As with many marketing-related questions, there\u2019s only one correct answer: \u201cOne that is always improving.\u201d <\/p>\n\n\n\n
But that\u2019s not the answer managers want to hear. They\u2019re seeking affirmation of two things: first, that their conversion rate is performing well, and secondly, that they\u2019re doing as good or better than their competitors. <\/p>\n\n\n\n
So, what is a good conversion rate? <\/p>\n\n\n\n
In this Insight we\u2019ll be answering that question in full detail. Here\u2019s what you can expect to learn: <\/p>\n\n\n\n
- Why the website conversion rate is critical to ecommerce<\/a><\/li>
- What is a good conversion rate for your business?<\/a><\/li>
- Why your most important competitor is you<\/a><\/li>
- The benefit to focusing on marginal gains<\/a><\/li>
- Your website conversion rate and your ROI<\/a><\/li><\/ul>\n\n\n\n
Why the Website Conversion Rate Is Critical to Ecommerce<\/h2>\n\n\n\n
Here\u2019s marketing\u2019s most obvious, yet best-kept secret: conversion rate is the gatekeeper to ecommerce success<\/a>.<\/p>\n\n\n\n
If you have enough budget depth to launch a masterful pay-per-click campaign, you can send thousands of visitors to your ecommerce website daily.<\/p>\n\n\n\n
Anyone with a sufficient bankroll can do that.<\/p>\n\n\n\n
Just about every business leader we speak with is concerned about getting more traffic, and most are spending more on the advertising budget than on any other phase of marketing.<\/p>\n\n\n\n
There\u2019s a problem with the \u201cIt\u2019s all in the numbers\u201d philosophy, though: Unless you can convert those visitors \u2013 lead them to take the next step along the path from interested prospect to happy customer \u2013 then you\u2019ve wasted your time and your money<\/a> building traffic.<\/p>\n\n\n\n
Any page on the internet can buy traffic \u2026 but a conversion-optimized website turns that traffic into sales, and a poorly-performing website fails to capitalize on the opportunity.<\/p>\n\n\n\n
Your conversion rate can make or break any advertising campaign.<\/p>\n\n\n\n
As you\u2019ll see below, those who look closely at the potential of conversion rate optimization<\/a> (CRO) soon learn it\u2019s not a tool to use, then discard. At its best, conversion rate optimization is an ongoing project that seeks regular boosts in conversion rates and revenues.<\/p>\n\n\n\n
Steady progress beats furious effort every time.<\/p>\n\n\n\n
What Is a Good Conversion Rate for My Business?<\/h2>\n\n\n\n
Okay, let\u2019s get down to the question that brought you here. You want to know how well your marketing efforts are doing \u2013 especially in relation to the competition.<\/p>\n\n\n\n
You get frustrated at spending money to draw traffic to your site, then seeing those visitors leave without making a purchase. Is your paltry conversion rate normal? Or have others found ways to get more and better-targeted traffic?<\/p>\n\n\n\n
You\u2019re hoping we\u2019ll give you a peek at what\u2019s really going on \u2013 an insider look at the numbers behind digital marketing\u2026 and we\u2019re eager to do that. Yet, the conclusion we draw (and hope you\u2019ll adopt) may surprise you.<\/p>\n\n\n\n
We\u2019ve collected data from ecommerce businesses, both large and small. We\u2019ve worked closely with ecommerce VPs and their staff to boost conversion rates and grow business. Some of that data is presented as case studies, and we\u2019ll provide access to several of those documents below.<\/p>\n\n\n\n
Beyond the numbers, though, we want you to hone in on something truly transformational \u2013 a fact that can build new enthusiasm in your ecommerce business and point the way towards phenomenal growth<\/a>.<\/p>\n\n\n\n
Are you ready?<\/p>\n\n\n\n
Here it is: the most important business you can compete against is your own.<\/p>\n\n\n\n
Here\u2019s Why Your Most Important Competitor Is You<\/h2>\n\n\n\n
In a long-distance running race, you\u2019ll see the participants assess where they are in relation to the rest of the pack and how far away they are from the leader. That\u2019s part of the race. The most telling part of the event, though, is internal. The runners are pulling from their preparation time and internal willpower to push on and compete.<\/p>\n\n\n\n
There are two main reasons most ecommerce roles are concerned about conversion<\/a> rates:<\/p>\n\n\n\n
- So you can measure your business against your competitors<\/li>
- So you can operate your business more effectively<\/li><\/ol>\n\n\n\n
Hands down, reason number two takes the cake. For the most part, you shouldn\u2019t waste time and money trying to gauge your own success against someone else\u2019s. In the end, it\u2019s how well you leverage the resources you possess that will determine how well you perform.<\/p>\n\n\n\n
Yes, routine competitive assessments are an excellent aid to strategic planning, but trying to dig down deeply enough to compare conversion rates is almost certain to be counterproductive.<\/p>\n\n\n\n
Rather than invest precious time and resources studying the competition, focus on a deep dive into your own sales funnel and strive for steady improvement.<\/p>\n\n\n\n
We\u2019ve found that\u2019s the most effective strategy for success. You can accurately assess your own data, but you\u2019d be hard-pressed to get the competition to share their numbers with you. Charts (like the one shown above) and case studies can get you in the ballpark, but there are too many variables to make nose-to-nose comparisons.<\/p>\n\n\n\n
Competing against yourself, though, can pay huge dividends.<\/p>\n\n\n\n
