Most online business owners and online marketers are baffled by the question, “What is a good conversion rate?” A good conversion rate is determined or defined by six major factors.
1. Traffic Source
There are various traffic sources and each one produces its own result; a particular source may offer better quality traffic than another. A higher traffic quality attracts higher conversion rate.
For instance, a pay per click campaign on Google Adwords is one of the top sources for higher conversion rate since you can opt to display your ad only when a web visitor is actively looking for your offering (product or service). On the other hand, banner advertising produces lower conversion rate since it is not targeted.
2. Conversion Type Being Measured
Also, you will get different conversion rates with different offers. For instance, a higher conversion rate is obtainable with a free report than a form submission, intended for free consultation.
If you make action-taking easier for your visitors, your conversion rate will soar.
3. Traffic Cost
Cost structure of each traffic source will differ from another. The higher conversion rate source mentioned earlier (Google Adwords) is obtainable at a high cost per click, for any keyword that results to conversions. On the other hand, a lower converting rate advertising channel costs less – e.g. banner advertising. Any form of pay per click advertising you choose would cost more if it has a higher quality of traffic.
4. Your Highest Cost Budget for a Conversion
Your CPA (cost per action) is what you spend towards your website conversion. For instance, if the ad that brought 50 people to your website cost $50, and 5 out of the 100 visitors downloaded your free offer (free report); your cost per action for download of the free offer will amount to $10 ($50/5). How much you are willing to spend for your website conversion would be determined by the number of conversions required for you to achieve actual sale.
5. Sales Conversion Rate
This point is critical for those who are not operating an ecommerce store; if you operate an ecommerce store, don’t bother about this factor since it doesn’t apply to you. The rate at which your website leads convert into sales is known as your sales conversion rate – this is the point at which profit is generated. If you are good at transforming website leads to actual sales, your willingness to invest more into your website conversion will increase.
6. The Amount of Sales You Desire
Of course, the entire essence of marketing our online business is to generate more sales, isn’t it? Thus, the topmost objective of an online marketing campaign is to generate the highest amount of possible sales within the present marketing budget. Your marketing budget will grow as your online business grows; and bigger marketing budget would necessitate additional traffic channels in order to maximize the sales.
Initially, your target may be on traffic sources that convert higher e.g. PPC and SEO. However, with the growth of your business, there is need to add other traffic sources to the one you already have.