Much has been written about conversion rates since this article was originally published in 2007 on our website. The most recent available data comes from a 2012 Marketing Sherpa report on average conversion rates for different industries.
According to the data, retail/ecommerce sites reported an average conversion rate of 3%, while media/publishing sites averaged 10%, technology hardware sites 5%, and the software industry sector averaged 7%. Professional/financial services, which would include legal, medical, and accounting firms, reported the highest average conversion rate of 10%.
That being said, one can’t forget that there are multiple factors that play into conversion rates. Within industry sectors, product differences can be significant. Let’s say your site sells $100 leg pads for hockey players and another site features $2,000 hockey skates -– odds are that the two sites will have significantly different conversion rates due to the price of their products alone.
As well, the definition of a conversion varies from site to site. For example, you may define a conversion as a user downloading your white paper on setting up a remarketing campaign, while another site in the same industry sector defines a conversion as someone hiring them to run their remarketing campaign. Should you expect conversion rates to be the same for each of these sites given the relative level of difficulty in achieving that conversion? Unlikely.
Many other factors can also influence conversion rates, including how well you promote your product, the ease of the purchase process itself, the impression your site itself gives visitors – even the seasonal appeal of your product line.
The bottom line of the original article remains valid – instead of becoming overly concerned about how your conversion rate compares to others in the industry, concentrate on your own company objectives and how you can improve upon your current ROI. Improvement should always be the end goal, no matter what your average conversion rate might be.
—– The original article from Kevin Gold follows: —–
A question I am asked frequently is what is the average conversion rate for an ecommerce website, or for any website for that matter. There is a basic answer and a more complicated yet more practical one.
For the basic answer, I reference a recent study conducted by Forrester as presented in an article from the August 2007 edition of Target Marketing Magazine. The article stated, “Forrester research indicates that the average conversion rate – that is the ratio of orders to overall site visits – is 2.9 percent.”
About three-fourths of the ecommerce companies I have worked with to improve their conversion rate (defined the same way as indicated above) initially reported to me a conversion rate of less than 1.0 percent. Therefore, from my experience, the average conversion rate among small to mid-size businesses (ones probably not well represented in Forrester’s study) is maybe closer to 1.5 percent.
NOTE: If anyone has experience with a larger number of small to mid-size ecommerce sites, please send me your thoughts on the average conversion rate! It would be a great information for everyone to know.
For lead generation and other non ecommerce sites, the conversion rate fluctuates drastically. I have not found reliable average conversion rate figures yet for non-ecommerce sites, but I assume that subscription sites could experience similar to slightly higher rates (around 2.9 to 6 percent), while lead forms could reach even higher levels (around 8 percent to over 20 percent). Certainly variables like B2B versus B2C, the type of offer, the type of attracted visitors (advertising methods), incentivizied vs. not incentivized, quality/relevance of creative, and so on will influence the conversion rate.
The paragraph above and its obscure assumptions lead perfectly into the “more complicated yet more practical” response.
Comparing conversion rates within markets, or worse across industries, is difficult, if not almost impossible. There are so many variables affecting conversion rates. More importantly, a conversion rate metric provides no indication of profitability — the number that really matters. Knowing an “average conversion rate” is nice, but you should really be concerned with what conversion rate you need to achieve to drive profitable leads, subscriptions, sales, or other business value associated with your objectives.
Set your own conversion rate goal based on a financial analysis focused on greater sales volume and/or higher profits and compete against this internal benchmark. At the end of the day, its not a matter of whether you are above or below the “industry average” — instead it’s about the financial success of your web business.
Image: Calculating Percentages — Original Billboard Image from Shutterstock