We get asked, “Is my conversion rate what it’s supposed to be?”on a pretty regular basis. It’s always tough give an exact answer for specific circumstances because actual conversion rates depend on many variables, including seasonality, web site response time, ad quality, etc. It takes a disciplined approach to hone in on the factors that influence the conversion rate for each customer.

Benchmark Data
While we can’t give you an exact answer to the question, we can give you a benchmark against which you can measure yourself. Everyone loves a benchmark, right? Our benchmark represents aggregated data across an etailer data sample. It might not be suited perfectly to your individual situation, but it does give you a number to at least gut check your own experiences.

The data in the benchmark shows the following:

• The overall aggregate measure of conversion rate from the etailer sample is 1.91 percent.
• PPC Search traffic has a better conversion rate than straight Organic traffic, 4.52 percent versus 1.75 percent.
• Paid Comparison Shopping Engines convert at almost the same rate is Paid Search 4.24 percent
• Free Comparison Shopping Engines (there is only one we tracked, Froogle) beats everything at 4.63 percent

Seasonality has a large effect on these numbers. Just looking at the overall aggregate numbers, conversion rates during the pre-Christmas time period were 1.9 percent. From that period to today, the overall conversion rates are at 1.45 percent.

How to Improve Your Conversion Rates
So even though we can’t tell you what your specific conversion rate should be, here are a few guidelines that can help you improve your rates:

1. Organic traffic is still a large component of many of our customer’s web sites. This can be inferred by the weighting of the numbers. Organic traffic isn’t free, and this number shows that a well executed SEO campaign could have a large effect on your bottom line.
2. Paid search executed well can result in good conversion rates. Targeted ads and quality landing pages should result in higher conversion rates than your organic traffic. PPC when done right can be an important part of driving conversions on your site.
3. If you sell products, you should almost certainly be using some of the Comparison Shopping Engines. They have excellent conversion rates and good predictable bid prices.
4. Froogle is a great resource. It’s the only one we are highlighting specifically since it’s a bit one-of-a-kind. If you sell products, we can’t think of a reason why you wouldn’t want to be on Froogle.

A few more words of wisdom: make sure you have the tools to track conversion rates across all your advertising sources, including search engines, shopping engines, banner ads, email marketing, RSS feeds, affiliates, etc. It’s also helpful if you can roll up all of your results in a single dashboard so you can quickly see where you might have problems with a source or campaign.

By analyzing your profit generated from each source along with your conversion rates, you can make good, informed decisions about how to optimize any of the components that are affecting your conversion rates.

This entry was posted on Sunday, March 25th, 2007 at 11:59 am and is filed under All Blogs, Comparison Shopping Engines, PPC. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.