Whenever I audit a business or a free trial, I always talk about conversion rates. The question that keeps coming up is: “What’s a good conversion rate?”.
My answer is always the same…
The highest possible.
In this post, I want to show you why there is no such thing as a good conversion rate and how you can get to the level you’re dreaming of.
Conversion Rate Benchmarks
Many blogs will tell you that you should aim at getting a 15% conversion rate. What if you’re already at 25%? Your job is done and you can go home?
Having a conversion rate of 25% also means that 75% of your leads won’t end up buying from you. You can do better!
Take a look at this graph. If you’re at 7%, that’s great. Should you be satisfied? No! You should keep improving your conversion rate. That’s why benchmarks are so dangerous.
There are no proper benchmarks for conversion rates because there are too many variables involved:
- Traffic source
- Traffic quality
- Price of the offer
- Value proposition
- Sales process
- Landing page
- Many more…
If you sell a software for $600 / month, should you expect the same conversion rate as that of a free software? It depends…
Finding YOUR Benchmark
Your business is unique: you can’t find true benchmarks online. Don’t copy what others are doing in the industry (you’ll be a late-mover by definition).
Calculate your current conversion rate and remember that number. Have a look at that rate over different time periods to see how it fluctuates.
I generally recommend looking at your conversion rate over the course of several months. If you see huge fluctuations, investigate them and try to understand where these variations are coming from.
That’s your benchmark. Now the question becomes: How can we improve it?
Improving your Conversion Rate
Short answer: Experimentation.
Now that you have a benchmark, you need to launch various experiments in order to see what works.
Experiment on your value proposition. Design a better onboarding flow. Create a micro-conversion. You got it! Experiment!
The whole idea is to launch as many experiments as you can to learn about your business & improve your current benchmark.
When you experiment, failing isn’t really a failure. Each experiment should lead to significant learning. The more you learn, the better you’ll become at understanding your business & consumers.
As you probably know, you have several conversion rates for each step of your funnel (e.g. Website > Newsletter > Trial > Paid). Don’t forget to sit down and think about where you can have the most impact.
Good Conversion Rate?
I’m truly sorry if this wasn’t the straightforward answer you were looking for, but this is how things really work.
Watch out for benchmarks. They’re dangerous! Whether you’re below or above doesn’t matter. Where can you have the most impact? How can you improve this area of your business?
Always experiment in order to discover what works and grow your business efficiently.