The Benefit to Focusing on Marginal Gains<\/h2>\n\n\n\n
It\u2019s not uncommon for ecommerce businesses to focus on achieving ambitious, long-term<\/a> goals throughout the year. While long-term goal setting is an important piece to running an ecommerce business, you shouldn\u2019t overlook the value in setting marginal, short-term goals along the way. <\/p>\n\n\n\n
All too often we see ecommerce managers overemphasize the importance of one central goal while overlooking the significance of making marginal improvements every day. What we recommend is to focus on making incremental improvements to your conversion rate (or whichever metric you\u2019re seeking to improve) by a small percentage each day. <\/p>\n\n\n\n
In the book Atomic Habits<\/a>, author James Clear makes a strong case for why marginal gains tend to provide for better results in the long-term. By focusing on making incremental improvements every day, you\u2019ll experience far better results than setting a larger goal and working towards achieving it over a longer period of time.\u00a0<\/p>\n\n\n\n
If you can maintain a daily improvement of 1% to any specific aspect of your website for one year, you\u2019ll find yourself thirty-seven times better by the time you\u2019re done. The initial improvements will likely go unnoticed, but compounded over time those improvements will result in measurable success for your business. <\/p>\n\n\n\n
![\"good](\"https:\/\/thegood.com\/wp-content\/uploads\/image1-10.png\")
<\/figure><\/div>\n\n\n\nEcommerce managers love to focus on long-term yearly goals, but we find that often those goals are hindering consistent progress. While there\u2019s certainly nothing with having ambitious, long-term goals for your business, you shouldn\u2019t overlook the value of incremental improvements. <\/p>\n\n\n\n
James Clear<\/a> says it best when describing the value of making marginal improvements:<\/p>\n\n\n\n
\u201cThe truth is that most of the significant things in life aren’t stand-alone events, but rather the sum of all the moments when we chose to do things 1 percent better or 1 percent worse. Aggregating these marginal gains makes a difference.\u201d <\/em><\/p><\/blockquote>\n\n\n\n
Your Website Conversion Rate and Your ROI<\/h2>\n\n\n\n
We often use a conversion rate calculator to show our clients the ROI growth possibilities with incremental improvements over time. You can access that calculator here: Website Conversion Rates ROI<\/a>.<\/p>\n\n\n\n
Let\u2019s use basic numbers to consider how CRO can affect ROI. To get a feel for what could happen in your business, plug your own data into the calculator.<\/p>\n\n\n\n
Suppose your ecommerce website is currently converting<\/a> (unique) visitors at two percent. That means two out of every one hundred people who visit your site end up purchasing something within the timeframe you\u2019re measuring.<\/p>\n\n\n\n
Your average monthly traffic is 500K unique visitors (each visitor is counted once, regardless of how many times any individual returns to the site), and your average order value (AOV) is $150.<\/p>\n\n\n\n
Given those numbers, you\u2019re realizing $1.5M in monthly revenue.<\/p>\n\n\n\n
After consultation with The Good, you apply the proven principles of conversion rate optimization to coax your conversion rate up by two percent, you\u2019ve now doubled your monthly revenue to $3M.<\/p>\n\n\n\n
That would be good news for any business \u2013 but that\u2019s not all you can do by working on your own site instead of trying to compare it to someone else\u2019s.<\/p>\n\n\n\n
Done well, conversion rate optimization not only converts more of your visitors into buyers, it draws more sales and pushes your average order value up. If your two percent improvement to conversion rate also results in AOV rising to $200, your new monthly revenue will climb up to $4M.<\/p>\n\n\n\n
You\u2019ve gone from $1.5M to $4M in monthly revenue\u2026 simply by boosting your conversion rate and average order value.<\/p>\n\n\n\n
Do you see why those who \u201cget it\u201d and understand what conversion rate optimization can do are eager to develop an ongoing CRO program? Anyone who fails to get excited about the potential of conversion rate optimization simply doesn\u2019t understand the concept.<\/p>\n\n\n\n
We often work with digital marketing managers who are struggling to get budgeted for CRO consulting. Invariably, we find education is the key. Once management is given a clear presentation, similar to the one you\u2019ve received here, the lights go on.<\/p>\n\n\n\n
Continuous Improvement is Key<\/h2>\n\n\n\n
Conversion rate optimization is an ongoing process that sometimes uncovers areas where big gains can be made quickly, but most often works to make incremental improvements over time.<\/p>\n\n\n\n
Is your current conversion rate high enough? Probably not. You may not be able to double revenue overnight, but you can certainly do more with what you have. That is the goal of conversion rate optimization<\/a>. You\u2019re already investing plenty of money in advertising\u2026 why not make the most of it?<\/p>\n\n\n\n
At The Good, we trust in the power of marginal gains to help optimize ecommerce websites for a better user-experience. If you’re interested in improving your website’s conversion rate but aren’t sure where to start, you might consider scheduling a free landing page teardown<\/a> where a member of our strategy team will provide you with several actionable recommendations for you to start implementing on your site right away.<\/p>\n\n\n\n
- What is a good conversion rate for your business?<\/a><\/li>