It is without a doubt that your site’s performance is indicated by a number of metrics, but one metric that surpasses among all is the conversion metrics. If you are not familiar with the term, then don’t worry we will give a brief insight into conversion metrics and how lead conversion rate is important for your business.
Now, here’s a question that many of us have previously heard from our managers and bosses and answering it at times really sent us into skepticism.
“How does our industry-specific marketing KPIs compare to another on the market?”
We often found ourselves doubting our performance credibility and result in asking are we making enough efforts to make our business a profitable solution for the industry?
The conversion rate is one key metric that allows us to understand where our website on the market stands and how well does it perform when it comes to profit-making.
The best definition for conversion rate that I have come across is indeed, the most simple:
Conversion rate indicates the percentage of the visitors to your website have completed an action that fulfills the end-objective of the website.
For example, if the end-objective of your website is to get users to pay per sign-up, then your conversion rate depends on how many individuals are purchasing your premium package.
When we talk about conversion rates, the only way to improve one is by adjusting the ROI-focused marketing strategies by targeting every stage of the marketing funnel.
But, are we sure what conversion rate is the best conversion rate for a website to perform profitably on the Internet?
In one of his posts, Larry Kim states that:
“If you’re already achieving 3%, 5% or even 10% conversion rates, is that as high as you’re going to go? But what is a good conversion rate? Across industries, the average landing page conversion rate was 2.35%, yet the top 25% are converting at 5.31% or higher. Ideally, you want to break into the top 10% — these are the landing pages with conversion rates of 11.45% or higher.”
Certain marketing gurus believe that optimizing website landing pages means that you simply make minor fixes or updates. To illustrate their self-professed beliefs, they ask others to change CTA button colors, change fonts or re-arrange images. Although it will have positive effects on your website, that effect will not stay for long. Your website may see the sunshine with 2% or a 7% increase; however, it will eventually fade away in time.
Wordstream published a piece written by Larry Kim which showed a graphical representation of an A/B test that was conducted on the landing page of a particular website. They did a bit of minor tweaking.
Here’s what happened when both the landing pages were applied to a split testing methodology:
The gray line represents the first version of the page which was the original version. The blue line represents the second version of the same page which performed considerably better than the first one. Although, the blue line did manage to perform better than the gray line for some time; however, the success ratio did not continue for long.
As you can see that when we move ahead on the chart to the next quarter, there comes a point where both the lines superimpose each other and reach a breakeven.
So when people ask me how you would define a good conversion rate for a website, I only tell them one thing, something that can help your business survive and thrive in the long run.
Marketo performed a thorough research in order to learn which acquisition channels had a conversion rate better than the other.
The darker shade of green in the chart represents that conversion rates are relatively high. As you can see the highest acquisition channel which has the maximum conversion rate on the market is “Referral” standing at 10.99%. The word of mouth is the most powerful way to spread the word for your business. Referrals are the best source of increasing your audience range. The more referrals you convert to customers, the more referrals you will receive to make more customers through them.
Second to referral in numbers at 4.54% is Partnering. There are many benefits to effective partnering. In order to cash these benefits, you need to partner up with a company which accommodates your targeting requirements and has a track record of pioneering success. Partnering with the right people in business can give the long-awaited exposure your website needs. It will show up in places which will contribute in helping you to achieve your conversion mission.
Although paid marketing and inbound marketing are also important acquisition channels, as the competition in market soars sky-high, the chance of converting a potential lead for business becomes a bit of a daunting task. However, if the organization pre-plans their content marketing strategy the right way, it can hit potential markets and reap greater
To get things started, let’s first check out what is the lead generation conversion average in each particular industry operating on a global scale. All thanks to Unbounce for publishing this amazing research and giving us an insight into how much the industry average differs among industries.
Often times, people fall under the misconception that their website conversion rate is not making enough profit compared to the average conversion rate which they read about in a particular blog post.
However, they greatly fail to realize that the average rate which they considered basically belonged to a different industry.
Here let me explain it to you by using a practical life example. For a store that sells tourism packages at a discount price abundantly has a conversion average of 5% as compared to a high education institute running a website offering the same rates for a curriculum having a conversion average of 2.6%.
Why the difference? A multitude of factors are involved including the nature of the business, the average number of visitors per session, type of discount being offered and whether the offer is interesting enough or not.
Conversion rates greatly differ in between industries and some industries outperform the other. For example, the conversion rate for E-commerce businesses is far less than the conversion rate for Finance businesses. Despite the fact that industry wise conversion rates differ greatly, the top 10% of every industry has a gradual 3x – 5x better conversion rate than what the industry observes at an average. In fact, the percentile far exceeds in case of Finance as you can see in the demographics below:
Last but not the least, we were curious how conversion rates can differ based on geographic locations. However, our findings didn’t show much research performed in this particular area. Although, we did found some information by researching in the e-commerce industry and much to our surprise we found out that conversion rates do differ when it comes to the submission of payments country wise.
This data sourced from the JotForm represents that the average conversion rate in countries such as Australia has the highest conversion ratio of 7.6% whereas the average conversion rate in France is the lowest with an industry average of 1.7%. It was observed that the conversion ratio was much better for the non-European countries as compared to countries which lie outside Europe. Perhaps, it was because Europeans are still awaiting better payment processors to be integrated into EU websites.
Finally, I would like to add my two cents to the whole theory of how conversion rate differs among industries and markets. No two companies can have the same exact conversion rates and its rather difficult to compare. Conversion strategies greatly differ among industries based on their conversion strategy and how their sales funnel work. The concept of conversion rate is not uniform when we discuss it in the B2B industries as some conversions take almost a month.
On the other hand, if you belong to a B2C company and sell products online, conversion rates are more dependent on how actively you perform in marketing your product and how effectively you design your landing pages. No matter which particular industry you belong to, if you are continuously performing A/B tests and improving your strategy based on quantifiable data, conversion rates can significantly improve.
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