What You Should Know About Website Conversion Rates

If you want to learn more about what influences website conversion rates, the number of transactions divided by the number of unique visitors, and are wondering how your site is performing relative to others, read on. You may be surprised, especially if you have spoken to any web design companies that have told you that a complete site redesign will do the trick. Before you plunk down your hard-earned cash and buy the Brooklyn Bridge, it is important to understand the key drivers – the design of your website is only one of many important elements.

The factors that influence website conversions are actually quite similar to those of traditional, brick & mortar businesses. To illustrate this, think about a Pharmacy and an Art Gallery. Would you expect the number of sales relative to the number of visitors to be the same? Not likely. In the case of the pharmacy, the products are typically "known", very specialized, lower in price and very similar to products sold in other pharmacies. Customers typically go with a purchase in mind, not to browse. Now contrast that with an Art Gallery. Art tastes vary dramatically and what is being sold might not appeal to the masses. Prices are generally higher than what you would find in a drug store (okay, maybe not these days!) and many people are simply there to browse. One would expect the pharmacy to have a much higher conversion rate than the art gallery. Of course, this does not mean one establishment is better than the other.

Nothing frustrates me more than when I hear the questio
"what is an average website conversion rate?" The reason is that while there is likely a factual answer, it does not help the person asking in the way they intend it to, and quite often creates unrealistic expectations (both too high and too low). An analogy would be "What does the average person look like?" There may indeed be an average (ex. 5' 6 1/2", grayish-brown hair, half male / half female, etc.), but this "person" does not exist in real life and you probably would not want to build your business targets and metrics to meet this average. So it goes without saying that you should be concerned when someone actually tries to answer the question with a specific number, say 2.5%. Or even worse, when a so-called SEO expert says something like: "Top sites convert at 20%, but you are only at 2%, so clearly your site requires quite a few improvements." This kind of jump in conversion rate is rare. Site improvements certainly help, but they are more likely to move your conversions from 1 to 1 ½% (still extremely important) or from 5 to 6 percent, not from 2% to 15% unless all of the other elements of your business suggest higher rates (see chart below). A poorly designed site can kill conversions, but a beautifully designed one by no means guarantees a high rate!

The reason for this is that there are a myriad of factors that influence site conversion. First and foremost, the type of transaction you are trying to close. An ecommerce site will typically have very different conversion rates than a site simply offering a free white paper or a free trial to a software subscription.

Often overlooked, there are two factors that have a significant influence. One is brand recognition and the other the amount of traffic a company drives to its website from outside the Internet. These two factors alone can easily take a site that is converting at 2% to well over 10% over a period of time. To highlight this, think about the times you have gone to Amazon.com directly as opposed to doing an Internet search? As a customer, you are far more likely to purchase if you intentionally go to a business that you know than if you just happen to land there through search (similar to entering a store next to the one you intended to visit in a mall). The same holds true for indirect traffic, meaning traffic driven from sources such as radio commercials and newspapers. Many times a retailer will send a direct mail piece or advertise a special in a newspaper. If this is the case, a customer has already done some evaluation of the offer before going to the website, and so again, is far more likely to transact than if they landed there randomly.

A better question to ask is "What would be a reasonable conversion rate for my particular website and how can I improve it?" Here are some key factors to help you hone in on a range:

1. What is it that you are trying to convert – product sales, leads, software?

Conversion rates for free products, such as a white paper, will be higher than ones with a price.

2. Do you sell varied products or niche products?

A business selling specialized products (ex. hardware store), will likely have a higher conversion rate than one with a wide range of dissimilar products (ex. department store).

3. Do your products tend to be on the high-priced side or lower-priced?

Customers are more likely to compare sites when the purchase price of an item is high, thus lowering conversions.

4. Do you have a large product selection or limited choices?

This one is tricky! If you have a large selection of specialized products, you should expect a high rate, but there reverse is true with a small selection of varied products (think clothing store where they may not have your size, for example.)

5. Are you a large, recognized brand? Similarly, have you been in business many years or just starting out?

The more customers know and trust you, the more likely they are to buy! Repeat visitors tend to have very high conversion rates.

6. Are customers finding you only through the Internet, or are you driving traffic with specific deals through direct mail, affiliates, TV, Radio, etc.

Driving customers to your site with a promotion or special will typically increase sales.

7. Are customers comfortable with your website (look & feel, security, etc.)?

This is the factor that gets the most attention. Clearly it is important – sites that do not look professional are not likely to have as many sales.

8. Do you need to try on, touch or feel the product?

If you know a product meets your needs without having to see it in-person, the transaction rate will be higher (think about buying a battery or my personal favorite, trophies, versus buying a dress).

The Internet operates no differently than the brick and mortar world. Stores that have high-priced merchandise and a limited selection (ex. car dealership) aren't likely to have huge conversion rates no matter how perfect their Internet site might look. Said differently, unless you have strong brand recognition with highly specialized, low-priced merchandise and a great deal of advertising, do not expect conversion rates in the 30% range!