What’s a Good Conversion Rate? [Rant]

What's a Good Conversion Rate? [Rant]

If I were to tell you – what would you do with that information? Honestly, think about it and see if you can answer that.

Let’s say it’s 2%, 5% or 10% – now what? What will you do differently?

If yours is already good, would you sit back and relax? If it’s crap, would you work harder?

You have to work harder no matter what.

Conversion rates are highly contextual

The average conversion rate of a site selling $10,000 diamond rings vs an ecommerce site selling $2 trinkets is going to be vastly different. Context matters.

Even if you compare conversion rates of sites in the same industry, it’s still not apples to apples. Different sites have different traffic sources (and the quality of traffic makes all the difference), traffic volumes, different brand perception and different relationship with their audiences.

Most ecommerce sites compete with Amazon one way or another. So will knowing Amazon conversion stats help you in any way?

Amazon Prime members convert at 74%. That’s a sign of a strong client relationship. Non-Prime members convert at 13%.

Now what will you do differently? Let me tell you: nothing at all.

Here’s the correct answer to your question

The only true answer to “what’s a good conversion rate” is this: a good conversion rate is better than what you had last month.

You are running your own race, and you are your own benchmark. Conversion rate of other websites should have no impact on what you do since it’s not something that you control. But you do control your own conversion rate. Work hard to improve it across segments to be able to acquire customers cheaper and all that.

And stop worrying about ‘what’s a good conversion rate’. Work to improve whatever you have.  Every month.

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  1. I would add a “part 2” to the answer: A good conversion rate is the one that gets you a paying customer worth X-amount (lifetime value or LTV), for less than that X-amount (CPL or cost per whatever is your bottom-funnel metric).

    1. Thanks Peep, that was motivating as i had a very low initial conversion rate, but its improving gradually. So since a good conversion rate is better than the previous one, i guess i am on the right track :)

  2. No, no, and no. It may not be a good question, but neither is the answer good. It’s not good because it doesn’t inform and is only marginally actionable. We expect more from experts and professionals. We don’t want rants, we want insights!

    The question is asked for a reason. CRO and growth hacking are more than endlessly rolling a rock uphill. All sites are not equal. All rocks are not equally heavy and all slopes are not equally steep. What’s needed is for your readers to learn to assess where they are and the scope of the opportunity, even if that’s only done near the beginning. Tell them how they can tell when and where to double down or how to assess where they are in the life cycle.

    Then you will have added value.

    1. Avatar photo

      Bob, alas that is the only answer to this question. A good conversion rate is better than what you have right now. The answer is not actionable because it’s the wrong question to ask.

      What you are mentioning here – assessing where you are, and knowing how to progress – are different things. Those are not about “good conversion rate” at all. I have written 100+ articles on those topics – readily available on this very blog, free of charge.

      Some to get you going:

      You can find out where the site is leaking money here:

      Or learn how to perform heuristic analysis on your site:

      And you’re right that every site is different (which is why the notion of “good conversion rate” is silly) – which is why you should learn the industry-agnostic process of uncovering the very specific problems your site has:

      If you have a more specific question, happy to point to more articles, or answer here via comments.

    2. Bob, your reasons for disagreeing end up supporting Peep’s point. Cue mock client conversation:

      Client: “Our conversion rate is 5%, is that good?”

      Me: “Dunno. Are you making money at a 5% conversion rate?”

      Client: “Yes.”

      Me: “Then it’s a good conversion rate….but you know what would be better? 6%. Let’s see how we can get you there.”

      So perhaps the only real qualifier to Peep’s rant is that the company has to be making SOME positive return on their conversion rate for it to be “good.”

  3. I usually answer these kinds of benchmark questions with something like “our average is X, so anything over X is good.”

    As far as asking what someone will do with the information, I don’t know how many times I’ve provided stats and recommendations to just see the same crud come through again and again. It’s like they are waiting on the weather to change or something.

  4. Good question, Peep. Thanks for the write up.

    I think it’s an important one from the perspective of the business / client. I wonder if it boils down to getting a better sense of where the optimum is. The business always care about having a higher return (effect) from the effort way (cost of optimization). There is a hidden evil, and no business sense, in always striving for a 100% conversion rate (whatever the metric). Perhaps contextualized averages begin to answer that question, somewhat. So maybe there is value in some ballpark figure? If I am selling a $10 e-book at 0.3% sales volume rate, perhaps my ceiling is way higher.

    Recently, we’ve been exploring performance based projects for our clients, and say very honestly that we started hearing the question “will it be worth to optimize?” quite clearly.

    Don’t aim for 100%. It’s not worth it. :)

  5. It’s also worth mentioning that an ever higher conversion rate is not always even a healthy sign for a business, if you take that number in isolation. For Amazon Prime, the 74% cited in the example above is remarkable, but if Amazon could get another million prime subscribers to pay $99/year who pull that number down, the economics are probably still favourable on the bottom line.

    The same is true of non-subscription businesses too. I’ll take a 10% reduction in landing page conversion if I can bring in lower converting traffic which is going to yield over a longer period. Having these users add my website to their consideration set is a valuable – and impossible to measure during the run of an experiment – result which would directly reduce my conversion rate.

    The easiest way to make your conversion rate go up is to stop acquiring new customers.

  6. Peep’s message is a truth that I’ve learned over the last few years of consulting.

    Clients who are invested in growing their businesses only care about improvement in their own businesses’ metrics, especially conversion.

    They’re doing it right.

    Relinquish the comforts of the benchmark. You’ll survive. I did.

  7. Thanks – Peep! I needed to hear that today. It’s been very frustrating to see our business lose customers to Amazon. But the nice thing is that some people on Amazon sell used products right out of their garage or their closet – even though they say they are “new.” …And that’s when customers come running back to us saying that “you get what you pay for and that they’ll never buy security gear from Amazon again. …Amazon is a glorified “eBay.” – Not much more, and your words will help us to focus on the way we run our business – now how Amazon runs theirs. – All the best! Jake :)

  8. Guy’s,
    This isn’t rocket science.
    Although it can be tricky if you try to over complify things.
    All businesses start at a zero conversion rate the very first day and proceed up daily (hopefully) from there. As long as you’re going upward and not leveling off or dropping, then the exact number is not relevant to compare to someone else’s rate. If you start leveling off or dropping, then you need to adjust your marketing. As stated by others here, the number of variables per business is too great for comparison, and when that question is asked, it automatically leads to comparison to other businesses in the clients mind.

  9. Great article, short and sweet. And true.
    There is no such thing as perfect, only the best yet :)

  10. I can tell what I would do differently. If I have a “good” conversion rate, I can concentrate on traffic and other stuff. If I don’t, I put all my effort in making it better.

  11. “a good conversion rate is better than what you had last month. – spot on!” Thanks for sharing this one.

    Personally, I think that in marketing, our toughest challenge will be our next one and that just imply in every aspect including increasing conversion rate.

  12. It matters because the ROI for optimising any metric is not linear to the effort invested. One needs to identify the highest-leverage opportunity, and that depends on knowing when something is performing below its potential, and when it’s time to say “good enough”, and focus on the next thing.

    That’s not just relative to last month’s number, but to the business model as a whole. A good conversion rate is one that makes the model work at the scale you want with the resources you have. If the rate is only good when it’s “better than last month”, then eventually it’s bad no matter how high it gets.

    Surely having some notion of what’s adequate and what’s possible for any given KPI is not a stupid question.

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What’s a Good Conversion Rate? [Rant]