Question
trying to locate some sorta reference, all our experience is in direct mail.
in direct mail a 1% sell through rate is considered a successful mailing.
are there formulas out there for websites? i'm having an awful time finding them.
Answer
I found this:
What is an average conversion rate?
This is a very good question and is the topic of serious debate. In other marketing industries they don’t guess. They have standards that everyone follows. It’s what’s needed in online marketing before any real answer can be given. Analytics companies, the big research companies, and digital media associations are going to have to come together to define these standards and then people are going to have to follow what is agreed before accurate numbers can be delivered consistently.
Currently, we’re in the process of trying to establish a worldwide benchmark with a number of other prominent people (The Web Analytics Association and the IAB to mention two) in the industry who also want to know the answer to this question. But meanwhile, here are some statistics we’ve gathered from different sources published both recently and over the last few years. I have figures for 3 types of websites: sales (e-commerce), lead generation, and subscription-based websites.
Generally, sales sites seem to range between a 0.5% and 8% with the average rate being 2.3% according to FireClick statistics published this year and figures published in 2003 by e-consultancy.com. In 2000, the average figure for sales conversion as published by shop.org was 1.8%. The high-end figures, I hasten to add, are the top e-tailers according to all sources. My own experience shows sites hitting between .5% and 5.3% so this seems to correlate with the published figures. Of course since there is no defined standard, these numbers have to be taken as a rule of thumb.
The only source we have for lead generation sites is e-consultancy.com. They quote 2-3% of users completing an optional or free registration process, with 5% being best in class. Our own experience again falls within the same ballpark.
Subscriptions to sale conversion is typically between 1 and 7% again the source is e-consultancy.com
We don’t have figures for visitor to subscription conversion, but our own experience with clients has been between 1 and 8%. Our own site has consistently hit 15% for 6 months though the traffic is pretty well targeted and our methods very well tested.
From here: http://www.isedb.com/news/article/1047
For all the results, see: http://www.google.com/search?sourcei...onversion+rate
Answer
Kathleens quote talks good sense. While I'm definitely no "expert" in the area, I do have quite a few years of online sales experience under my belt, so I figured I'd toss a few of my "opinions" out there, meaning that these are not hard facts and I could be wrong, but...
First and foremost, IMO, your conversion ratio is going to depend on the quality of your traffic. I know this is probably obvious to a lot of people, but to some who are new at online sales it may not be so clear-cut starting out.
Let's say for example, your primary product is rock guitar necklaces
If you spend $100.00 on banner ads on 80's music web sites and radio station web sites, your traffic from those ads is going to convert way better than if you spent the same $100.00 on a banner ad at general music related web site that covers all genre of music. To take that to the next level, an ad on a guitar player oriented web site will convert way better for less money.
If you were to get 3000 visitors from general music searches, and compare that to 3000 visitors from a link on a guitarist oriented web site, your converstion ratio difference between the two is going to be huge. In fact, a free link on a musician's web site should probably blow away a paid link in a generic search-bot or link exchange.
So, let me say these figures are very "loose", but I'd say:
Generic Traffic - .05% conversion to sale is good
Targeted Music-Related traffic - .9% conversion to sale is good
Targeted actual Musician traffic - 1.5% - 2% conversion to sale is good
If you're converting higher visitor to sale ratio than 2% these days, then you're doing really good. Internet markets have become very competitive.
But by the same token, if you have a "niche product", something that 5 billion other sites are not selling, and you focus on really targeting your traffic, you can realistically have a 7% - 10% conversion ratio.
So to really get at whether or not you're doing right with your marketing techniques and site design, you need to first determine what percentage of your incoming *unique visits* are "quality" targeted traffic, and what percentage of it is "generic" surfing traffic. This is not as hard as it sounds - many web hosting companies will provide you with a very detailed stats program that will allow you to see where your traffic is coming from, how many visits per day from each link out there, etc...
With a fairly quick examination of your stats over the course of a month, you can make an educated guess as to how much of your traffic is generic as opposed to well-targeted, and then determine if your conversion ratio can be easily improved by modifying your site design and marketing techniques, or if you are in about the right ballpark for sales figures.
A rule of thumb based on all your traffic combined, both general and targeted (again only in my opinion and not "fact") is this:
1 sale per 1000 *unique visitors* = not too bad, but can improve somewhere
5 sales per 1000 uniques = very good, you're doing something right
10 sales per 1000 uniques = excellent, i would be hesitant to change anything
20 sales per 1000 uniques = awesome, you're doing way better than most
But it really is hard to lay out expectations without really taking into consideration your product, your site design, your cart navigation, and most importantly your sources of traffic.
Now iMosh, on a side note, do you make custom guitar necklaces in addition the ones in your store? I've been a guitar player most of my life and I'd really like a nice custom Ibanez necklace!
Answer
I think mepDave nailed this pretty well.
I'd only reiterate that the better your ad targeting is, the better results you should see.
I saw a really good comment on this today that suggested that to improve your targeting you need to take off your sellers hat and put on your buyers hat when planning your ad program.