What is a good conversion rate?

by Jim August 15, 2019

We love a great uptick in revenue as much as the next person, but it’s important that you understand where that increase has come from. Certain categories experience greater conversion rates than others, especially if you sell fast moving consumer goods, but there’s often more traffic than you realise.

What I learned

  • Do you know what your shop is doing?
  • Are you in a high-converting category?
  • What’s a good conversion rate?
  • Are you utilising your traffic?
  • Find the hidden traffic that can boost numbers


Hey, welcome back Rankers. Having a good time? Sorry about the voice. Had a bit of a loud weekend shall we say.

I wanted to show you this client because it`s got some interesting things and some interesting things we can learn from. So this is the last 30 days here. You can say that we`ve had a massive uptick in revenue over last year. But there are certain things that I love about this client, and I`ll explain these numbers in a second and where the dramatic increase has come from.

Conversion categories

But the first thing to note is when you`re getting conversion rates of up around 8% and 9%, I want you to keep that in mind. Have a think about what your shop is doing. Now, we`ve got a lot of clients doing a lot lower than that, but your conversion rate can often depend on the category that you`re in. So something that`s got a lot of different choices is probably going to have a lower conversion rate, like a chair. How many different chairs are there going to be? You might have 50 chairs. Well, you might have a lower conversion rate if I come there looking for one chair and you`ve got all this variety. So there`s a longer sales cycle to a lot of those things.

But some things, like this one, is I guess you would say the equivalent of a fast moving consumer good, consumables repeat business, those sorts of things. So there`s that with this category. But 8% and 9%, I think that`s actually pretty reasonable. We`ve got others in the same category that are not doing that.

The thing that has always struck me about conversion rates is if you have a retail shop, bricks and mortar, and you get 100 people through that shop, and only eight buy anything from you, there`s probably something wrong there. And having worked in retail 35 years ago, whatever it was, you`d want a close rate of about 20%. You at least want one sale for every five people that came through the door. So I don`t know what it is today. So I even think 10% is a bit low, but a lot of people are doing less than 1%.

And of course, it depends on the volume of traffic you have. One of the easiest ways to increase your eCommerce conversion rate is switch off traffic. Then the eCommerce conversion rate goes up. But don`t do that. So what you can see here is we`ve got CPC, you can see that`s up 111% in traffic and 400%. So there`s about $140,000 extra in revenue over the same time last year. And we weren`t managing the Google ads or paid last year. So there`s that.

Are you utilising your traffic?

The other thing that`s really pleasing for me for this client is that we had a domain migration last year where they went from a .com to a .com.au. I know. Don`t get me started. And that took us down for several months. When I say down, I mean took the traffic down. It didn`t take the site down. But it meant the traffic has now recovered and it`s actually up slightly more. It`s up about 20% on the year before. So even though it says it`s up 68% there, that is on last year. Year before it`s up about 20%. Then we`ve got the email there and everything else.

So you can see the conversion rates, you can see where the traffic is coming from. Direct is up and that`s just normal brand building. But you can see also with direct traffic, even though it`s only up 21%, we`re up 378% on revenue. A lot of that is because of the conversion work that we`ve been doing on the site. So even though the site`s got great conversions, there`s still a lot more we can be doing.

So we`re pretty excited about this client because they`ve only just come into the revenue model, like in the last couple of months. So we`re pretty excited about where we can possibly take that one.

When we dive deeper into the paid, meaning Google AdWords, sorry, Google Ads, there`s our 417%. You can see the cost increase there. We`ve spent about an extra, what is it, $2,600? Yeah, close enough, about an extra $2,600. And that gives you an extra $140,000, which is about 5300%, something like that, for that extra. And you can see it is there, return on spend 2200%.

But this idea that we should only be converting, we should be okay with selling or having two transactions per 100 people, it doesn`t seem that right. I don`t know what your experience is, but to me there`s something wrong. Now, I know there`s bot traffic that might be getting picked up in this test, but still, that sort of number of conversions or people buying seems really low.

So I`d be interested in your experience, what your thoughts are. But certainly I think there is a little more traffic on most retailers sites than what they realise. And if you look at your customers and how your customers are buying from you and how they`re moving around your site, you might find some hidden gems that can do these sorts of numbers for you.

Hopefully that`s helpful. We`ll see you next week. Thanks very much. Bye.

Jim’s been here for a while, you know who he is.

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