A question I am asked frequently is “what is the average conversion rate?”A� Initially, I resisted responding to this question because comparing to an average is potentially misleading.A� Every web business is fundamentally different in how it operates, markets, and merchandises.A� Comparisons ultimately attempt to match apples to oranges. Nevertheless, clients are eager to get an answer.
A recent e-commerce study conducted by Forrester that I found in celebrex without prescription, purchase clomid. an article from the August 2007 edition of Target Marketing Magazine stated, “Forrester research indicates that the average conversion rate – that is the ratio of orders to overall site visits – is 2.9 percent.”
Based on my experience, the average conversion rate among small to mid-sized e-commerce businesses (ones probably not well-represented in Forrester’s study) is closer to 2.0%. A�A�Conversion rates on non e-commerce sites buy prednisone vary greatly. I have not found reliable average conversion rates, but I assume that subscription sites could experience similar to slightly higher rates (around 2.9% – 6%), lead generation may reach levels of 6% to over 12%, and “contact us” request forms on B2B sites are all over the board.
The problems with citing and comparing average conversion rates are immense.A� Variables – such as B2B versus B2C; the type of offer; the quality/relevancy of the attracted customers (targeted vs. shotgun-like advertising channels); incentivized vs. not incentivized; brand awareness/equity vs. no recognition; quality/relevance of creative; technology efficiency; and other design, usability, and influence factors – all combine to create a better or worse conversion indian pharmacy ventolin. rate.A� Even how an individual business calculates conversion and the input variables they use can create variances.
In essence, comparing your business to an average within your market or – even worse – across industries is worthless. A�Too many variables affect conversion rate measures to draw any useful comparisons.
More important than conversion rate, however, volume and profitability measures are the metrics that really matter for running a web business.A� Every business understands that cash flow is king.A� Therefore, it is a better practice to set an internal conversion rate objective related to achieving greater sales volume and/or higher profits.A� It is not a matter of whether you are above or below an “industry conversion rate average” – it is whether your internal conversion rate is achieving the sales volume and profit required to grow and sustain your business.
For example, an industry average sales conversion rate of 2.9% can actually be detrimental.A� If a business spent $10,000 on advertising to generate 5,000 visitors to their website and their average order size was $50, they would earn roughly $7,250 in gross revenue. This represents an operating Female Viagra cheap loss of $2,750! A�In this instance, the business would need an average sales conversion rate of 4% (way above the industry average) to break even on their initial $10,000 advertising expense.
Conversion rates measured in isolation from other metrics – such as sales volume, profit margin, and cost per sale – fail to capture a real measure of performance.A� For example, certain advertising channels, such as second-tier pay-per-click search engines, may generate an exceptional buy malegra conversion rate and positive return on advertising investment; however, the sales volume generated could be so low that it does not offset the labor required to achieve it. A�The high conversion rate suggests success, but the low sales volume indicates a potential waste of time and resources.
Try improving your conversion rate with an eye on your financial metrics, primarily cost per sale, sales volume, and profit margin.A� Do not fall prey to tunnel vision and concentrate on improving conversion rates alone, when financial sustainability and growth are ultimately more important for your business.