What do you think a good conversion rate is?

TommyCarey Level X³

May 20, 2017, 9:00 am

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What do you think a good conversion rate is?

So many times I've seen people asking "What's a good conversion rate?" when I'm on forums or blogs. Good conversion rates are usually in the eye of the beholder, but that's not what everyone thinks. Some say when you profit $X,XXX or when you break even, so in the end it's really up to that specific person on what they think is a good conversion rate. Below I'll go over what I think is a good conversion rate and I'd love to hear what you have to say about it

How do you define a conversion?
When it comes to conversions, you can consider the sale a conversion or just a click as one. Most people will consider the sale a conversion because it's what they're usually paying to get. The only thing that a conversion will be without a sale is if you're running a campaign to build an email list. In this case, the sign up to your newsletters would be the conversion. In short, a conversion is a measurement that you can use to figure out how successful your business or website is.

Like said above, a conversion can be whatever you want it to be. Here are a few:

Emails: If you plan on building a list, then each sign up would be your conversion.
Form Fill Outs: If you're just trying to get people to contact you, a form fill out could be your conversion. You can also pair this up with emails because most forms can be configured to work with email capture systems
Sales: When you're getting sales and figuring out how much each one costs you, this would be your conversion. This is what most people use when tracking conversions.

You can literally consider anything as a conversion, even your page views lol. I wouldn't recommend this though because you could just purchase some random traffic package and feel like a king but make 0 sales. And if you don't know how to monitor, track and evaluate your traffic you'll just get annoyed.

Figuring out your conversion rate
Sometimes people make this a lot more difficult than it really is. They will spend days trying to figure out exactly what their conversion rate is and it's not needed because the basic information is all you need lol.

If you're figuring out your conversion rate for sales, all you have to do is add up all your sales (how many, not the total amount you made from them) and figure out how much traffic you had from actual people while removing the bots. Then take the number of sales and divide it by the number of actual people who visited your website to get your conversion rate.

Now you can get a little more detailed and remove the second, third, fourth, etc. sales from the same person. You could actually have 100 sales, but only from 20 different people. This would mean that your conversion rate is off if you use the first example above. For this you would divide the total amount of people by the 20 who actually purchased, not the 100 sales. This would be the most accurate conversion rate you can come up with

What do you think a good conversion rate is?

If you're not that good with math, or a calculator, you won't know what the results are. If the calculator shows 0.05 then your conversion rate would be 5% If you're showing 0.005 then you're getting 1/2 of a percent (not good).

Here's a basic scale to figure out your percentage:

0.01 = 1%
0.10 = 10%
1 = 100%

You won't be able to go over 100% unless you're just tracking sales and not unique sales. If you're tracking the total sales you could get over 100% because you could have 100 people visit your website but have 10 of these people buy 15 items each. In reality you're conversion rate would be 10% but the math for sales conversions would be 150%

Value your conversions
Now when it comes to conversions, not 2 websites are created equal. Lets say that one website sells something for $10 while the other sells an item for $10,000. Each website is getting 10,000 visitors a month but I guarantee that they will not have the same conversion rates.

If a company sold cars for $10,000 and another sold action figures for $10, the value of a conversion would differ. The difference is that the $10,000 car would be less likely to sell as often as the $10 action figure. You would think that this would be an apples to apples type of thing, but it's far from it.

Even if each website is getting the same amount of traffic from a PPC campaign or naturally, the car wouldn't sell as often as the action figure simply because of the price. Let's say you're putting $1,000 into a PPC campaign and selling 1,000 action figures making you $3,000 profit off of 1,000 sales. On the other hand you could put $1,000 into your car PPC campaign and make 1 sale but profit $3,000 from the sale.

Action Figure: Sold for $10 but profit $3 per sale
Car: Sold for $10,000 but profit $3,000 per sale

1,000 sales VS 1 sale

Both equal the same amount of profit at the end of the month but one has many more sales, and this is why you need to put a value on your conversions

What is a good conversion rate?
Well this really depends no what your end game is. The only person who is depending on conversions is you, not your friends or family members or even your competition. You're the only one in this race so you decide what the finish line is.

Don't follow what your competitors are doing, because they probably inflate their numbers to seem better than they actually are. Set your own goals of 100 sales a week, month, quarter, or yearly. If you're profiting and living the good life while you don't have to worry about your company going under, you're successful and don't worry about how many sales you're making. You can always bring someone in to worry about that while you sip on mimosas every morning and go to the beach in the afternoon lol. Or you can sit down and crunch numbers but not worry about what your competition is making. Make them scared and come out of nowhere by bootstrapping your profits and when you do that, they can worry about you

Just strive to be better the current month than you were last month. That's your goal, and if you're doing everything right your conversions will only get better

I like to target a 1% conversion rate if you were wondering. I'm usually higher, but if I set it at 1% then I'm never disappointed lmao

In Conclusion:
A decent conversion rate will keep you in business but a great conversion rate will make you rich. It's up to you to set your own goals, but be realistic when doing so. Put values on your conversions if you're selling something that is much higher priced than say a $10 action figure

And don't worry about your competitors because that will always make it so you feel like you're chasing success even though you could already be successful

Remember to follow me!
https://www.seoclerks.com/user/Razzy

Thanks!

Razzy

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idealmike

Very interesting discussion Raz! Apples is apples but that don't mean they all have to be sold for the same price all around the world. Some apples are a rare kind, only grown in and imported to certain countries. Some apples are expensive to grow and package and they are harder to source. But some apples are much tastier than other apples, and while the demand for them is high but the supply rate for them low, the price for those apples is higher than say Granny Smith's or Golden Delicious.

Basically, my point is, when selling anything, the conversion rate and your ROI will always be better for products that are in high demand but the supply rate is low. Of course, it largely depends how much you're paying for it yourself and how much you're selling it for. Then how much of it you're selling and whether you have sold enough to recoup your investment and make a profit.

Now then, time for a mimosa!

9 years ago

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overcast

I think online ads and the sponsored content can be hit and miss. And if you don't pay attention to the budget, such conversion may be skewed. I think 0.10% can be a good number. But as we know keeping the number consistent won't be an easy task. So we have to check with that.

9 years ago

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Corzhens

I agree about the hit or miss with the advertising campaign that’s why users who are promoting their business in the social media tend to overdo it because of that hit-or-miss idea. You can post your links 5 times in a day but you may get nothing in return. On the other hand, you can post once on your social media account and you may get so many positive reactions and even clean traffic.

8 years ago

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What do you think a good conversion rate is?

What do you think a good conversion rate is?

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idealmike

overcast

Corzhens

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