A Look at Conversion Rates for Websites
Online Sales Per Visitor - What is a Conversion Rate?
A Conversion Rate is the percentage of people who visit a website, through paid advertising, organic (free) searches, or by other links or ads, and then buy a product fill out a form, or make some other contact or commitment. For example, if you want someone to sign up for a free newsletter on your site, that could be considered a completed transaction or a conversion even though there is no money involved. So the conversion rate is a ratio: if for every 100 people who come to your site, one person buys a product, then your conversion rate is 1%.
While Google and Yahoo, for example, allow you to monitor conversions from your paid advertising or your pay-per-click campaigns, they do not make it easy to track your sales from free search or other direct links to your site. And unless you set up a separate phone number or institute some other discount mechanism, it is often hard to track your total conversions from website advertising because many people will call in rather than fill out a form or complete a shopping cart. Most of my clients find that getting their staff to consistently ask how customers found the website, or what words they used when searching online, is either bothersome or interferes with the sales process. There are methods that can be used to help you track incoming calls, but unless you have a huge automation budget, these conversions must be tracked manually with other techniques.
What is a Good Conversion Rate vs. the Average?
There are quite a few metrics to measuring conversion rates. The more expensive the item for sale, the lower the average conversion rate. For example, for $500 items and up, the average conversion rate is between 2 and 3%, while anything above 5% is outstanding. For $50 items and under, an excellent rate is anything above 6%, while the average rage is between 3 and 4%. These figures vary also by type of website, catalog store vs. name brand store, etc. Some of the RSS feeds I've included above have statistics on sales by store type and item pricing.