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How High Should Your Conversion Rate Be?

Today's post is a response to a seemingly simple question, which is: how high should your conversion rate be? What's a good conversion rate, what should you be aiming for?

There's a lot of talk about optimizing your conversion rates, but it would be very helpful to know some figures of what's good or bad to begin with, right?

Watch the video below to see my answer:​

More...

The Truth About 'Conversion Rate'

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Everything mentioned in the video is also why I don't like blanket statements about conversion rates such as "orange buttons convert 10% better than green ones". Not only is the statement insincere, it also hides the more important factor of what conversion is being measured and how that translate into actual value for your business.

What About Opt-In Conversion Rates & Thrive Leads!?​

If you know my products, then you might be shouting "hypocrisy!" at this point. After all, one of my flagship products - Thrive Leads - is all about building your mailing list. One of the big features in Thrive Leads is that you can A/B test everything - and the A/B tests measure the opt-in conversion rate (number of people who see the form divided by number of people who opt in).

To see how this fits with the answer I gave in the video above, there are two things we need to consider:

1) The Tech Problem​

The ideal solution for A/B testing your list building would indeed measure your value per visitor rather than the opt-in conversion rate. Unfortunately, the nature of email marketing makes this technically difficult. You'd have to track visitors who opted in through different variations of your form all the way through to revenue - and with email marketing, that might happen days or weeks later.

It would also mean integrating the testing with your shopping cart or payment processor so that information about who buys what and for how much can be passed back to the A/B test running on your opt-in forms. That's the kind of thing you usually need to hire a developer for.

So, while testing all the way through to revenue would be better, it's simply not practical for most users.​

2) Comparing Conversion Rates in an A/B Test

​The second point is that comparing the opt-in conversion rate of two variations in an A/B test is different from comparing the conversion rate on your site to the conversion rate on a different site or to an "average" conversion rate of other sites.

If we determine that the conversion rate on your site is higher than the conversion rate on my site, we haven't actually learnt anything useful because it's an apples to oranges comparison (or it might be, for all we know).

However, if you run an A/B test, showing two versions of the same opt-in form to the same audience on the same website and with the same goal, then finding out that one of them has a higher conversion rate is actually useful.

The only blind assumption we are making in this case is that getting more people onto your mailing list is always better. This is an assumption and it's not always true. But the chances are good that an opt-in form with a higher conversion rate is better for your business overall than one with a low conversion rate.​

Over to You

As you can tell, there's quite the rabbit hole that we can follow down, based on the seemingly simple question this post started out with.

What other questions do you have about conversion rates, visitor value and A/B testing? Let me know by leaving a comment below!​

Shane's Signature
Shane
 

I'm Shane Melaugh and I'm the guy writing most of the posts on this blog. My goal is to provide you with useful, straight-forward insights on how to grow your business by creating compelling offers, driving traffic and increasing conversions.

Click Here to Leave a Comment Below 12 comments
Bogdan - July 27, 2015

Hi Shane thanks for the useful insight on conversions. I appreciate very much your very direct way of providing valuable information.
I wish you success and high profits

Bogdan

Reply
Debra - July 27, 2015

Shane, what would be the difference between calculating the value per visitor or value per subscriber? I do very little marketing directly on my website. What little I’ve done so far has been directed to just my subscribers. Seems to me there is a difference between conversion rates to become a subscriber and conversion rates to become a customer.

If I calculate the value per visitor, it would involve two different conversion rates (visitor to subscriber, subscriber to customer), and I would have a hard time knowing which one was affecting the value per customer.

It would be incredibly helpful to know which optin forms/offers attracted more profitable customers. Not sure how to do that outside of using Facebook conversion pixels inside a Facebook ad compaign. Any suggestions or thoughts on this? Thanks.

Reply
    Shane - August 4, 2015

    Hi Debra,

    Value per subscriber is a bit trickier. Although if email is your main channel, then you can get a simple estimate by dividing your revenue by the number of subscribers. That gives you a ball park figure, but the more interesting numbers are more difficult to get (e.g. how much is a new subscriber worth this month vs. last month?).

    In terms of subscribers and customers, I’d keep that simple to begin with. A subscriber is just “not yet a customer” as far as you’re concerned, so the relevant numbers are: how much are you earning per visitor (e.g. to your lead generating landing pages) and how much are you earning per subscriber? Another very interesting thing to know is the time to conversion, i.e. how long does it take before a subscriber becomes a customer? One way to get an estimate on that is to add UTM tracking parameters to all the links in your follow-up emails, with one of the parameters being an indication of when the email is sent (e.g. “day5”). Then you can see which follow-up email people convert from.

    As for knowing which opt-in forms attract valuable customers, that’s basically the question of value per lead, broken down by opt-in form. This is something we’ve been puzzling about at Thrive Themes. Ultimately, I want to be able to track that through Thrive Leads forms, but it’s easier said than done. :)

    Reply
      Debra - August 4, 2015

      Thanks for the suggestions, Shane! Those are helpful. My niche introduces even more complexity, as it’s an extremely seasonal topic. Interest in my topic in the spring is about 5 times greater than in the fall. So, just looking at numbers month-to-month has somewhat limited usefulness. Year-to-year comparisons tend to be more useful in the long-term, but doesn’t help as much in the early stages.

      Reply
      Shane - August 6, 2015

      Ah yes, that does complicate matters even further. In this case this year vs. last year comparisons are probably the best indicator of growth.

      Reply
Sunil - July 28, 2015

This is Valuable info Shane. The Metric value per visitor or value per subscriber is important decision variable especially doing A/B testing.

Can this metric be integrated in “Thrive Lead” Analytics Report?

Thanks,
Shane

Reply
    Shane - August 4, 2015

    Hi Sunil,

    We have a longer-term plan to bring revenue metrics to Thrive Leads, yes. It’s not a simple thing to do, though, so it will take us a while and it might be a paid upgrade or something like that.

    Reply
Randal - July 30, 2015

Hi Shane,

That’s a great thoughtful answer to the conversation rate question.

A quick comment on the video production value. I like the second camera angle, but the camera movement can induce dizziness in some viewers.

Thanks for producing all the videos, they’re a big help!

Reply
Jordan @ Experimarketing - July 30, 2015

Hi Shane,

I am watching your webinar while posting a comment here! Great info on content upgrades during the webinar!

Jordan

Reply
    Shane - August 4, 2015

    Glad you liked the webinar, Jordan! Sorry about the tech glitches that plagued part of it.

    Reply

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