find out more here.
